Changes in Section 11 of Income Tax Act (Finance Ordinance 2080/81) 👇👇👇

# incometax# ammendment# financeordinance# budget

﻿
SectionPrevious ProvisionAmended provision
11(1)If any income is earned by carrying on agricultural business, business of dehydrating vegetables, and cold storage business by any firm, company, partnership firm, and other corporate body, 100 percent tax on applicable income tax shall be exempted.If any income is earned by carrying on agricultural business, business of dehydrating vegetables, and cold storage business by any firm, company, partnership firm, and other corporate body, 50 percent tax on applicable income tax shall be exempted.
11(3)(gha)Tax exemption shall be provided as below to a person engaged in commercial transactions of electricity: 100 % tax exemption for the first 10 years from the date of starting of commercial transaction and 50 % tax exemption for next 5 years shall be provided to the licensed person starting commercial production and distribution of hydroelectricity, electricity from solar, electricity from wind, and bioelectricity within Chaitra 2083. Provided, 100 % tax exemption for the first 15 years and 50 % tax exemption for the next 6 years shall be provided to reservoir-based and semi reservoir-based hydropower projects with a capacity higher than 40 MW completing financial closure within Chaitra end, 2085.The time limit of 2083 has been changed to 2084. For the proviso, the time limit is still 2085 and in addition to reservoir-based and semi reservoir-based hydropower projects lower level hydropower operated in tandem operation is also included. ( tandem operation - the outfall of one project becomes the inlet of the another project)
11(3)(nga)(ga)Additional fifty percent of the tax on income earned from the export of goods produced in Nepal after deduction of the exemption under clause (ka) or (Kha)Additional 50% of the tax on income earned from export of business process outsourcing, software programming, cloud computing and similar IT services until F.Y. 2084/85. Concession is available only to the extent of income received in foreign currency
11(2Kha)(ga) and 11(5)Earlier under 11(2Kha)(ga) - Additional concessions under section 11 is available after availing concession under this section. Also, as per 11(5), only one concession under section 11 can be availed. A combined reading of this section implies that firstly, a taxpayer can take concession under section 11(2kha)(ka) and (kha) and then take one addition concession from the remaining provision under section 11.Same provision is continued. However, the section is merged into section 11(5). Implication remains the same

Published By

CHARTERED NEPAL

Comments

You Must be Logged In To Post Comment

Section	Previous Provision	Amended provision
11(1)	If any income is earned by carrying on agricultural business, business of dehydrating vegetables, and cold storage business by any firm, company, partnership firm, and other corporate body, 100 percent tax on applicable income tax shall be exempted.	If any income is earned by carrying on agricultural business, business of dehydrating vegetables, and cold storage business by any firm, company, partnership firm, and other corporate body, 50 percent tax on applicable income tax shall be exempted.
11(3)(gha)	Tax exemption shall be provided as below to a person engaged in commercial transactions of electricity: 100 % tax exemption for the first 10 years from the date of starting of commercial transaction and 50 % tax exemption for next 5 years shall be provided to the licensed person starting commercial production and distribution of hydroelectricity, electricity from solar, electricity from wind, and bioelectricity within Chaitra 2083. Provided, 100 % tax exemption for the first 15 years and 50 % tax exemption for the next 6 years shall be provided to reservoir-based and semi reservoir-based hydropower projects with a capacity higher than 40 MW completing financial closure within Chaitra end, 2085.	The time limit of 2083 has been changed to 2084. For the proviso, the time limit is still 2085 and in addition to reservoir-based and semi reservoir-based hydropower projects lower level hydropower operated in tandem operation is also included. ( tandem operation - the outfall of one project becomes the inlet of the another project)
11(3)(nga)(ga)	Additional fifty percent of the tax on income earned from the export of goods produced in Nepal after deduction of the exemption under clause (ka) or (Kha)	Additional 50% of the tax on income earned from export of business process outsourcing, software programming, cloud computing and similar IT services until F.Y. 2084/85. Concession is available only to the extent of income received in foreign currency
11(2Kha)(ga) and 11(5)	Earlier under 11(2Kha)(ga) - Additional concessions under section 11 is available after availing concession under this section. Also, as per 11(5), only one concession under section 11 can be availed. A combined reading of this section implies that firstly, a taxpayer can take concession under section 11(2kha)(ka) and (kha) and then take one addition concession from the remaining provision under section 11.	Same provision is continued. However, the section is merged into section 11(5). Implication remains the same