 Bishnu Pd Khatiwada, Lecturer, NCCS & KMC (9843470453)

Chapter 8 + Chapter 4

Income from Employment

Sources (Heading) of Taxable Income

1. Income from Employment 
2. Income from Profession
3. Income from Business
4. Income from Investment
5. Income from Windfall gain (Causal gain)
We discuss income from employment in this chapter and other sources
will be further discussed later in other chapters.

1. Income from Employment

Employment is contract between two parties i.e.employer and employee.

Jobholder or
Office or
Time, Skill, Mental and Physical Energy

Employee or
Employer Monetary and Non-monetary benefits Worker

Expenses incurred
Personal expenses
Remaning Amount Family expenses
Taxable Income Allowed by IT Act 2058
Social expenses
Saving for retirement

Certain …% Tax paid to

Government

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  Bishnu Pd Khatiwada, Lecturer, NCCS & KMC (9843470453)

3 Steps Solution Format

Step1: Assessable Income from Employment
Step2: Statement of Taxable Income
Step3: Tax Liability and Tax Payable

Step1: Assessable Income from Employment

The sum of all the benefits (monetary and Non-monetary) received by
an employee from his employer(office) in the income year 2078/79 is
his/her assessable income from employment.

This Fiscal year  2079/80 Assesment Year

Previous fiscal year  Income year 2078/79

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  Bishnu Pd Khatiwada, Lecturer, NCCS & KMC (9843470453)

Computation of Assessable Income from Employment

of Mr./Mrs.............. for income year 2078/79
Particulars Amount(Rs)
Salary (Rs ........ P.M. × 12 months) 

Dashain Kharcha (equal to 1 month Salary) 

P.F. Contribution by employer (Total Salary × 10%) 

Dearness Allowance (Rs … p.m. × 12 months) 

Monetary Benefits from Office

Entertainment Allowance (…% of Total Salary) 

Family Allowance (p.a.) 

Foreign Allowance ($......× Rs…. /$) [step 2 df ;Demg]] 

Remote Allowance 

........ allowance (except Meeting Allowance and TADA) 

Bonus Received 

Commission Received 

Overtime pay / Advance Salary 

Leave Pay/Salary in lieu of leave 

Pension received from previous job 

Vehicle(Car) Facility (Total Salary × 0.5%) 

Accommodation/House Facility (Total Salary × 2%) 

Quantified Benefits from Office

Gift/Prize/goods/assets receive relating to employment 

Interest benefit (under payment of interest) 

Cook man, helper, Gardner etc. Facility 

............ paid/reimbursement/borne by office 

Other income(benefits) relating to employment 

Assessable Income from Employment 

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  Bishnu Pd Khatiwada, Lecturer, NCCS & KMC (9843470453)

Income not included (Step 1 df /fVg gldNg] s'/fx¿)

 Office af6 k|fKt x'g] Benefits t/ Step -1df /fVg gldNg] Points
 Meeting Allowance (fee) and Travelling Allowance & Daily(Pocket) Allowance [TADA]
 Petty expenses provided by office (eg. tea, stationeries, tips, prizes) or emergency
medical treatment up to Rs 500 at a time.
 Official or Professional Training Provided by Office
 Reimbursement of official expenses/business promotion expenses/Official Tour
 Meals (Tiffins), dinner, picnic and refreshments or transportation staff Bus for going
office provided to employees at business premised provided to all employees under
equal terms
 Official dress which is not appropriate to wear outside office (eg. apron)

 Final Withholding (Final TDS)(Sec-92)

 Dividend received from resident company
 Return from Mutual Fund
 Interest received from bank/financial institution/provident fund/Saving Account/Fixed
deposit/debenture/bond/government securities etc.
 Meeting allowance or fee, Travelling allowance & Daily(pocket) allowance (TADA)
 Part time lecture/teaching/Occasional teaching/Guest Lecturer
 Income from Examining Answer Sheet and Setting Question Paper
 Causal Gain/Windfall gain (eg. Lottery, money found in street etc.)
 Gain on maturity of Life(Investment) insurance
 Gain on retirement contribution(Approved or unapproved)
 House or Land Rent Received
 Rent received from public vehicle and transport service

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