Kathmandu: The federal government has made an arrangement to provide tax exemption of Rs. 40,000 while insuring life. Finance Minister Janardan Sharma has made an arrangement to get tax exemption of Rs. 40,000 annually when insuring life through the budget statement of the coming fiscal year 2079/80.
With the provision of income tax exemption of Rs. 40,000 for life insurance, low and middle income Nepalis will get better tax exemption. The government has made an arrangement to pay one percent tax on income up to Rs. 500,000 per annum for individual and Rs 600,000 for couple. Along with this arrangement, life insured will now get tax exemption of up to Rs. 540,000 and couples up to Rs. 640,000.
Earlier, life insured were getting tax exemption of Rs. 25,000 on their income. The Insurance Board had demanded the Ministry of Finance to provide tax exemption on income up to one lakh rupees.