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. 

Required: 

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.

Given;

• 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

Required: 

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

Required: 

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, 

Required: 

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