Taxation In NepalTU Board 2082
Define direct tax with example.
2Answer
Definition of Direct Tax
A direct tax is a levy imposed directly on the income, wealth, or assets of an individual or entity, and the burden of the tax cannot be shifted to another person. The taxpayer who pays the tax to the government is the same person who ultimately bears the economic burden.
In Nepal, the primary example of a direct tax is Income Tax, governed by the Income Tax Act, 2058 (2001). For instance, if a resident individual earns a taxable annual income of NPR 1,000,000, they must pay income tax directly to the Inland Revenue Department (IRD) based on the applicable slab rates. The tax liability is calculated on the individual's own income, and they cannot transfer this payment obligation to a third party.
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