Satyam is a disable government officer. He was promoted to this post on 1st Shrawan 2072, at a salary scale of Rs. 57,000 1000 60,000 EB 2,000 72,000. The other details provided by him for the…

Solution to the Taxation Problem (TU Board 2082)

Step 1: Calculate Basic Salary

Satyam’s salary scale is Rs. 57,000-1,000-60,000-EB-2,000-72,000. Since he was promoted on 1st Shrawan 2072, we assume he worked for the entire fiscal year (FY 2072/73).

• Basic Salary (Annual) = Rs. 60,000 × 12 = Rs. 720,000

Step 2: Compute Allowances (Fully Taxable)

All allowances except Remote Area Allowance (RAA) and Life Subsistence Allowance (LSA) are taxable. However, RAA (10% of salary) and LSA (Rs. 4,000 p.m.) are fully taxable under Nepal’s Income Tax Act.

Step 3: Compute Perquisites (Taxable Value)

Perquisites are benefits provided by the employer, taxed at their market value.

Step 4: Compute Other Income

• Meeting Allowance (Net) = Rs. 18,500 × 20 = Rs. 370,000 (Fully taxable)
• Interest on Fixed Deposit (Net) = Rs. 95,000 (Fully taxable)
• Business Income (Net) = Rs. 200,000 (Fully taxable)

Step 5: Compute Total Gross Income

$$\text{Total Gross Income}=\text{Basic Salary}+\text{Allowances}+\text{Perquisites}+\text{Other Income}$$ $$=720,000+380,000+192,000+370,000+95,000+200,000=\text{Rs. 1,957,000}$$

Step 6: Compute Deductions

Satyam is a member of a Recognized Provident Fund (RPF). Both his and his employer’s contributions are deductible.

Step 7: Compute Taxable Income

$$\text{Taxable Income}=\text{Total Gross Income}-\text{Deductions}$$ $$=1,957,000-158,400=\text{Rs. 1,798,600}$$

Step 8: Compute Tax Liability (Slab Rate for FY 2072/73)

Nepal’s Income Tax Slab (2072/73) for individuals is as follows:

Calculation:

• First Rs. 400,000 → 0%
• Next Rs. 400,000 (400,001–800,000) → 10% of 400,000 = Rs. 40,000
• Next Rs. 400,000 (800,001–1,200,000) → 20% of 400,000 = Rs. 80,000
• Next Rs. 300,000 (1,200,001–1,500,000) → 25% of 300,000 = Rs. 75,000
• Remaining Rs. 298,600 (1,500,001–1,798,600) → 30% of 298,600 = Rs. 89,580

Total Tax = 40,000 + 80,000 + 75,000 + 89,580 = Rs. 284,580

(Note: The initial table had a miscalculation; corrected here.)

Step 9: Final Tax Payable

Since Satyam is a disabled government officer, he is eligible for a tax rebate of Rs. 50,000 (as per Nepal’s Income Tax Act, 2058).

$$\text{Final Tax Payable}=\text{Total Tax}-\text{Rebate}$$ $$=284,580-50,000=\text{Rs. 234,580}$$

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Final Answer

Satyam’s total tax liability for FY 2072/73 is Rs. 234,580. The breakdown is as follows: