Submitted by: Sabin Subedi

Roll no: 167109

Nepal Cement Pvt. Ltd.

Income Tax Liability of Business

As per Income Tax 2058 (Provisions from Fiscal Year 2075/76)

Particulars Amount Working Note

A. Income
1. Sales of Cement 106,450,000.00
2. Sales of Scarp items 5,540,000.00
Total Income 111990000
B. Expenses
1. Cost of Goods sold 63,619,990.00 (i)
2. Depreciation Expense 5886219 (ii)
3. Repair and 1620150 (iii)
Maintenance Cost
4. General Deductions 27218040 (iv)
5. Bad Debts 4501000. Assuming all amount was
allowed as per taxation.
Income from Business(A-B) 9144100
Less: Loss Carried Over 7000000 (Assuming all loss were on the
domestic market in the previous
year) Therefore it is allowed to
set off on both domestic and
foreign income
Net Taxable Income 2144100
i. Taxable Income of 1179255
export (55%)
Rate 15% Income from exports by
manufacturing industry rate is
75% of Normal Rate
Tax Liability from 176888
exports (E)
ii. Taxable Income of 964845
domestic
income(45%)
Rate 16% For, Special Industries providing
employment for 100 to 300
Nepali Citizens applicable rate is
90% of normal rate and
inclusive 33% of womens, dalit
etc. get additional 10%
concession.
 Tax liability of 154375
domestic income
(D)
Total Tax Liability (E+D) 331263

Cost of Trading Stock (I)

Particular Amount
Opening Balance 19,550,450.00
Add: Purchase of Raw Materials 26,789,000.00
Add: Purchase of Packaging Materials 14,560,900.00
Add: Transportation Cost 2,33,10,000.00
Add: Electricity (Factory Overhead) 4,590,240.00
Less: Closing stock of Raw Materials 7,590,600.00
Less: Closing Stock of Goods 17,590,000.00
Cost of Goods Sold 63,619,990.00

Depreciation (ii)
Block Opening Absorbed Unabsorbed Disposal Depreciable Rate Depreciation
Balance Addition Addition Basis
A 15,590,000.00 Nil Nil Nil 15590000 6.67% 1039853
B 90,07,000.00 Nil Nil Nil 9007000 33.33% 3002033

C 5,005,000.00 Nil Nil Nil 5005000 26.66% 1334333

D 2,550,000.00 Nil Nil Nil 2550000 20% 510000

Total 5886219

Repair and Maintenance (iii)

Block Rate Depreciable Repair and Maintenance Actual Cost

(%) Basis cost
A 7 15590000 1091300 1590000
B 7 9007000 630490 0
C 7 5005000 350350 1309000
D 7 2550000 178500 1246000
Total Allowable Repair 1620150

General Deductions (iv)

Particulars Amount Working Note

Wages 15500000 Wages less wage for repair
Salary 3560920
Gratuity expense 1546520
Telephone 710600 Total less chairman’s
telephone cost
Sale Promotion 2500000 Total less liquor cost
Sale Commission to dealers 3400000 Total less paid in cash (>
than 50000)
Total 27218040