Income tax relief for middle-class families, salaried people.

Here is high quality news for middle class families and salaried persons. The budget 2013-14 has increased the income tax ceiling for them. A person earning up to Rs 200,000 will now be exempted from the tax. In case of married couples, the tax will be waived for an annual income of up to Rs 250,000.
Earlier, income s up to Rs 160,000 and 200,000 were exempted from income tax for individuals and married couples respectively. However, one percent social security tax is mandatory.
“Considering the rising expenses of the low income group, the tax limit has been increased,” Rajan Khanal, head of the Revenue Division at the Finance Ministry, said.
As promised by Finance Minister Shankar Koirala earlier, there is not much change in the tax structure in the budget. However, the excise duty on cigarettes, alcohol and beer has been hiked.
The budget has increased the duty by 9 percent in cigarettes without filter, 12 percent in cigarettes with filter and 15 percent in premium brand of cigarettes. Similarly, the excise duty in beer has been increased by 11 percent, while the duty in alcohol items has been increased from 10.5 percent to 15 percent, based on the brand and quality.
Giving an impetus to the domestic cement industry, Rs 200 per tonne has been increased in the import duty of cement. The move follows huge investment in the cement industry both by local and foreign investors. Pashupathi Murarka, executive director of Arghakhachi Cement, said more than 70 percent of the domestic demand is being met by the local production. The country will be self-sufficient in cement once five cement industries that are under construction begin commercial production.
The budget has also adopted measures to curb illegal supply of sand and boulders to neighbouring India. The supply tax in this items has been doubled.
A high-level official at the Finance Ministry said that though the budget’s major aim was to allocate funds for the upcoming Constituent Assembly (CA) elections, there was no alternative to increasing taxes in some items so as to meet the development expenditures.
On the other hand, the budget has reduced customs duty by 0.5 percent on 27 items so as to fulfill the World Trade Organization (WTO) commitment. Duty has also been decreased by one percent on bicycles, largely used by the low-income group.
The budget has also adopted measures to bring brick manufactures in the value added tax (VAT) net. Brick makers have so far been rejecting repeated calls from the government to pay VAT.
Brick industries will be exempted from additional charge, interest and fines if they register themselves for VAT within mid-September to mid-October, according to the new budget.
The budget has also envisioned collaboration with regard to the exchange of information between governmental agencies including the Industry Ministry, Department of Commerce and Supplies Management, Department of Cooperatives, Office of Company Registrar and local agencies so as to expand the tax net. The budget has also brought professionals under the tax scrutiny. It says that professionals like doctors, artists, engineers, layers, accountants, traders, consultants and commission agents, among others, have to compulsorily take the permanent account number (PAN).
Apart from its focus on the collection of revenue, the new budget has also paid attention to the reformation of revenue administration. “A high-level tax system reformation recommendation commission will be established for the timely reformation of tax administration,” the budget paper said.
src : kathmandu post