Income Tax Updates:
The global pandemic, COVID 19 is spreading rapidly all around the world. Nepal is also at high risk and with new confirmed cases of infection; the Government of Nepal has already extended the lockdown. Government has introduced the following relief:
1. Advance tax filing of 6 months and tax returns to be submitted under Income Tax Act 2002 can be done until 25th Baisakh 2077.
2. The time for tax returns to be submitted and the second installment to be paid in Chaitra under Income Tax Act 2058 has been extended till the month of Baisakh.
Penalty for delayed payment would have amounted up to thirty thousand and/or up to three months imprisonment under Income Tax Act. Time extension for filing documents and taxes definitely alleviates unexpected economical burdens due to the situation.
3. Amount contributed in the Coronavirus Treatment Fund shall be deducted in calculation of taxable income.
In this time of pandemic, stress and anxiety, contribution towards a better cause always provides satisfaction. Government has encouraged such humanitarian efforts by making such amounts tax exempt; another benefit for taxpayers.
However, government is yet to clarify whether contributions to such fund shall amount to fulfilling corporate social responsibility under the Industrial Enterprises Act, 2020 whereby each medium and large scale industries, and cottage and small scale industries with annual turnover of NPR 150,000,000.00 shall be required to spend at least 1% of their annual net profit to corporate social responsibility; though under general interpretation, it should qualify for corporate social responsibility.