Taxation In Nepal TU Board 2081 question paper

What is tax?

What is Permanent Account Number?

Differentiate between income year and assessment year.

State the meaning of "Canon of Economy".

What do you mean by "Non Changeable Business Assets"?

Mention the exemption of individual working in a remote area.

Mr. Rai has received the salary from a company as an employee Rs. 6,00,000. The vehicle and accommodation facility is provided by office to him. Required: The amount of vehicle and accommodation facility to be included in his income

Miss. Hira, a government employee, earned taxable income from employment Rs. 11,20,000. Required: Tax liability of Miss Hira.

Sole Trader Organization provided the following information: The opening written down value (Block D) is Rs. 5,00,000. Addition is made in 2^nd Chaitra of Rs. 3,00,000. Actual repair and improvement cost is Rs. 50,000. Required: Allowable amount of repair and improvement cost of the year.

Susan runs small business in Kathmandu Metropolitan city annual turnover Rs. 3 Million and taxable income amount Rs. 3 Lacks Required : Tax liability he selected presumptive taxation.

Mrs. Muna an employee of government office was appointed on 1st Magh 2076 with a pay scale of Rs. 30,000 - 1000 - 42,000. The other particulars of her for previous year are given below. Entertainment allowance Rs. 3,000 p.m. Dearness allowance Rs. 3,000 p.m. Meeting allowance Rs. 12,000 Accommodation and vehicle facility was provided by the office. House keeper's salary provided by office Rs. 5,000 p.m. and Mrs Muna's contribution to housekeeper was Rs. 3000 p.m. Her electricity bill of Rs. 1,000 p.m. was paid by the office. Office provided soft loan Rs. 5,00,000 at interest rate of 5%. Market interest rate was 12%. Her office is located at Zone B She claimed following expenses for deduction: Approved medical expenses spent by her of Rs. 3,000. Life insurance premium (self) of Rs. 50,000 (on a policy of Rs. 10,00,000). Health insurance premium of Rs. 23,000 on her own policy She had donated Rs. 50,000 to a religious heritage of Nepal (an exempt organization approved by IRD). Required: a. Net (assessable) income from employment b. Statement of total taxable income c. Tax liability

The following receipts and payments accounts of an auditor are given below: ReceiptsRsPayments****RsTo Balance b/d160,000By Office salaries360,000To Audit fees890,000By Office expenses90,000To Consultancy fees (net)510,000By Office rent120,000To Commission relating to audit work50,000By Purchase of office equipment (Bhadra)240,000To Interest on fixed deposit from NBL (net)10,000By Life insurance premium (self)35,000To Sale of old newspaper and journals4,000By Purchase of newspaper & journals8,000To Gift and presents from clients30,000By Income tax paid in advance10,000To Interest on govt. securities (net)15,000By Donation to tax exempt organization140,000To Dividend received (net)19,000By Purchase of stationery25,000To Lottery income20,000By Travelling expenses30,000By Miscellaneous expenses20,000By Domestic expenses80,000By Car expenses24,000By Balance c/d526,0001,708,000****1,708,000 Additional information: • 20 percent of car expenses were paid for personal purpose. • Office salaries include Rs. 10,000 paid to domestic servant. • 40 percent of donation was given to an organization which was not approved by IRD. • Half of domestic expenses were spent for general expenses of the office. • Allowable depreciation for the year was not shown in account. Required :a. Assessable (Net) income from profession b. Statement of taxable income c. Tor liabilit

(a) An importer imported goods paying VAT amounted Rs. 5,200. He (importer) incurred carriage expenses of Rs. 3,000 and sold them to a retailer charging 10% margin on cost. The retailer sold the goods to customer charging 20% margin on outlay with Rs. 1,000 as selling expenses there on. Required: (i) Cost price of customer (ii) Total VAT payable to government at each stage (b) "Value Added Tax is levied on added value of goods and services."Explain in brief.

(a) Mr. Hari disclosed the following incomes and expenditures for the previous year. Dividend from resident company Rs. 25,000 Income from natural resources Rs. 340,000 (net) Royalty income Rs. 170,000 (net) Interest from private money lending transactions Rs. 210,000 Interest from fixed deposit Rs. 9,500 Rent from house let out Rs. 180,000 Rent received by letting an asset Rs. 90,000 (after TDS) Compensation received relating to investment Rs. 50,000 Dividend from foreign company Rs. 85,000 He claimed the following expenses for deduction: Donation to Pasupati Area Development Trust Rs. 50,000 Collection cost of natural resources income Rs. 1,000 Interest collection charge relating to money lending transactions Rs. 2,000 House rent collection charges Rs. 500 Collection cost of fixed deposit Rs. 400 Tax paid to foreign government Rs. 15,000 a. Assessable (Net) income from profession b. Statement of taxable income c. Tax liability (b) Mention the conditions for an assesses to be resident person in case of natural person, partnership firm, trust and company.

What are the allowable reductions in calculation of taxable income of a national person?

What do you mean by tax auditing? Explain the major features of tax auditing.

(a) SS Trades provided the following details of its fixed assets under block B and C. Particulars****Block 'B' (Rs.)Block 'C' (Rs.)Opening WDV400,000900,000New addition of assets during the yearon 1^st Ashwin150,0000on 1^st Falgun300,000300,000on 21^st Baishakh0600,000Assets disposed off during the year50,000100,000Repair and improvement cost during the year40,00090,000 Required: (i) Allowable depreciation (ii) Closing value of fixed asset of the year (b) The operating results of a company are provided: Year678910Profit/loss(Rs)30,000100,000150,000200,000120,000 The company has incurred loss in its 2^nd year of operations. The unrecovered loss of 2^nd year, 3^rd year, 4^th year and 5^th year is Rs. 30,000, Rs. 40,000, Rs. 50,000 and Rs. 60,000 respectively. The profit of the 6^th year is derived without deducting interest on bank loan Rs. 20,000 and profit of the 7^th year is derived without adding commission income Rs. 10,000. In year 9, profit was calculated after deducting donation to PADT Rs. 100,000 and the profit of 10^th year was ascertained deducting pollution control cost of Rs. 300,000. Required: Taxable income and explanation wherever necessary.

Given below is the trading, profit and loss account of a proprietorship firm: ParticularsAmountParticulars****RsTo Opening stock210,000By Sales4,900,000To Purchase2,020,000By Closing stock450,000To Carriage260,000To Wages340,000To Customs duty110,000To Gross profit c/d2,410,0005,350,000****5,350,000To Salary650,000By Gross profit b/d2,410,000To Office rent240,000By Rent from staff quarter45,000To General expenses70,000By Interest from investment70,000To Water and electricity80,000By Commission received10,000To Legal expenses15,000By Sundry receipts40,000To Audit expenses30,000By Bad debt recovered60,000To Promotion expenses25,000By Divided received40,000To Interest on loan40,000By Gain on sale of non business assets130,000To Bad debts30,000By Gift received relating to business50,000To Fine and penalties10,000To Provision for tax30,000To Life insurance premium (own)35,000To Fire insurance premium20,000To Donation80,000To Pollution control cost110,000To Depreciation (Block D)50,000To Repair (Block D)30,000To Sundry expenses50,000To Net profit c/d1,260,0002,855,000****2,855,000 Further information: i. Opening and closing stock were over valued by Rs. 10000 and Rs. 50000 respectively. ii. Purchase include purchase of plant costing Rs. 120,000 which was purchased on 15^th Chaitra of previous year and the opening WDV of the plant was Rs. 400,000. A part of plant costing Rs. 80,000 was disposed during the previous year. iii. Business loss of last year is Rs. 50,000. iv. Donation was given to private nursing home and public hospital equally. v. Legal expenses include Rs. 5,000 incurred for domestic purpose. vi. 30% of bad debt recovered was not allowed previously by Inland Revenue Office. Required: i) Net (assessable) income from business ii) Statement of total taxable income iii) Tax liability

(a) Explain the historical development of income taxation in Nepal. (b) What are the duties of taxpayer (accesse) as per Income Tax Act 2058?