Budget Source Analysis:-
| Particulars | 2074/75 (NPR) | % | 2075/76(NPR) | % | 2076/77(NPR) | % |
| Total Budget | 10,84,68 | 29.55% | 13,15,16 | 21.24% | 15,32,96 | 16.56% |
| Revenue From Tax Source | 6,59,49 | 61% | 8,38,34 | 59% | 98100 | 65.83% |
| Value Added Tax | 2,06,81 | 19% | 2,84,69 | 21% | 3,15,01 | 21% |
Objectives of Budget 2076/77
- Qualitative reform of lifestyle by immediate fulfillment of fundamental rights of general people.
- Rapid economic development with social justice by optimum utilization and equitable distribution of available resources, opportunities, and capabilities.
- Develop the milestone of the prosperous social-oriented economy by upgrading to medium-income earning within 2030 A.D. by developing economical, biological and social infrastructure.
Tax Updates for F.Y.2076-77
- Changes in Tax Rate (Schedule 1)
There has been a change in the tax rates to various persons applicable to the budget this year.
- Taxes on Income of Natural Person
| Particulars | Tax Rates | Assessed as Single | Assessed as Couple |
| Basic Exemption | 1% | 4,00,000 | 4,50,000 |
| Next 1,00,000 | 10% | 1,00,000 | 1,00,000 |
| Next 2,00,000 | 20% | 2,00,000 | 2,00,000 |
| Next 13,00,000 | 30% | 13,00,000 | 12,50,000 |
| Balance Exceeding 20,00,000 | 36% | Balance | Balance |
- Taxes for Presumptive Tax Payer
| Business Situated In | F.Y. 2076-77 | F.Y. 2075-76 |
| Metropolis or sub metropolis | 7,500 | 5,000 |
| Municipality | 4,000 | 2,500 |
| Other Areas | 2,500 | 1,500 |
- Turnover Based Tax Payer –Sec 4(4A)
| Particulars | F.Y. 2076-77 | F.Y. 2075-76 |
| A person conducting transaction of gas, cigarette by adding commission or price up to 3 percent | 0.25% | 0.25% |
| A person conducting business other than the business mentioned in clause (a) | 0.75% | 0.75% |
| A person conducting the business of service | 2% | 2% |
| Repealed | Provided that, if tax computed according to clause (a), (b), (c) above is less than five thousand rupees, five thousand rupees. |
- Special Provision for Co-operatives
| Provisions | Tax Rates |
| Existing provisions –Schedule 2 (3)(Kha)(3) | The tax rate for the co-operative registered under the Cooperative Act, 2074 shall be 20% except if cooperative carries out tax-exempt activities. |
| Amended Provision-Schedule 2(3)(Kha)(3) | The tax rate for the co-operative registered under the Cooperative Act, 2074 shall be 20%. However, the tax rate for the co-operative carrying out financial transaction shall be as follows:
– Co-operative operating in Municipality: 5% – Co-operative operating in Metropolitan & Sub metropolitan City – 10% |
- Business Exemptions & Concessions
| Sections | Existing Provisions | Amended Provisions |
| Sec. 11(2) | No Income tax shall be levied for Saving & Credit Cooperative based in rural areas | No income tax shall be levied for cooperative carrying out financial transactions based in rural areas. |
| Sec.11 (2kha) | No provision as such. | Following concession shall be provided on income tax to a special industry that is in operation for the whole year:
· In case of a natural person, if tax is levied @30% on the income of natural person-1/3rd concession. · In case of entity – 20% concession. · The Above person can also avail of other tax concessions under sec. 11. |
| Sec 11(3E) | In the case of the manufacturing industry, if it exports its product 25% concession on income tax. | In case of revenue earned through export during a financial year, following tax concessions shall be provided :
· In case a 20% tax rate is applied to resident natural person -25% concession · In case a 30% tax rate is applied to resident natural person-50% concession. · In case of entity- 20% concession. · In the case of the manufacturing industry, if it exports its product, additional tax concession of 25% shall be provided after deducting the above tax concession. |
| Sec 11(3F) | In case of a road, bridge, airport, and a tunnel are being built and operated or investment is made in tram, trolleys and is being operated, tax rebate shall be granted by 40% on the rate of tax chargeable on the income so earned. | Exemptions shall be as follows on applicable tax on income earned by any entity that carries out the following functions:
· 20% if tram or trolley bus is operated. · 20% if ropeway, cable car, railway, tunnel or over a bridge is built and operated. · 40% if the airport is built and operated. · 52% if road, bridge or tunnel way is built and operated. · 52% if tram or trolley bus is operated by investing in it. |
| Sec. 11(3Tha) | No Provision | In case an entity is involved in any public infrastructure under BOT and involved in electricity generation & transmission, 20% tax concession shall be provided on the tax liability. |
- Expenses Disallowed-Section 21 (Gha1)
| Sections | F.Y. 2075-76 | F.Y. 2076-77 |
| Sec.21 (Gha1) | No Provision as such. | The remuneration and wages paid to the employees and workers not having Permanent Account Number (PAN) shall be disallowed for tax purpose. |
| Sec.21(Gha2) | No provision as such | Expenses made through invoice not containing PAN number for a value exceeding Rs. 1000. |
- Mergers and Acquisitions of Business-Sec 47ka(6) & (7)
| Sections | F.Y. 2075-76 | F.Y. 2076-77 |
| Sec 47(ka)(6) | The intent of the business combination shall be submitted to IRD within Ashad End 2076. | The intent of the business combination shall be submitted to IRD within Ashad End 2077. |
| Sec.47 ka (7) | Intent as per Sec 47ka(6) by the entity concerning the conclusion of business combination shall be submitted to IRD within Ashad End 2077. | The intent of the business combination shall be submitted to IRD within Ashad End 2078. |
- Permanent Account Number
| Sections | F.Y. 2075-76 | F.Y. 2076-77 |
| Sec 78(4ka) | No provision as such. | A person carrying the transactions by taking PAN shall mandatorily update the information regarding their registration under the biometric system within the prescribed timeframe. |
- Installment Tax –Sec 94(2)
| Sections | F.Y. 2075-76 | F.Y. 2076-77 |
| Sec. 94(2) | Notwithstanding anything contained in sub-sec (1), in case the advance tax to be deposited is less than Rs.5,000, no advance tax shall be deposited. | Notwithstanding anything contained in sub-sec (1), in case the advance tax to be deposited is less than Rs. 7,500, no advance tax shall be deposited. |
- Advance Tax –Sec 95
| Sections | Existing Provisions | Amended provisions |
| Sec. 95ka(2) (ka) | Capital gain tax in case of disposal of listed securities shall be as follows :
· In case of natural person -7.5% · In case of resident entity-10% · In case of others-25% |
Capital gain tax in case of disposal of listed securities shall be as follows:
· In case of natural person-5% · In case of resident entity-10% · In case of others -25% Further, while calculating gain, the weighted average cost shall be taken into consideration. |
| Sec. 95(6) | Land revenue shall collect advance tax at the rate of 10% at the time of registration on the gain from the disposal of land or building under the ownership of any person other than mentioned in sub-sec (5) | Land revenue shall collect advance tax at the rate of 1.5% at the time of registration on the gain from the disposal of land or building under the ownership of any person other than mentioned in sub-sec (5). |
- Tax Return
| Sections | Existing Provisions | Amended Provisions |
| Sec. 96(6) | No provisions as such. | Any error on income tax return submitted can be rectified by submitting the revised tax return within 30 days from the date of submission of erroneous return. |
- General
- Special Provision for waiver of tax, fines, penalties and interest up to F.Y.2075-76 for the business started with innovative thinking, skill, entrepreneurship, and technology: Startup businesses operating with innovative thought, skills, entrepreneurship, and technology shall be provided full exemption on tax, fines, penalties, fees applicable for and before F.Y.2075-76 if such businesses enroll under the tax and VAT system by 2076 Poush end.
- Administrative Review
| Sections | F.Y. 2075-76 | F.Y. 2076-77 |
| Sec. 115(6) | The taxpayer who makes an application to Administrative appeal has to pay the full amount of undisputed tax and 1/3rd of the disputed tax. | The taxpayer who makes an application to Administrative appeal has to pay the full amount of undisputed tax and 1/4th of the disputed tax. |
| Sec. 115(8) | In case the department does not furnish to the applicant a notice about its decision on the application filed under subsection (1) within sixty days from the date of application, the applicant may register information thereof at the department to have refused the application. | In case the department does not furnish to the applicant a notice about its decision on the application filed under subsection(1) within sixty days from the date of application, the applicant may file an appeal to the Revenue Tribunal under sec. 116. |
| Sec. 115(9) | The applicant shall inform the department that it has assumed that the application has been denied as per sub-section (8). | The applicant shall provide written information to the department within 15 days of the application so filed as per subsection (8). |
- Fees & Interest
| Sections | Existing Provisions | Amended Provisions |
| 117(1)(ka) | In case the return of income of any income year is not submitted, according to subsection (1) of section 95, at the rate of Two Thousand Rupees for each return. | In case the return of income of any income year is not submitted, according to subsection (1) of section 95, higher of :
– Five thousand rupees for each return & – 0.01% of assessable income men. |
Read more about budget highlights 2074-75 here : https://camunchnepal.com/articles/finance/key-highlights-of-budget-f-y-2074-75/
Source: https://mof.gov.np/en/archive-documents/budget-speech-17.html?lang=
