The Roof of the World
The Himalayan Kingdom
Land of Thunder Dragon
The Crucial of Asia
The present rate of corporate tax is 25 percent. Howerve, industries, other than cigarettes, bidi, cigar, khainy, tobacco, alcohal or beer, will not be imposed more than 20 percent income tax on their industrial come. The tax rate for commercial banks and financial institutions is 30 percent.
The single or married status of an individual determines the relief to which he/she is entitled. Taxable income includes profits from a business, income from salaries along with other benefits provided by the employer, income from house rent, interest, dividends and other sources. The first Rs. 50,0000 of income of a married couple of family are exempt form income tax. In the case of an individual, the exemption limit is 40,000. The rats of income tax are as below. Rates of Income tax 15 percent on the first additional Rs. 75,000 25 percent on balance.
Royalties, technical service fees and management fees will be taxed only at a concessionary rate of fifteen percent, Income tax will not be levied on the interest on foreign loan. DEDUCTIONS The Income Tax Act of 1974 has provision for deduction of expenses from taxable corporate and personal income. Expenses wholly and exclusively incurred in the generation of income are deductible from taxable income. Furthermore, five percent of the total gross income of industrial units will be allowed for deductions for advertisement, entertainment and other contingencies.
Industries are entitled to depreciate the fixed assets either on a straight line method or on reducing installment system. All plant, machinery and equipment qualify for depreciation at the rat of five to twenty five percent per annum. While, calculating depreciation on the fixed, assets, industries shall be entitled to depreciated additional one third of the rate of depreciation that prevails to others.
In order to replace the existing sales tax by value added tax the Department of value added tax (VAT) has been established by which tax system will be made more realistic and transparent. The tax will be ascertained on the basis of value addition and based on records.
In order to avoid the double taxation on income of foreign investors, the government will take necessary action to conclude, agreements for the avoidance of double taxation with the countries of the concerned foreign investors. At present, agreements for the avoidance of double taxation have been concluded with India, Norway and Thailand.