Computation of Income Tax for Individual

Suppose Income of Individual (Male, Unmarried) Per Year (2079/080)

Salary Income: NPR 20,00,000

Employer's contribution to SSF: NPR 200,000

Deductions: Social Security Fund (Total) = NPR 310,000

Life Insurance Premium: NPR 50,000

Here, Taxable Income = NPR 22,00,000 - NPR 310,000 (SSF) - NPR 40,000 (Life Insurance Premium)

Salary Tax Computation: Taxable Income = NPR 18,50,000

1. 500,000 x 0% (Since Registered with SSF, No SST applicable)

2. 200,000 x 10% = (NPR 20,000)

3. 300,000 x 20% = (NPR 60,000)

4. 850,000 x 30% = NPR 255,000

Total Tax = NPR 335,000

TDS Per Month = 335,000/ 12 = 27,916.67 or NPR 27,917 per month.

SALARY TAX/ INCOME TAX FOR INDIVIDUAL IN NEPAL:

SALARY TAX/ INCOME TAX FOR INDIVIDUAL IN NEPAL:

VAT issues- Debit Note/ Credit Note

 What is Debit/ Credit Note:

As per definition debit note is a note (in prescribed format) sent by Purchaser of the goods, to inform the seller that his account has been debited.

Note: when goods are purchased we pass following entry:

Dr. Purchase A/c

Dr. VAT (on Purchases)

Cr. Creditor's A/c

While debit note is issued, It is informed to the Creditor that his account has been debited with Purchase Return and VAT on Credit (reversed).

Debit Note:

Similarly, the party who has sold the goods, shall issue a Credit Note (to inform the purchaser that his account has been debited).

 See, what is the entry for sales?

Dr. Debtor's Account

Cr. Sales Account

Cr. VAT (On Sales)

If Credit Notes is issued, sales and VAT is to be debited and what is to be credited? (of course, Debtor's Account)

Not What does VAT Act says about this?

Rule 20 (1)

Details to be mentioned on Debit / Credit Note: