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 .