Banking Sector in Budget 2021: 18 Major Points to Consider

KATHMANDU: KATHMANDU: The government has unveiled  budget for the fiscal year 2021-22 on Saturday through ordinance with due priority to Covid-19, vaccination and upliftment of the pandemic-hit economy.

Below are the 18 points of the budget to be considered for the banking and financial sector.

1. Start up loan up to Rs 2.5 million to be provided at Subsidized rate of 1% and Rs 2.5 million loan on security of educational certificate of bachelors and above at 5%.

2. Laptop loan for university level education: 80,000 @1% for 2 years.

3. No TDS on interest payment of cooperatives and national cooperative banks on inter-institutional borrowings.

4. 1% additional interest shall be provided to remittance linked term deposit accounts.

5. For SESME loan promotion : presumptive tax limit increase to Rs 3 million from Rs 2 million and turnover tax limit increase to Rs 10 million from Rs 5 million.

6. Expansion of coverage and limit of interest subsidized loans.

7. Income tax waived in mutual fund income.

8. 10% VAT refund in all electronic payment including cards, internet banking , QR Scanner shall made effective with immediate effect.

9. Refinance size and coverage shall be increased.

10. Deduction of Home Insurance Premium up to 5,000 ( Beneficial for Staffs as well as Home Loan Customers ).

11. 90%, 75% and 50% Income Tax Rebate to the tax payer having turnover up to Rs 2 Million / Rs 5 million and Rs 10 million respectively for FY 2078/79 (SESMEs might be benefited from this rebate).

12. Only 1% tax on taxable income of COVID impacted sectors ( tourism, transportation etc) and loss carry forward is available for 10 years instead of 7 years.

13. Contribution to COVID fund of all three governments and CSRs for COVID related equipment supply etc are deductible for FY 2078/79.

14. Tax clearance certificate shall be provided via automated system

15. EXIM Code renewal is allowed up to 5 years at a time.

16. Tax benefits of 47Ka is available for Merger / Acquisition among same class institutions (Acquisition of B and C class by A class won’t be attractive).

17. 5% tax shall be withheld by the BFIs for outward remittance of University Fees etc ( Existing Provision for Language Test Examination Fee remittances is subject to 15% Tax withholding).

18. DCGF finally specified as VAT exempt services and hence 1.5% TDS deduction is applicable while paying premium by BFIs

-From FB Post of Sandip Babu Poudel

Fiscal Nepal |
Sunday May 30, 2021, 01:40:29 AM |

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