Corporate Taxation in Nepal Old Question Paper Year 2019 – Tribhuvan University | BBA

Corporate Taxation in Nepal Old Question Paper Year 2019 | Tribhuvan University | BBA

Group “A”

Brief answer questions:       [5×2=10]

1) What do you mean by canon economy?

2) State any tour examples of tax-exempt incomes.

3) Define the term income year and assessment year under income tax Act

4) Ashok, a permanent officer of Nepal government, was appointed as a first secretary at Embassy of Nepal in Srilanka. He left Nepal on 1st Marga of previous income year.

Required: Residential status of Mr. Ashok.

5) Rohit, an industrialist involved in export “business based in Sindhupalchok (Remote Area ‘E), has taxable income of Rs. 3,600,000. He paid own life insurance premium Rs. 25,000. Calculate his tax liability

Group “B”

Short Answer Questions:      [4×5=20]

6) A customer purchased a Laptop from a retailer at a price of Rs 45,200. The product was passed through two middleman importer and retailer. A profit margin of 10% on cost price was included by the both the  However, an overhead cost of Rs. 2,000 and Rs 1,000 were incurred by importer and retailer respectively.


a. Cost price of the importer

b. Amount of VAT payable by two sellers in each stage of sales

7) Chandra is a government employee working at the office located at remote area ‘B and furnished the following details of his income for previous year.

  • Net salary after deducting provident fund Rs. 30,000 and tax deducted at sources Rs. 10,000 before including Dashain kharcha is Rs. 260,000.
  • Remote area allowance is provided by the office Rs. 5,000 per month.
  • Transportation allowance and Daily allowance Rs. 15,000 is provided by the office
  • Office provided him rent free accommodation facility.
  • A car is provided him as a facility along with driver and fuel.
  • His medical bill of Rs. 20,000 reimbursed by the office.
  • Bonus provided by the office equal to two month salary.
  • Advance salary received Rs. 40,000.
  • He received Rs. 95,000 (net) as a dividend from resident company.
  • He received Rs. 42,500 (net) from writing articles in a journal.
  • He received directors fees Rs. 4,500 and meeting allowance Rs. 4,250(net)
  • Clothing allowance Rs. 1,000 per month.
  • Salary from part-time teaching Rs. 170,000 (net).
  • Royalty received from writing books Rs. 50,000.

Required: Net Assessable income from employment of Mr. Chandra

8) Following are the operating results of a manufacturing company of last 6 years.

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. 100,000 was given to Tilganga Eye Hospital, charged in year one. Similarly, the profit of 4th year was calculated after deducting pollution control cost Rs. 200,000 and before deducting interest on bank loan Rs. 50,000 at 5th year.

Likewise, depreciation of Rs. 5,000 Rs. 4,000 and Rs. 6,000 have 6,000 have not been charged in above P/L in year 2,3 and 4th year respectively.

Required: Taxable income giving necessary explanation

Following is the summarized statement of cash of an auditor

Dr.                                                                                                                               Cr.

Receipt Amount Payment Amount
To balance b/d 40000 By office expenses 150000
To consultation fee 280000 By office rent 72000
Audit fee 350000 By sales to assistant 84000
To interest from bank deposit (net) 28500 By life insurance premium (self) 16000
To income from writing article 27000 By hospital expenses 42000
To interest on private money lending 40000 By balance c/d 421000
To sales of old newspaper 2000
To dividend from resident Co. 17500
785000 785000

Additional information:

  • Consultation fees include Rs. 25,000 relating to next year.
  • Audit fees include Rs. 40,000 related to previous years.
  • Office assistant contributed 1/4 of his time to the household activities.
  • Donation to exempt organization Rs. 15,000 not included in above
  • Depreciation of office equipment Rs. 8,000 and medical expenses Rs
  • 9,000 are not included in the above statement.


i. Net Assessable income from profession

ii. Taxable income

Group “C”

Comprehensive Answer Questions:    [2×15=30]

10) Mrs. Gurung joined a job at Nepal Bank Limited as a financial assistant 1st Jestha 2065 at a pay scale of Rs. 26,000-1,000 36,000 45,000. Her other detail of income are as follows.

  • Dearness allowance 30% of salary.
  • Accommodation facility provided by the office with free of cost
  • She received Rs. 2,000 per month as education facility to her children.
  • Water and electricity bill of Rs. 2,000 and 1,500 paid per month by office on behalf of her but she used equally for private and official purpose.
  • Life insurance premium Rs. 15,000 paid by the employer.
  • She is the member of recognized provident fund. She and her employer also contribute 10% of salary on it.
  • She received interest from private money lending transactions of Rs.85,000 (after TDS)
  • She was also provided a loan of Rs. 2,000,000 at a concession rate of5% p.a. by the bank but prevailing market interest rate is 12%.
  • She received Rs. 20,000 (net) from casual gain.
  • She has claimed the following expenses for deduction:
  • Donation paid Rs. 25,000 to an exempt organization.
  • Transportation expenses Rs. 3,500.
  • Legal expenses for arranging the loan Rs. 5,000.


a. Net assessable income from employment.

b. Statement of total taxable income.

c. Tax liability.

11) Madan a sole trader submitted the following trading and profit and loss account.

Dr.                                                                                                                   Cr.

Particulars Amount (Rs) Particular Amount (Rs)
To opening stock 110000 By sales 4980000
To material purchase 2000000 By closing stock 220000
To custom duty 100000
To gross profit 2990000
5200000 5200000
To salaries 450000 By gross profit 2990000
To provision of bad debt 50000 By dividend from com 50000
To provision of tax 80000 By interest on investment 100000
To hospitality expenses 20000 By compensation 40000
To fire insurance premium 20000 By discount 10000
To research and development cost 300000 By bad debt recovered 80000
To donation 40000 By gifts and present 20000
To fine and penalty 20000 By interest from loan 40000
To audit fee 50000 By rent from staff quarter 90000
To legal expenses 20000 By sundry income 120000
To postage and telegram 5000 By gain on sales of non business chargeable assets 100000
To general expenses 70000
To distribution cost 50000
To staff welfare expenses 24000
To discount 39000
To gratuity 40000
To interest 40000
To commission 5000
To bonus to staff 105000
To Nepal profit 2212000
3640000 3640000

Additional Information

  • Opening and closing stock both are overvalued by 10%
  • Opening WDV of the plant was Rs. 500,000. The purchase cost of plant was Rs. 300,000 acquired in Falgun and part of plant having book value Rs. 30,000 sold at Rs. 40,000 Charged depreciation as per income tax act.
  • 60% of bad debts recovered was not allowed previously.
  • Legal charge includes Rs. 10,000 appeal against income tax officer.
  • Fire insurance premium include Rs. 10,000 for the life insurance of his
  • Previous year business loss Rs. 150,000 not included in the above


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

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