Kathmandu. Finance Minister Swarnim Wagle has proposed some important changes proposed in the income tax for the coming fiscal year.
Tax rates modified:
The limit of personal income tax has been increased from Rs 5 lakh to Rs 10 lakh. Up to this limit, only 1% will be taxed. This provision will be applicable only to those who are not included in the Social Security Fund. In addition, the concept of couple/husband-wife has been removed in the taxable income calculation limit.
Rs. 10 to 15 lakhs – 10%
Rs. 15 to Rs. 25 lakhs – 20%
Rs 25 to Rs 40 lakh – 27%
Above Rs 40 lakh – 29%
The deduction limit for donations or donations to tax-exempt organizations has been increased to Rs. It has been increased to 3 lakhs. Earlier, it was only Rs 1 lakh.
Apart from this, the limit of payment of cash expenses has been reduced to Rs. 25,000 have been settled.
Taxpayers who adopt the ‘Safe Harbour Rule’ will not have to submit documents related to transfer pricing.
Relief in Section 57:
Section 57 of the Income Tax Act will not be attracted if there is a change in ownership due to death or change in holding institution.
Banks and financial institutions will also be affected by the removal of Section 47 (a).
The Department of Internal Revenue can make a special billing system mandatory in addition to the CBS system.
TDS will not be levied on retirement fund payments. Previously, the rate was 5 percent.
The ambiguity between contribution-based and non-contribution-based funds has been removed.
Provisions relating to capital gains tax:
Those holding more than 365 days will be taxed at 7.5% and 10% for less than 365 days. And such a tax will be the final tax deduction.
In case of land purchase and sale, capital gains tax will be levied at 7.5 percent for more than five years and 10 percent for less than 5 years.
The government has capped the tax on mandatory acquisitions at 2.5%.
Ride-sharing businesses (e.g. driver, Pathao, etc.) will attract 5% VAT and taxable service charges TDS (TDS) at 1%.
The evaluation period for a full audit has been reduced to 3 years. This will be a big relief to the business organizations.
