CHANGES IN RATE OF TAXES FOR 2083

 

Effective from श्रावण ( shrawan)1, 2083  Nepal has started it's new fiscal policy  . There is a huge changes in the current tax slab rate of the fiscal year comparing to the tax last slab rates . There is a huge different in the tax rate for the low level income . 

As we can see that the basic exemption level is increase by 5 lacs for individual and 4 lacs for couples .

and the tax rate of above amounts has been significantly decreased from the prior one's . The maximum rate of tax is 29% in the current policy whereas the prior one it contains the highest rate of 39% . The number of slabs in the new policy is also decreased compared to the prior . This policy only contains 5 slabs whereas the prior one has 6 slabs , the new policy has become much simpler and convenient

as it contain less slabs .  

We can analyze the different positive outcomes from the current policy as ;

1)Increased tax-free income limit.

2)Reduced tax liability.

3)Higher disposable income.

4)Greater investment and savings.

5)Simplified tax system.

6)Better tax compliance.

7)Positive impact on economic growth.

As there are also negative outcomes also which can be listed as ;

1)Decrease in government revenue.

2)Possible increase in fiscal deficit.

3)Greater tax benefits for high-income earners.

4)Potential increase in dependence on indirect taxes.

5)Reduced government spending capacity

6)Uncertain effect on economic growth.

CONCEPT OF TIME VALUE OF MONEY

 

TVM ( time value of money ) 

This is a common concept taught in schools, but most students forget it and cannot use it in their day-to-day lives.

Let's break down the concept with this example.

If I have 80 lakh today, I could buy a car, and if I am fortunate, I could save some money and invest in land in the Terai region. But if I had that same amount of money in, let's say, 2015, I could have bought a luxury car and still saved enough money to buy some land in Kathmandu.

From this example, we can easily understand the concept of the Time Value of Money. The value of money does not remain constant, but it fluctuates over time. In many cases, the value of money decreases, but sometimes the value of money increases, depending upon external factors.

So, that was the theoretical approach. Now let's look at the mathematical approach.

If we will receive an amount of 50,000 after 5 years from a bond, and you are required to invest 25,000 in that bond, and the discount rate (required rate of return) is 15%, what is the present value of the bond today?

Before we solve it, we need to understand the concept of the discount rate or required rate of return. It simply means the minimum return an investor requires to make the investment worthwhile. So, the investor discounts the future amount every year by that percentage to account for the changing value of money.

So, we simply have:

Future Value = 50,000

Time = 5 years

Discount Rate = 15%

Present Value = Future Value / (1 + r/100)^years

PV = 50,000 / (1 + 0.15)^5

PV ≈ Rs. 24,858.82

So, you should not invest in this bond because you have to invest Rs. 25,000, but its present value is only Rs. 24,858.82.

This concept is hard for a first-time reader to process. Simply understand that you will receive Rs. 50,000 after five years, but you have to pay Rs. 25,000 today. However, if you had invested that Rs. 25,000 in something else, you could have earned a fixed return of 15%, which becomes your opportunity cost. So, you need to earn at least more than 15% to make a profit.

Now, if we discount the Rs. 50,000 by 15% for the fifth year, then discount that amount by another 15% for the fourth year, and continue this process until the present day, we get the present value. Similarly, by following the same pattern in reverse, we can find the future value if we know the present value.

Understanding TVM helps you:

• Make better investment decisions.

• Compare different financial opportunities.

• Plan for retirement.

• Calculate loan costs.

• Understand interest rates.

• Avoid poor financial decisions.

• Build wealth over time.

Key Takeaways

• Money today is worth more than the same amount in the future.
• Inflation reduces purchasing power.
• Investments help money grow over time.
• Future Value estimates how much money will grow.
• Present Value determines today's worth of future cash.
• The Time Value of Money is a fundamental concept in finance, investing, and business.

Conclusion

The Time Value of Money is one of the foundations of financial literacy. Whether you're saving for retirement, evaluating an investment, or taking out a loan, understanding TVM can help you make smarter financial decisions. The earlier you invest, the more time your money has to grow through the power of compounding, making time one of the most valuable assets in wealth creation.

 

MAJOR AMENDMENT IN EXEMPT INCOME AND CONCESSION

 

We know that there is huge change in the government which has been directly affected the provisions of the income tax . The major amendments are ;

CHANGES IN SECTION 10 & 11

We know that section 10and 11 contains the exemption and concessions 

Section 10 : New exempt income clauses added: (Jha1) Income from disposing of land or private building donated free of cost to Government of Nepal, Provincial Government or Local Government;

 (Jha2) Interest income earned by a financial institution wholly owned by a foreign government, established for nonprofit purpose, from loan investments in Nepal; 

 (Jha3) Income earned by water supply and sanitation consumer organizations registered under the Water Resources Act, 2049, As per their objectives.

 (Tha1) Income earned in as per their objectives by universities established and operating in Nepal.

Whereas section 11 contains different addition and changes which are listed as :

11(2Ka) : Annual interest income up to rs.25,000 earned from deposits in micro-finance institutions, rural development banks, postal savings banks and cooperatives as prescribed in subsection (2) (i.e operating in rural municipalities) is exempt from tax additionally Provided that, if the interest amount exceeds twenty five thousand rupees, tax shall be imposed on such excess interest amount

11(6ka) new definition, Agriculture business means crop farming, fruit cultivation, animal husbandry, fisheries and beekeeping business.

SECTION 10 AMENDMEND EXPLAINATION

As we can see there are major changes in concession and exemption . In exemption there are few additional exemptions like income from donation of land and private building to government which encourage the public donation and reduces the burden of the donner as well as promotes government for developmental project , Exemption in interest earned by financial institution owned by foreign govt. also helps the nation to gain the foreign investment and as well as gain the credibility in the international market . There is also exemption on the income earned by water supply sanitation consumer organization which helps to promote the water facility all over the nation . At last the income earned by the universities as per their objectives which helps to promote the education and indirectly helps in the relief of student burden .

SECTION 11 AMENDMEND EXPLAINATION

There is not a much of amendment in this section . We can see in 11(2KA) that the annual interest up to 25000 is exempt and above it shall be taxable which was previously implied but not explain din the section . Also we can see there is an addition of the definition of Agricultural business .

THE COVID CRASH IN NEPAL

 

The Day Nepal's Economy Changed Forever: From Record Growth to the COVID-19 Crisis

Picture yourself standing in Kathmandu in 2017.

The streets are busy. New buildings are rising across the city. Shops are full of customers, hotels are welcoming tourists from every corner of the world, and businesses are finally breathing a sigh of relief after years of hardship.

Just two years earlier, Nepal had suffered one of the darkest periods in its modern history. The devastating 2015 earthquake claimed thousands of lives, destroyed homes, schools, and businesses, and left the economy struggling. Soon after came the border trade disruption, making it even harder for the country to recover.

By 2017, the nation had staged one of its strongest economic recoveries in decades. The economy grew by an impressive 7.5 percent, the highest growth rate in more than twenty years. Farmers enjoyed excellent harvests thanks to favorable weather, reconstruction projects created thousands of jobs, electricity shortages were finally easing, and confidence was returning.

It felt as though Nepal had turned the page on one of the toughest chapters in its history.

The momentum continued.

In 2018, the economy expanded by 6.7 percent, followed by another strong 6.1 percent in 2019. Tourism reached record levels, with more than 1.19 million international visitors exploring Nepal's mountains, temples, and cultural heritage. Hotels were fully booked, trekking agencies were thriving, and restaurants were filled with travelers.

Families also benefited from the steady flow of remittances sent home by Nepalis working abroad. These earnings supported household incomes, strengthened foreign exchange reserves, and kept local economies moving.

For many people, Nepal's future looked brighter than it had in years.

Then came 2020.

At first, the reports of a new virus seemed like a distant problem. But within weeks, the world had changed.

Flights were grounded.

Borders closed.

Hotels locked their doors.

The trekking trails that once welcomed thousands of adventurers fell silent. Everest expeditions were cancelled. Streets that had once been crowded with tourists suddenly became empty.

Across the country, businesses struggled to survive. Restaurants had no customers. Retail stores closed. Factories slowed production. Public transport stopped running.

For thousands of workers, the biggest concern was no longer career growth—it was simply finding enough income to support their families.

Many Nepalis working overseas also lost their jobs and returned home, adding further pressure to an already fragile economy.

For the first time in decades, Nepal's economy went backwards.

Instead of growing, the country's GDP contracted by 2.4 percent.

It was a moment few had imagined possible just one year earlier.

But Nepal was not suffering alone.

India experienced one of its deepest economic contractions in history. The United States entered a severe recession despite launching enormous financial rescue packages worth trillions of dollars. Around the world, governments faced the same difficult question: how do you protect both lives and livelihoods during a global pandemic?

Nepal faced an even greater challenge.

Unlike wealthier nations, it could not afford massive stimulus programs. Instead, the Nepal Rastra Bank focused on keeping the financial system stable by lowering interest rates, restructuring loans, and providing liquidity to banks so that businesses and borrowers could continue operating.

These measures did not erase the pain, but they prevented an even deeper financial crisis.

As vaccines became available and restrictions gradually eased, signs of hope began to return.

Hotels reopened.

Domestic businesses welcomed customers again.

Tourists slowly returned to Nepal's mountains and cultural sites.

Digital payments became a normal part of everyday life, changing the way people bought goods, paid bills, and transferred money.

The economy also began to recover.

GDP growth rebounded to 4.8 percent in 2021 and improved further to 5.6 percent in 2022. Although growth slowed again in the following years because of global economic challenges and tighter financial conditions, Nepal had already demonstrated something remarkable.

Its economy had survived one of the greatest global crises of the modern era.

The COVID-19 pandemic taught Nepal lessons that no textbook ever could. It showed the risks of relying heavily on tourism, highlighted the importance of a strong healthcare system, accelerated the adoption of digital financial services, and reminded policymakers that economic resilience is just as important as economic growth.

Looking back today, the story of Nepal during COVID-19 is not simply about percentages, GDP figures, or financial statistics.

It is the story of millions of ordinary people who adapted, sacrificed, and persevered through extraordinary circumstances.

Economic numbers tell us what happened.

But the resilience of the Nepali people explains how the country found its way forward. 

                       

THE ALMOST GREAT DEPRESSION , 2008

 September 15, 2008 , A lovely morning in USA . Everybody was heading toward their office but what they see is cardboard box in their desk . Nobody knew that they will be jobless in a single day , The reason for this is Lehman  Brothers(one of the largest investment banks in the world at that time)collapse . Let's go through the background of this story.

Few year back from this incident America was going through the trend -A trend of buying houses . As per the American thinking  that house were the safest investment which will never go down and somehow they were right but who knows they were wrong . So in order to obtain these houses they were taking a huge amount of loans and in other hand banks were also providing these loans at lower interest rate . the mortgages were given to every individual irrespective of their income level , bad debt history , poor saving ,ETC 

The banks were trying to play smart at this situation and bunddled these mortgages into the investments and sold them to the investors which is also called DEBT SECURITIZATION . this process of taking loan was at it's high . People were buying one after another homes thinking that the price will never fall but who knows they were wrong and the day came in which the house prices were falling down rapidly which means the debtors were not able to make a payment of their loan and suddenly a panic has been started in the mind of the investors who invested in the mortgages . They were in dilemma which bank is trustworthy , This panic created a shortage of money as the investors were trying to pull their money from the banks . 

Banks were in a huge trouble , In one hand the debtors were not able to make payment and on other hand the investors were pulling their money from the bank . It was sure that this panic could cause a huge damage in the banking system and it has eventually happened . One of the biggest bank of the US Lehman Brothers filed for bankruptcy on September 15, 2008 . hen the largest bankruptcy in U.S. history. Employees carried their belongings out in boxes. The stock market crashed .This wasn't just America's problem anymore, European banks had bought the same investments, Asian markets crashed, Global trade slowed, Factories closed, Businesses failed, Families everywhere felt the consequences.

The government at last saves the day through Troubled Asset Relief Program of $700 Billion and central bank plugged trillions of dollars.

switzerland VS Argentina (Photo feature)

 Julian Alvarez sent defending champion Argentina back to the World Cup semifinals with a long-range strike in the 112th minute against Switzerland, while another goal by Lautaro Martinez with seconds left in extra time only served to make the 3-1 victory look a whole lot easier than it was Saturday night.

Alexis Mac Allister also scored off a corner kick from Lionel Messi, helping La Albiceleste gut out another down-to-the-wire thriller and advance to play England on Wednesday in Atlanta. The Three Lions beat Norway 2-1 earlier in the day. Messi's nine-game World Cup scoring streak ended, but his pursuit of a second World Cup title continues. With Argentina and England joining France and Spain in the semifinals, it's the first time the top four teams in the FIFA rankings have all advanced that far. The game swung in the second half on a call sure to rile up critics who believe Argentina has been favored by officials in this tournament. The Swiss had just tied the game on Dan Ndoye's goal in the 67th minute when Leandro Paredes was shown a yellow card for a tackle on Breel Embolo. But video showed the Swiss player falling before the Argentina midfielder made contact with him, and since Embolo received a yellow card earlier in the match, he was sent off and Switzerland was left to defend with 10 players. It was the second time a yellow card has been overturned using the “mistaken identity” protocol at the World Cup. The rule allows the video assistant referee to intervene when an incorrect player is shown a yellow or red card. Argentina, which is riding a 12-match World Cup unbeaten streak, had looked quite beatable in the knockout rounds. Lionel Scaloni’s squad needed extra time to squeak past tiny Cape Verde before rallying from a 2-0 deficit in the final 11 minutes of regulation to beat Egypt and earn a date with Switzerland at the home of the Kansas City Chiefs.

The Swiss, meanwhile, were playing their first World Cup quarterfinal since 1954. They still have never made a semifinal, nor have they beaten Argentina in eight meetings — three of those in the tournament that matters the most. Argentina has made its base for the past month in Kansas City, training at the home of MLS club Sporting Kansas City while winning over thousands of new fans. And on Saturday night, they filled Arrowhead Stadium for the second time this tournament, hoping to see Messi make more magic after his hat trick against Algeria in the same building a few weeks ago. It was brutally hot and humid throughout the day, but the temperatures began to fall with the setting sun, producing a picturesque setting for the 100th match of an expanded World Cup, and the final match of the quarterfinal round. The defensive-minded Swiss had only conceded three goals in five games, and they dominated the ball in the opening minutes. But leave it to Messi, whose eight goals in the tournament are tied for the most with France’s Kylian Mbappé, to send a jolt through a heavily pro-Argentina crowd that included Chiefs quarterback Patrick Mahomes. He helped to earn an early corner kick with some nifty footwork, then delivered the ball that Mac Allister turned into a 1-0 lead. For most of the match, the Swiss struggled to break down an Argentina back line that had conceded two goals apiece in its last two games. And it didn’t help their cause that they were playing without Johan Manzabi, one of their best goal-scorers, who remained out with a knee injury after missing their round of 16 penalty shootout win over Colombia. But after forcing Argentina goalkeeper Emiliano Martinez into making a couple of tough second-half saves, the Swiss broke through when Ricardo Rodriguez slipped a tidy pass to Ndoye and he easily found the back of the net. Whatever momentum the equalizer gave the Swiss disappeared with Embolo's red card a few minutes later. Argentina turned up the pressure with Mac Allister missing wide with a header in the 89th minute, and Messi creating an opportunity in front of the goal that he sent just wide in the second minute of stoppage time, leaving the game tied into extra time. Just as they have all tournament, La Albiceleste found a way to keep their quest for back-to-back championships alive.

Bellingham double as 'lucky' England beat Norway to reach World Cup semi-finals

 

Biratnagar (Nepal)

Jude Bellingham scored twice as England staged an extra-time escape act to defeat Norway 2-1 on Saturday and book their place in the World Cup semi-finals. Bellingham's 93rd-minute winner settled a nerve-jangling quarter-final played in sweltering conditions at Miami's Hard Rock Stadium. But England, who will face either Argentina or Switzerland in the semi-finals on Wednesday, rode their luck to keep their World Cup dream alive.

"We made life very, very difficult for ourselves today," England manager Thomas Tuchel said afterwards. "The result is fantastic. The last four is amazing, but not happy with the performance... we were very lucky today." Bellingham's equaliser in first-half stoppage time came after a goal kick from Norway goalkeeper Orjan Nyland struck an overhead television camera cable -- an incident that should have led to the goal kick being re-taken. England also received another huge break when Torbjorn Heggem's 55th-minute goal that put Norway 2-1 up was ruled out after a VAR review for a shove by Erling Haaland on Elliot Anderson. England, looking increasingly weary in punishing temperatures that had reached 108 Fahrenheit (42 degrees Celsius) on the heat index, retook the lead in the 93rd minute, when Nyland spilled substitute Morgan Rogers' long-range shot and Bellingham drove in the rebound. The match had been billed as a duel between England striker Harry Kane and Norway counterpart Haaland, but the expected confrontation never materialised. Haaland was substituted in extra-time as Norway -- who had taken the lead on 36 minutes through Andreas Schjelderup's rasping shot -- chased an equaliser in vain. England benefited from a let-off in the 44th minute, when Norway broke swiftly with Alexander Sorloth and Haaland bearing down on an isolated John Stones. Sorloth though inexplicably chose to go it alone rather than pass to in-form Haaland in acres of space and the chance was gone. Norway were made to pay in the first minute of first half stoppage time when Bellingham surged into the area and rifled home a low shot to crown the attack launched after Nyland's goal-kick struck the overhead camera cable. While FIFA later issued a statement saying there was "no evidence" the ball had hit the cable, Norway coach Stale Solbakken was adamant. "That was unlucky for for us," Solbakken said. "The ball fell straight down from the sky, so it changed its direction. But we can't do anything about that. I don't think we will play the game again. So, that's that's how it is." The win raises the prospect of a titanic World Cup showdown between England and arch-rivals Argentina. - 'Keep dreaming' - Defending champions Argentina face Switzerland in Kansas City later Saturday as they aim to edge closer to completing their dream of back-to-back World Cups. The South Americans cruised through the group stage but since entering the knockout rounds, frailties have crept in as they were pushed to breaking point by first World Cup debutants Cape Verde and then Egypt. Lionel Messi, who turned 39 during the group phase, has again been the talisman for the South Americans, his genius repeatedly getting his team out of tight spots. But there is just a suggestion the Swiss, a well-organised unit marshalled by midfield general Granit Xhaka, could exploit any weariness and cause them problems at Arrowhead Stadium. Xhaka, 33, for his part said his message to the Swiss supporters was simple. "Regarding the fans, keep dreaming. I am a person who always dreams, and dreams can come true," he said. "Sometimes you need to do something new. You really need to push your limits if you want to beat Argentina. And I'm convinced my team is ready."