Taxation In NepalTU Board 2082
Given is the summarized statement of cash pertaining to Doctor, Abhinay for the previous income year. Receipts Amount Payments Amount : : : : To Balance b/d By Office rent paid 50,000 Cash in hand…
10Given is the summarized statement of cash pertaining to Doctor, Abhinay for the previous income year.
| Receipts | Amount | Payments | Amount |
|---|---|---|---|
| To Balance b/d - | By Office rent paid | 50,000 | |
| Cash in hand | 50,000 | ||
| Cash at Bank | 200,000 | By Purchased of computer on Falgun | 90,000 |
| To Patient examination fees | 850,000 | By Telephone & communication expenses | 30,000 |
| To Patients counselling fees | 300,000 | By Salary to assistants | 200,000 |
| To Consultation fees after TDS | 170,000 | By Life insurance premium (Own) | 50,000 |
| To Dividend received | 40,000 | By Research and development | 80,000 |
| To Interest on investment | 120,000 | By Other office expenses | 120,000 |
| To Lottery income received | 30,000 | By Water/Electricity expenses | 30,000 |
| To Other professional incomes | 70,000 | By Refreshment & hospitality expenses | 20,000 |
| To Visiting fees | 100,000 | By Insurance premium of office | 15,000 |
| To Salary received from part time lecturer at NAME institute | 170,000 | By Donation paid | 50,000 |
| By Balance c/d | 1,365,000 | ||
| Total | 2,100,000 | Total | 2,100,000 |
Further information: a. Other professional incomes includes: i. Bad debt recovered Rs.10,000 which not allowed in previous year. ii. Income from pathological test Rs. 50,000 iii. Gifts received from patients Rs. 10,000 b. Water/electricity expenses are used equally for professional and personal purpose. c. Outstanding office salary Rs. 30,000 is yet to be paid. d. Visiting fees includes Rs. 2,000 relating to three years ago professional income. e. Advance consultation fees Rs. 50,000 is not shown in above receipts account.
Required: a. Assessable (Net) income from profession b. Statement of taxable income c. Tax liability (6+2+2)
Answer
a) Assessable (Net) Income from Profession
| Particulars (Professional) | Amount (Rs.) |
|---|---|
| Receipts | |
| Cash in hand | 50,000 |
| Cash at bank | 200,000 |
| Patient examination fees | 850,000 |
| Patients counselling fees | 300,000 |
| Consultation fees (after TDS) | 170,000 |
| Other professional incomes* | 70,000 |
| Visiting fees | 100,000 |
| Advance consultation fees (not shown) | 50,000 |
| Total receipts | 1,790,000 |
| Allowable expenses | |
| Office rent | 50,000 |
| Telephone & communication | 30,000 |
| Salary to assistants | 200,000 |
| Research & development | 80,000 |
| Other office expenses | 120,000 |
| Water / electricity (50 % allowed) | 15,000 |
| Refreshment & hospitality (50 % allowed) | 10,000 |
| Office insurance premium | 15,000 |
| Outstanding salary (still payable) | 30,000 |
| Depreciation on computer (20 % of Rs. 90,000) | 18,000 |
| Total allowable expenses | 578,000 |
| Net profit from profession | 1,212,000 |
*Break‑down of “Other professional incomes” (Rs. 70,000)
| Item | Amount (Rs.) | Tax treatment |
|---|---|---|
| Bad‑debt recovered (previous year disallowed) | 10,000 | Taxable – added to income |
| Pathological test income | 50,000 | Taxable – professional income |
| Gifts from patients | 10,000 | Taxable – professional income |
Assessable (Net) Income from profession = Rs. 1,212,000.
b) Statement of Taxable Income (FY 2082/83)
Notes on non‑professional items
| Income | Taxability | Remarks |
|---|---|---|
| Salary (part‑time) | Fully taxable | Added to total taxable income |
| Interest on investment | Taxable at 10 % (included in total) | |
| Lottery income | Taxable at 10 % (included in total) | |
| Dividend | Exempt up to Rs. 30,000; Rs. 10,000 taxable | Taxed at 10 % (included in total) |
| Life‑insurance premium (own) & donation | Disallowed expenses – not deducted | |
| Water/electricity & hospitality | Only 50 % allowed (already reflected) |
c) Tax Liability (6 % + 2 % + 2 %)
1. Basic income‑tax calculation (progressive slabs)
| Slab (Rs.) | Rate | Tax on slab (Rs.) |
|---|---|---|
| 0 – 400,000 | 6 % | 24,000 |
| 400,001 – 700,000 | 12 % | 36,000 |
| 700,001 – 1,000,000 | 18 % | 54,000 |
| Above 1,000,000 | 24 % | (1,542,000 − 1,000,000) × 24 % = 130,080 |
| Total basic tax | 244,080 |
2. Education tax (2 % of basic tax)
3. Local development tax (2 % of basic tax)
4. Total tax liability
Summary of Results
| Item | Amount (Rs.) |
|---|---|
| Assessable net income from profession | 1,212,000 |
| Total taxable income (all sources) | 1,542,000 |
| Total tax liability (incl. 2 % education & 2 % local tax) | 253,844 |
All calculations follow the Income Tax Act, 2058 (Nepal) and the prevailing rates for FY 2082/83.
Discussion
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