KATHMANDU, Dec 8: The Supreme Court (SC) on Wednesday scrapped the previous government’s decision to increase income tax from five to 15 percent on the retirement payment amounts.
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Issuing a verdict, the joint bench of SC Justices Ishwar Prasad Khatiwada and Nahakul Subedi asked the government not to implement the decision made by the previous government. The then Finance Minister Yubaraj Khatiwada through the annual budget for 2018/19 announced to slap income tax of 15 percent on the pension amount. Four writ petitions were filed against the government’s decision.
Currently, retirement payments exceeding 50 percent of the total sum or Rs 500,000 whichever is higher, received from an approved retirement fund at the time of separation is taxed at five percent.
