Changes in Income Tax and VAT by Finance Act, 2079

On Sunday, 15 Jestha,2079, Honorable Finance Minister Mr. Janardhan Sharma presented the full budget for the fiscal year 2079/2080. A significant, tax amendment by the budget is highlighted here.

Income Tax Rate for resident natural person-Individual 

Section1(1) of Schedule 1

Old Provision New Provision
First 4 Lakh @ 1%/nil
Next 1 lakh @ 10% 
Next 2 lakh @ 20%
Next 13 Lakh @ 30%
Balance @ 36% (30%+30*20%)
 First 5 Lakh @ 1%/nil
Next 2 lakh @ 10%
 Next 3 lakh @ 20%
Next 10 Lakh @ 30%
Balance @ 36% (30%+30*20%


Gain on disposal of NBCA (Land and building) by Natural person person

Section 1(4) of Schedule 1

Old Provision New Provision
  1. Where the ownership of the disposed NBCA (land and building) is for 5 years or more, at the rate of 2.5 percent. 
  2. Where the ownership of the disposed NBCA (land and building) is for less than 5 years, at the rate of 5 percent. 
Unexhausted basic exemption limit can be used by gain on disposal of NBCA
  1. Where the ownership of the disposed NBCA (land and building) is for 5 years or more, at the rate of 5 percent.
  2. Where the ownership of the disposed NBCA (land and building) is for less than 5 years, at the rate of 7.5 percent.
Unexhausted basic exemption limit can be used by gain on disposal of NBCA


Deduction for life insurance Premium

Section 1(12) of Schedule 1

Old Provision New Provision
Notwithstanding anything contained elsewhere in Section (1), where any resident individual has made investment insurance, tax shall be computed only in the amount that remains after deduction of the annual premium or Rs. 25,000; whichever is lesser, from the taxable income
 Notwithstanding anything contained elsewhere in Section (1), where any resident individual has made investment insurance, tax shall be computed only in the amount that remains after deduction of the annual premium or Rs. 40,000; whichever is lesser, from the taxable income


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