Income From Employment xxxxxx

Assessable income from Employment

The general rule is that income from employment is gains and profits Calculation of taxable income
from employment. This means that included in income from employment is
salary, allowances, gratuity, benefits in kind and all other forms of remuneration or Particulars Amount
compensation for the employment.
All income derived by an employee from his employment are taxable unless Assessable income from Employment xxxx
specifically exempted under the Income Tax Act 2058. Assessable income from Business/Profession xxxx
Assessable income from Investment xxxx
“Paid by Employer / Office for the benefit of Employee /
Worker” Total assessable income xxxx
Less: Allowable deductions:
(a) Contribution to PF xxxx
(b) Donation xxxx
(c) Life Insurance Premium and Health Insurance Premium xxxx
Calculation of Assessable income from Employment (d) Remote area exemption xxxx
Of ………….. for Previous year (e) Pension exemption xxxx
Particulars Amount (f) Disable person exemption xxxx
(g) Foreign allowance exemption xxxx
♦ Salary, Wages, Leave pay, Overtime pay, Bonus and other xxxxx
Total taxable income
incentives xxxx
♦ Dashain allowance (Equal to one month salary) xxxx
♦ Contribution to Provident Fund by employer (10% of salary) xxxx
♦ Accommodation or Housing or Quarter facility (2% of salary) xxxx Working Notes:
♦ Vehicle facility (0.5% of salary) xxxx
♦ Prize and Gift related to employment xxxx Contribution to PF:
♦ Dearness allowance, Entertainment allowance, Outstation 1/3rd of Total assessable income = ……..
allowance, Local allowance, Business promotion allowance, OR, Maximum Rs. 3,00,000
Children education allowance, Transportation allowance and other OR, Actual contribution to PF = ..…… (Whichever is less)
allowances paid by employer xxxx
♦ Reimbursement of personal expenses by employer xxxx *Note: Actual contribution to PF means contribution to PF by both employee and
♦ Amount paid for housekeeper, driver, gardener or domestic employer with contribution to CIT if any.
workers by the employer xxxx *Contribution to Unrecognized or Unapproved PF is not allowed for deduction.
♦ Water, Electricity and Telephone bills of employee paid by
employer xxxx Donation:
♦ Interest benefit or Under payment of interest xxxx 5% of Adjusted taxable income = ………
♦ Pension form previous employer xxxx OR, Maximum Rs. 1,00,000
♦ Payment for accepting restriction related to employment, Gain OR, Actual Donation paid = …….. (Whichever is less)
due to change in the accounting system, Fees, Commission, *Note: Adjusted taxable income = Total assessable income - Contribution to PF
Advance salary received xxxx
Life Insurance Premium [Self]:
Actual LIP paid = ……. ►Casual income, Lottery, Windfall income (Final withholding income)
OR, Maximum Rs. 25,000 (Whichever is less) ►Disable person allowance Widow allowance, Senior citizen allowance or Elder
Health Insurance Premium [Self]: allowance (Non taxable income)
Actual HIP paid = ……. ►Personal and domestic expenses are not allowed for deduction.
OR, Maximum Rs. 20,000 (Whichever is less)

Remote Area Exemption: Calculation of tax liability:

Area ‘A’ Rs.50,000 For Individual Status
Area ‘B’ Rs. 40,000 Particulars Amount Income Range
Area ‘C’ Rs. 30,000 1st Upto Rs.3,50,000 @ 1% 1 - 3,50,000
Area ‘D’ Rs. 20,000 Next Rs.1,00,000 @ 10% 3,50,001 - 4,50,000
Area ‘E’ Rs. 10,000 Next Rs.2,00,000 @ 20% 4,50,001 - 6,50,000
Next Rs. 13,50,000 @30% 6,50,001 – 20,00,000
Pension Exemption: Remaining balance @36% Above 20,00,000
25% of Basic exemption = ……… Total tax liability xxxx
OR, Actual pension income Rs…… (Whichever is less) Less:
Woman Rebate @ 10% xxxx
*Note: Basic exemption for Individual person is Rs. 3,50,000 and for Couple is Advance tax paid xxxx
Rs. 4,00,000 Medical tax credit xxxx
Disable Person Exemption: Total tax payable xxxx
50% of Basic exemption
Note: A woman having income from employment only can get 10% rebate on total
tax liability.
Foreign Allowance Exemption [For Nepalese diplomats]:
75% of Foreign allowance amount
*Medical tax credit:
15% of Approved medical expenses Rs…..
Incomes those are not included while calculating income from Employment: Or, Maximum Rs. 750 (whichever is less)
►Meeting allowance (Final withholding income)
►Travelling and Daily allowance (Final withholding income) For Couple Status
►Income from part time job, setting of questions and examinership fee (Final
Particulars Amount Income Range
withholding income)
►Agriculture income (Non taxable income) 1st Upto Rs.4,00,000 @ 1% 1 – 4,00,000
►Dividend from resident company (Final withholding income) Next Rs.1,00,000 @ 10% 4,00,001 – 5,00,000
►House rent received for individual (Final withholding income) Next Rs.2,00,000 @ 20% 5,00,001 - 7,00,000
►Interest received from Bank, Interest on fixed and saving deposit for individual Next Rs.13,00,000 @30% 7,00,001 – 20,00,000
(Final withholding income) Remaining balance @36% Above 20,00,000
►Gain form Investment insurance, Return from Mutual fund, Retirement fund etc. Total tax liability xxxx
(Final withholding income) Less:
►Reimbursement of expenses those are incurred for the purpose of business Woman Rebate @ 10% xxxx
►Any meal, refreshments provided to all employees in equal term Advance tax paid xxxx
►Any amount received from employer less than Rs. 500 Medical tax credit xxxx
►Pension/Income from foreign government
 xxxx
Total tax payable