Apex Court Orders Government to Lower the Tax on Retirement Fund to 5%

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Apex Court Orders Government to Lower the Tax on Retirement Fund to 5%

January 27: The Supreme Court has ordered the government to lower the tax imposed on the retirement fund and incentives of government employees.

As per the apex court order, the government can impose only five percent tax on the money and incentives that the government employees are entitled to get after retirement.

A division bench of justices Ishwar Prasad Khatiwada and Nahakul Subedi had issued the verdict two months ago and the full text of the verdict was released on Wednesday.

Earlier, the government in accordance to the Income Tax Act, 2058 had been imposing 15 percent tax on the money and incentives government employees were entitled to receive upon their retirement.

According to the state-owned national news agency RSS, the employees of the Rastriya Banijya Bank had filed a case against the provision of 15 percent tax imposed by the government.    

 With the apex court verdict, Section 65 of the Income Tax Act, 2058 has been cancelled and Section 88 (Provision 1) of the same Act has come into effect for the implementation of 5 percent tax, RSS further reported.    

  

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