Inland Revenue Department (File photo)
KATHMANDU: Twenty billion rupees is likely to be lost in the current income tax owing to the income tax limit proposed by the government in the fiscal budget 2079/80.
Ritesh Kumar Shakya, the director general of the Inland Revenue Department, said that the existing provision of the Inland Revenue Department is estimated to slash the revenue by Rs 20 to 25 billion.
Only 1 percent tax will be levied on the person earning up to Rs 600,000 annually from the next Fiscal Year, according to the proposed fiscal budget.
Such a limit has been set at 500,000 for a single person.
At present, couples are required to pay 1 percent for an annual income tax of Rs. 450,000 and unmarried and single persons are required to pay more than 1 percent income tax on income above Rs 400,000.
According to this provision, when married persons earn Rs 600,000 annually, they have to pay only Rs 6,000 in taxes.
Earlier, they had to pay a tax of Rs 24,500 on the same earnings.
Similarly, when single persons earn Rs 500,000, they had to pay Rs 14,500 in tax but now they have to pay only Rs 5,000.
Accordingly, only 10 percent income tax has been levied on those earning Rs 200,000 more than the set limit.
Earlier, only 10 percent tax was levied on income up to Rs 100,000.
According to the new ceiling, couples earning up to Rs 800,000 now have to pay only Rs 26,000 in taxes. Earlier, when earning Rs 800,000, one had to pay Rs 64,500 in taxes.
Similarly, when single persons earn up to Rs 700,000 they have to pay only Rs 16,000 in taxes. Earlier, the tax was Rs 54,000.