New Financial Year Begins with Implementation of New Taxes, Including Income Tax, from Today

The financial year 2080/81 has commenced today, marking the beginning of a new fiscal period. With the advent of the new financial year, various tax-related arrangements announced by the government have come into effect.

As per the revised provisions outlined in the Income Tax Act 2058, individuals earning an annual income exceeding 50 lakh rupees will now be subject to a 39 percent income tax, effective from Shrawan 1st. Previously, individuals earning over 20 lakh rupees annually were liable to pay a 36 percent income tax.

Furthermore, the government has introduced a luxury tax for the first time, which is now being implemented. A 2 percent luxury tax has been imposed on services offered by hotels, restaurants, and resorts rated as five stars or above. Additionally, a 2 percent luxury duty has been imposed on precious metals valued at more than 1 million rupees.

In the budget statement, the government has specified that imported alcohol and certain high-value items such as diamonds, pearls, and gold jewelry embedded with stones or precious metals, exceeding a value of 10 lakh rupees, will be subject to the same tax rate. Such taxes will only be applicable when services are provided by hotels and resorts. Customs duties on imported liquor will be collected at the point of entry, while sellers of metal jewelry exceeding a value of 10 lakhs will be responsible for collection.

Moreover, starting today, a five percent tourism fee will be levied on foreign tour packages sold by travel agencies.

Upon the release of the budget on Jestha 15th, provisions concerning customs duties, excise duties, value-added tax, road construction duties, and mobile phone registration have been implemented.