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.

Required:

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.

Required:

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.

Required:

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

Required:

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