Installment tax,

Self-assessment
Amended assessment WHT/TDS
Jeopardy assessment TCS
Installment
Self-assessment
Reassessment
Jeopardy Assessment
Tax Payment Methods – Sec. 87 -102
Withholding tax (WHT) Sec. 87 – 93
Pay As you Earn
Tax collection at source Sec. 95A
(TCS) PAYE concept
Installment tax Sec. 94 - 95 Pay As you Earn
Self-payment
Self – assessment Sec. 96 - 99
Self-payment
Jeopardy assessment Sec. 100
Instructed -
Re-assessment Sec. 101 -102
payment
Installment tax – Sec. 94-95
Person having annual tax more Up to Paush- 40% of
than Rs. 7500 from business end estimated tax
and/or investments Regular Up to 70% of
(D3) Chaitra-end estimated tax

Up to Ashadh 100% of
Installment end estimated tax
tax
t Up to Paush-
n
cie nt – 18 TOT end
u ffi e 1 l ow
ns llm /s (D2) b e
I ta t u
s Up to Ashadh ee
in res S
n te
i
Estimated tax Rs.20,00,000
Example
Paid on Paush Rs. 800,000
on Chaitra Rs. 600,000 When does principal-base change?
on Ashadh Rs. 600,000 i. By paying (-)
Real tax computed for the year Rs. ii. By new installment (+)
30,00,000 and fully settled in
Manshir.
Installment To be paid Paid Deficit Delay Interest

I - Paush 10,80,000 800,000 280,000 3 months 10,500

II - Chaitra 18,90,000 14,00,000 490,000 3 months 18,375

IIIInterest
- Ashadh @15% p.a. for a month
27,00,000 20,00,000and part of month
700,000 on insufficient
3 months 26,250
installment
Principal
Interest(P) = Insufficient
on insufficient installment
installment u/s 118 55,125
(90% of
Magh Interest
1 oninstallment
delay
Baisakh 1 of
payment real
of tax u/stax)
119 1
Srawan 25,000
30,00,000*90%*40%
Time1 (T) = delay
Falgun Jesthmonth
1 andBhadra
part 1of month
30,00,000*90%*70% Chaitra 1 Ashadh
Rate
1000,000*2/12*15% (R)1 = 15%p.a. Ashwin 1
 Example
Paid on Manshir Rs. 800,000
on Baisakh Rs. 600,000
on Bhadra Rs. 600,000
Self-assessment (real tax) computed for the year Rs.
30,00,000 and fully settled in Manshir.
Installment To be paid Paid Deficit Delay Interest

I - Paush 10,80,000 800,000 280,000 3 months 10,500

II - Chaitra 18,90,000 8,00,000 10,90,000 1 months 13,625

II - Baisakh 18,90,000 14,00,000 4,90,000 2 months 12,250
III - Ashadh 27,00,000 14,00,000 13,00,000 2 months 32,500

III - Bhadra 27,00,000 20,00,000 700,000 1 months 8,750

Magh 1 Baisakh 1 Jesth 1 Srawab 1 Ashwin 1
Falgun 1 Just Ashadh 1 Interest on insufficient
Bhadra 1 installment u/s 118
The deadline 77,625
Chaitra 1 One month Two month Two month month
30,00,000*90%*40% Interest on delay payment of tax u/s 119 25,000
 Installment tax – meaning of tax paid

nt: Almost each

x p a y m e WHT
Ta payment
E a r l i e r year PAYE
1. s ta l l m e nt
ri n
2. Earlie TCS All applicable
3 . W HT h e ld Tax
1. W i t h
D e p o s ited Paush, Chaitra,
2. Ashadh
4. TCS ted
Installment
1 . c o l l e c Medical tax x ?
e p o s ited credit ta
2. D l e
l t a x c r e di t ti p
. M e d i ca t ul
5 sta l l m e n M
C u r r e n t in
6.
Self assessment tax – Sec. 96 - 99
Presumptive
What is? taxpayer (D1)
Who?
How? Business TOT (D2)
Resident
natural person Non-business Large or mixed
(D4) (D3)
Self –
assessment
Non-residents
Residual
(D3)
Entity
 Self-assessment – Sec. 96 -99
Presumptive tax (2077/78)
Conditions: Resident natural
person having business in Nepal
only and the turnover up to Rs. 20
lakh and profits up to Rs 2 lakh
VAT unregistered, non-professional
Tax:
Rural municipal – Rs. 2500
Urban municipal – Rs. 4000
Metro and sub-metro – Rs. 7,500
D1
Presumptive tax (2078/79)
Conditions: Resident natural
person having business in Nepal
only and the turnover up to Rs. 30
lakh and profits up to Rs 3 lakh
VAT unregistered, non-professional
Tax:
Rural municipal – Rs. 2500
Urban municipal – Rs. 4000
Metro and sub-metro – Rs. 7,500
Self-assessment – Sec. 96 -99 D1

Example: Presumptive tax

Arun Impex has annual transaction (2078/79 and 2077/78 both year)
of Rs. 18 lakh and profit of Rs. 2 Rural municipal – Rs. 2500
lakh.
Urban municipal – Rs. 4000
How to pay income tax, if his firm
is in: Metro and sub-metro – Rs. 7,500
i. Kathmandu
ii. Lalitpur
iii. Bharatpur
iv. Banepa
v. Dhudhauli Rural municipality
Self-assessment – Sec. 96 -99 D2
Tax on turnover (TOT) – 2077/78 Tax on turnover (TOT) – 2078/79
Conditions: Resident natural person having Conditions: Resident natural person having
business in Nepal only and the turnover business in Nepal only and the turnover
more than Rs. 20 lakh up to Rs. 50 lakh more than Rs. 30 lakh up to Rs. 100 lakh,
VAT unregistered, non-professional
VAT unregistered, non-professional
Tax:
Tax:
Presumptive tax up to Rs. 30 lakh
Presumptive tax up to Rs. 20 lakh Rs. 30 Above Rs. 50
Above Rs. 20 lakh: lakh – Rs. lakh – Rs.
50 lakh: 100 lakh:
Goods seller profit margin up to 3% - 0.25% Goods seller profit 0.25% 0.30%
of turnover margin up to 3%
Goods seller profit margin above 3% - Goods seller profit 1% 0.8%
0.75% of turnover margin above 3%
Service seller - 2% of turnover Service seller 2% 2%
Self-assessment – Sec. 96 -99 D3
Tax

s s
e
is n son
u e r
n -b l p
Nep. Sourced o ra 4
Res. NP
Yes Business only Yes
VAT registered N tu D
?
?
? No
na

Turnover up to 20 – 50 TOT
Nepal or foreign
Non-res. Np Yes Rs. 50 lakh lakh D2
Emp. / Bus./ Inv.
Entity

Up to Rs. 20 Lakh
Regular self
assessment No Presumptive 2078/79
D3 D1 Presumptive
TOT
 Self-assessment – Sec. 96 -99
When to file income tax return (Sec.99)
Within three months from end of income
year.
If not filed, deemed-self assessment at the
amount already paid.
Delay filing is subject to fee u/s 117
If applied with reasons, department may
extend the filing due date up to three
months
Extension will be usable just to waiver of
fee – not for payment of tax nor deemed
self-assessment
Turnover more than Rs. 1 Crore needs to
authenticate income tax return.
n ?
h e
W
Waiver to file income tax return (Sec. 97)
1. Person not having taxable income
2. Person having FWHT only
3. Employee having single resident
employer at a time
4. NP – Transporter, if not registered in
VAT or sole proprietorship firm
5. NP having income from NBCA only
NP having turnover more than Rs. 40
lakh needs to file the income tax return.
 Self-assessment – Sec. 96 -99
Tax payment
All the remaining tax needs to pay at the
due date of filing income tax return

Delay payment is subject to interest

@15% for month and part of month basis
u/s 119.
Paid on Manshir Rs. 800,000 3
on Baisakh Rs. 600,000 D Installment (WHT, TCS,
on Bhadra Rs. 600,000 Installment) and Annual
Self-assessment (real tax) computed for the year tax (remaining)
Rs. 30,00,000 and fully settled in Manshir.
Installment To be paid Paid Deficit Delay Interest

I - Paush 10,80,000 800,000 280,000 3 months 10,500

II - Chaitra 18,90,000 8,00,000 10,90,000 1 months 13,625

II - Baisakh 18,90,000 14,00,000 4,90,000 2 months 12,250
III - Ashadh 27,00,000 14,00,000 13,00,000 2 months 32,500

III - Bhadra 27,00,000 20,00,000 700,000 1 months 8,750

Interest on insufficient installment u/s 118 77,625

30,00,000*90%*40% Interest on delay payment of tax u/s 119 25,000

Paush –end: TOT tax on the turnover up to Paush-20 TOT installment
Ashadh –end: TOT tax on the turnover up to Ashadh – 20 e pa
n
actual plus estimated till Ashadh end less earlier Ba 7/78
7
installment (eating sugar! ha! Ha!! Ha!!!) 20
Condition Sales Paush – 20 GP Sales Ashadh – 20 GP Paush Inst. Ashadh Inst.

Goods 18,00,000 3% 40,00,000 3% 4,000 5,000

Goods 22,00,000 3% 40,00,000 3.01% 4,500 14,500

Goods 22,00,000 3% 40,00,000 3.% 4,500 4,500

Goods 22,00,000 3% 22,10,000 3.01% 4,500 1075
Goods 22,00,000 3.01% 22,10,000 3.% 5,500 (975) ~ 0
Goods 42,00,000 3.01% 42,10,000 3.% 20,500 (10,975) ~ 0
Up to Rs. 20 lakh - Rs.4,000
Goods 22,00,000 3.01% 42,10,000 3.% 5,500 15,075
Remaining 20 Lakh@0.75%
Up to Rs. 20 lakh – - Rs.1500
Rs.4,000
Up
UptotoRs.
Rs.20
20lakh
lakh- – Rs.4,000 Total
Rs.4,000 Remaining Rs. 19,000
Rs. 20 lakh @0.25%Rs. 5000
Remaining 2 Lakh@0.25% - Rs.500 Less: Paush inst. Rs. 4,500
Total Rs. 4,500 Current inst. Rs. 14,500
 Assessment, Jeopardy assessment,
Reassessment timing

2078-04-01 - 2078-06-30
Self-assessment

2077-04-01 - 2078-03-31 2078-07-01 - 2082-06-30

self- jeopardy Re-assessment

2078-01-01 2079-01-01 2080-01-01 2081-01-01 2082-01-01

2077-04-01 2082-03-31

2082-05-06
Jeopardy reassessment
2077-04-02 2078-06-30
Dept. jeopardyassessment
Reassessment/Amended assessment Sec 101-102

After Self-assessment due date (From 1st of Kartik) to four years

Income year: 2077/78
Filing due date (self-assessment): 2078 Aswin-end
Jeopardy date: Self-jeopardy till 2078 Ashadh, departmental: till 2078 Aswin-end
Reassessment: four years from filing due date – 2078 Kartik 1 to 2082 Aswin-end
Processes (same as VAT with income tax law reference):
1. Risk-based Selection [by the Department itself]
2. Notice for information and documents u/s 83 [Department to taxpayer]
3. Submission within 15-days [taxpayer to the Department]
4. Full audit [by the Department itself]
5. Notice for response – clarification and further doc. u/s 101(6) [Department to taxpayer]
6. Reply within 15 days – submission of clarification and doc. [taxpayer to the Department]
7. Amended assessment notice u/s 102 [Department to taxpayer]
Comparative reassessment/Amended assessment:
Income tax Vs. VAT

Income tax VAT Impact

Step 1: Selection of taxpayer Sec.101 Sec.20 Combined
Step 2: Notice for documents Sec.83 Sec.23 Separate
Step 3: Submission of doc. 15 d Sec.83 Sec.23 Same

Step 4: Full-audit Sec.101 Sec.20 Combined

Step 5: Notice for clarification Sec.101 Rule 29(1) Separate

Step 6: Reply & supporting-15d Sec.101 Rule 29(2) Separate

Step 7: Reassessment notice Sec.102 Rule 29(3) Separate
Comparative reassessment/Amended assessment:
Income tax Vs. VAT

Self deemed Impact

WHT/TCS/Installment paid Rs. 20 lakh Rs. 20 lakh
Self-assessed tax Rs. 30 lakh Rs. 20 lakh Sec.99
Reassessed tax Rs. 30 lakh Rs. 30 lakh Sec.101/102
Addition due to reassessment Re. 0 Rs. 10 lakh Sec. 101/102
Fee u/s 120 Re.0 Rs. 10 lakh Sec. 120
Fee u/s 117(2) Re.0 0.1% of tnrv. Sec. 117
Interest on insufficiency of inst. Rs.55,125 Rs. 55,125 Sec. 118
Interest on delay payment Rs.25,000 @15%p.a. Sec. 119
Jeopardy assessment – Sec 100, 102

As the department
Bankrupt or Leaving Nepal for Closing income
deemed fit for
winding up long-time source/business
jeopardy assessment

Before Ashadh Taxpayer knows – Self jeopardy assessment

Onlyasdepartment
same knows it
Part of Income year Self jeopardy as Sec. 99

Department knows on its own source

Before Ashoj Departmental jeopardy assessment

Full year Departmental Assessment from IY starts to date of jeopardy
jeopardy Seven – days notice for response

After Aswin
Regular self assessment if jeopardy assessment for part
of income year
Reassessment No regular self-assessment if jeopardy for full year, but
reassessment deadline is four years from date of
jeopardy assessment.
Tax Payment Methods – Sec. 87 -102
Withholding tax (WHT) Sec. 87 – 93
Pay As you Earn
Tax collection at source Sec. 95A
(TCS) PAYE concept
Installment tax Sec. 94 - 95 Pay As you Earn
Self-payment
Self – assessment Sec. 96 - 99
Self-payment
Jeopardy assessment Sec. 100
Instructed -
Re-assessment Sec. 101 -102
payment