Are individuals benefited or loss at their remuneration income with new change in tax in 2075-76?

With the new budget being called and hike in tax changes from tobacco to automobile we are left with this question.

Are individuals benefited or loss at their remuneration income with new change in tax in 2075-76?

At a glance.

Remuneration Tax

Effective for 2075-76 (Coming Year) Effective for 2074-75 (Current)
Particulars Income Tax Rate Income Tax Rate
For Single First Slab 350,000.00 1% 350,000.00 1%
Next Slab 100,000.00 10% 100,000.00 15%
Next Slab 200,000.00 20% 2,050,000.00 25%
Next Slab 1,350,000.00 30%
Balance above 2,000,000.00 36% 2,500,000.00 35%
For Couple Option (Married) First Slab 400,000.00 1% 400,000.00 1%
Next Slab 100,000.00 10% 100,000.00 15%
Next Slab 200,000.00 20% 2,050,000.00 25%
Next Slab 1,300,000.00 30%
Balance above 2,000,000.00 36% 2,500,000.00 35%

Remarks:

  1. No changes in tax for those who earned 350,000.00 (for single) & 400,000.00 (for couple) in year 2075-76
  2. Those who earn up to NPR 450,000.00 (for single) & NPR 500,000.00 (for couple) are benefited for less tax of NPR 100,000.00 as 5% is reduced i.e. now they need to pay only 10% where as 15% is the existing tax rate.
  3. Those who earn up to NPR 650,000.00 (for single) & NPR 700,000.00 (for couple) are benefited for less tax of NPR 200,000.00 as 5% is reduced i.e. now they need to pay only 20% where as 25% is the existing tax rate.
  4. Those who earns up to NPR 20,00,000.00, they are at loss for NPR 13,50,000.00 (for single) & for 13,00,000.00 (for couple) as 5% is increased i.e. now they need to pay 30% where as 25% is the existing tax rate.
  5. Those who earns up to NPR 20,00,000.00 to 25,00,000.00, they are at loss for NPR 5,00,000.00 (for single & couple both) as 11% is increased i.e. now they need to pay 36% where as 25% is the existing tax rate.
  6. Those who earns above NPR 25,00,000.00 (for single & couple both) are at loss by 1% only as it will be increased to 36% where as 35% is existing tax rate.

Suggestions:

  1. Please deposit at 33.33% of income or 300000.00 whichever is less to Provident Fund, Citizen Investment Fund or at any Approved Fund if your income belongs to Remarks 2-6 so as to save the excess tax.
  2. Please get a life insurance for 20,000.00 if your income belongs to Remarks 2-6 so as to save the excess tax.
  3. For disable/ Incapacitated earner, your 50% of first Slab income is added for taxable for 1% only.
  4. Incase of female employee whose taxable income is only from employment than 10% rebate is allowed on tax liability.
  5. If you have income as foreign allowances, 75% of your income can get rebate.
  6. If you have pension income, your 25% of first Slab income is added for taxable for 1% only.
  7. If you are working in remote area then you can get rebate from NPR 10,000.00 to 50,000.00.
  8. You can claim medical of max NPR 750.00 of 15% of tax liability whichever is lower.

Manik Balami
manikbalami@gmail.com
9851152761
HOD-Finance, Nepal Shipping & Air Logistics P. Ltd.
Freelancing, Tax Consultant