Corporate Taxation in Nepal Old Question Paper Year 2018 – Tribhuvan University | BBA

Corporate Taxation in Nepal Old Question Paper Year 2018 | Tribhuvan University | BBA

Group “A”

Brief answer questions:       [5×2=10]

1) Define indirect Tax.

2) What do you understand by “Non-business Chargeable Assets”?

3) Briefly describe the provision related to quantification of vehicle facility provided to an employee.

4) Mr. Samir, a citizen of Pakistan came to Nepal on 10thMarga ,2072 and return back on last Chaitra, 2072.

Required: His residential status. 

5) Mr. Thapa reported total taxable income, from business activities of Rs. 800,000 (including Rs. 150,000 net gain from disposal of shares)

Required: Tax liability 


Group “B”

Short Answer Questions:     [4×5=20] 

6) A customer bought a television from a retail store paying Rs 22,600. The TV was imported by Mr. Suman and it was sold to the retailer. The importer and retailer both incurred Rs. 1,000 each as an additional cost and profit margin of 10% on selling price as included in all cases. 


  1. Import price of TV
  2. Amount of VAT payable to the government at each stage.

7) Following are the information of Mr. Arun a permanent employee of government of Nepal for the previous income year.


  • Salary Rs. 35,000 p.m.
  • Dearness allowance Rs. 3,500 p.m.
  • Clothing allowance Rs. 2,000 p.m.
  • Incentive allowance Rs. 25,000.
  • He received Rs. 18,000 as children’s education fees from the employer.
  • Medical facilities Rs. 3,000 received from the employer.
  • Accommodation facilities provided by employer along with cook’s salary Rs. 8,000 p.m. 
  • Car facilities also provided by employer with fuel and maintenance of6,000 p.m. 
  • Meeting allowance Rs 8,500 (net).

Required: Assessable income from employment 

8) Following are the financial results of Mahalaxmi Petrol Pump Ltd. of last 6years.

Year 1 2 3 4 5 6
Profit/ loss (Rs) (200000) (400000) 175000 400000 200000 300000

On scrutiny, it was found that a donation of Rs. 300,000 was given to Public Hospital charged in year 1st. Similarly, the profit of 4th year was calculated after deducting pollution control cost of Rs, 400.000 and at 5th year before deducting interest on bank loan Rs. 50,000. 

Required: Taxable income with explanation wherever necessary. 


9) Mrs. Sunita Thapalia is an advocate, maintains her account on a cash basis furnished the following statement for the year end 31st Ashadh.

Receipts and Payments Account

Receipts Amount (Rs) Payments Amount (Rs)
To balance b/d 25000 By office expenses 40000
To legal fee 256000 By office rent 60000
To consultation fee 52400  By telephone expenses 6000
To lottery fee (net) 7000 By interest on bank loan 25000
To dividend (net) 5700 By membership subscription 2000
To interest from bank (net) 21500 By electricity charge 8000
To sundry income 37400 By newspaper expenses 6500
To gifts from client 20000 By donation 40000
By car expenses 10000
By premium of life expenses 30000
By balance c/d 197500
425000 425000

Additional information

  • 50% of bank loan is related to personal use.
  • Allowable depreciation on car is Rs. 30,000.
  • Office expenses included Rs. 10,000 paid for household servant.
  • Outstanding office rent Rs. 24,000 is yet to be paid.
  • Electricity and telephone expenses is used equally for profession and domestic purpose


  1. Assessable income from profession
  2. Statement of taxable income


Group “C”

Comprehensive Answer Questions:      [2×15=30] 

10) Mrs. Sarika joined a job at Nepal Investment Bank limited as a financial assistant on 1st Baisakh 2066 B.S. at a pay scale of Rs 25,000-1000-30,000-1,500 38,000 and other details of income are as follows: 

  • Dearness allowance Rs 2,000 p.m.
  • She received next year’s salary as advance Rs. 50,000
  • Accommodation facility provided by the office along with a Cooks salary Rs. 7,000 p.m. 
  • She received Rs. 2,500 per month as education facility to her children from employer.
  • Water and electricity bill of Rs. 1,000 and Rs. 600 respectively paid per month by employer for which office deducts Rs. 800 per month from her salary. 
  • Life insurance premium Rs. 25,000 paid by the employer.
  • Meeting Allowance Rs 17,000 (net)
  • Bank provides provident fund and Dashain allowance as per government rules. 
  • She received meal and tiffin facility equal to Rs. 2,500 p.m. in the office premises as provided to all the employees.
  • She received travelling and daily allowance Rs. 55,000.
  • Home leave encashment received Rs. 36,000.
  • Vehicle facility has been provided to her by the employer.
  • She was also provided a housing loan of Rs. 2000,000 at a concession rate of 8% p.a. by the bank but prevailing market interest rate is 12o.
  • She received Rs. 51,000 (net) as part time lecturer.
  • Emergency medical treatment expenses reimbursed by office Rs. 48
  • She has claimed the following expenses for deduction:
  • Donation given to Lumbini Area Development Trust Rs. 20,000
  • Domestic expenses Rs. 45,000
  • Legal expenses for arranging the loan Rs. 6,000
  • Health insurance premium Rs. 23,000 (self
  • Medical expenses incurred Rs. 15,000 of her own.
  • She is working at remote area ‘C
  • Advance payment of tax Rs. 4,000


  1. Assessable income from employment 
  2. Statement of total taxable income
  3. Tax liability

11) Bhattarai, a trader furnished following Trading and Profit and Loss account for previous year: 

Trading and Profit & Loss Account

Dr.                                                                                                                               Cr.

Particular Rs Particular Rs
To opening stock 95000 By sales 1950000
To purchase 500000 By closing stock 55000
To carriage 150000
To wages 250000
To gross profit c/d 1010000
2005000 2005000
To salaries 180000 By gross profit b/d 1010000
To legal expenses 19000 By commission 30000
To bad debt expenses 20000 By interest on investment 50000
To general reserve 100000 By refund of income tax 20000
To pollution control cost 50000 By sundry income 25000
To depreciation 150000 By dividend (Net) 37500
To repair 100000 By bad debt recover 15000
To donation paid to public school 80000 By amount receive for accepting restriction regarding business 25000
To office expenses 165000
To audit fee 15000
To hospitality expenses 20000
To advance income tax paid 7500
To fine and penalty 25000
To bonus to staff 35000
To advertising 9000
To net profit 237000
1212500 1212500

Additional information: 

  • Opening stock undervalued by 5% and closing stock overvalued by 10%.
  • Refund of income tax includes Rs. 15,000 as refund of custom duty.
  • Legal expenses included Rs. 5,000 for income tax appeal against income tax officer.
  • Depreciation on car has not been charged in the above statement. The depreciation base of the car was Rs. 500,000. However, the repairs expenses included the repairs of the car Rs. 60,000. 
  • Office expenses include Rs. 55,000 cost of patent right with life period of 5 years 6 months. Charge depreciation as per rule, 


  1. Assessable income from business and investment
  2. Statement of total taxable income
  3. Tax liability

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