Personal Income Tax (PIT) PIT is a tax levied on the personal income of an individual on an accrual basis from any or more of the following six sources: (a) Employment Income

  • monthly basic salary allowances
  • fees & remuneration
  • bonus
  • commission
  • leave encashment
  • share of profits received by an employee
  • consultancy income by an non licensed consultant and
  • other benefits received free or at a concessional rate.

(b) Rental Income Income earned from real properties such as:

  • land(s)
  • building(s)
  • house(s)
  • factory building(s)
  • warehouse(s) and
  • any other structures generating income.

(c) Dividend Income

  1. Income received from holding of shares in a company registered in Bhutan. However, dividend income does not include dividends received in the form of bonus shares. Dividend income exceeding Nu.10,000 shall be subjected to TDS @ 10% on the whole amount. Dividend income shall be taxed on receipt basis.

(d) Interest Income

  1. Interest earned from fixed deposits maintained with financial institutions in Bhutan. Interest income exceeding Nu.10,000 shall be subjected to TDS @ 5% on the whole amount. Interest income shall be taxed on receipt basis.

(e) Income from sale of Cash Crop

  1. Income from cash crop means income earned in a year from sale of apple, orange and cardamom. The income shall be taxed on accrual basis.

(f) Income from Other Sources

  1. Income from other sources shall be taxed on accrual basis and it is income derived from any of the following sources:
  1. Income from hire of privately owned vehicles, plants and machinery but exluding trucks and taxis;
  2. Income from intellectual property rights such as copy rights, patent, trademark, design, model or any artistic work or scientific work.

Specific deductions/exemptions Income Sources Specific Deductions/Exemptions

  1. Salary Income            : Less PF and GIS contributions.
  2. Rental Income            : Less 20% on repairs and maintenance,interest payments, urban taxes and insurance premium.
  3. Dividend Income      : Less Nu. 10,000 specific exemption and interest on loans for shareholding.
  4. Interest Income           : Less Nu. 10,000 specific exemptions.
  5. Cash Crop Income       : Less 30% on Gross Cash Crop Income.
  6. Other Income              : Less 30% on Gross Other Income.

General Deductions In addition, the following general deductions are given

  1. Education allowance up to a max of Nu. 50,000 per child.
  2. Life insurance premium.
  3. Self education allowance up to a max Nu. 50,000 p.a.
  4. Donations up to a max of 5% of the total adjusted gross income.

 

PIT Tax Rates: 
Sl No. :Income SlabTax Rate
1Up to Nu. 200,0000%
2Nu.200,001 to Nu. 250,00010%
3Nu. 250,001 to Nu. 500,00015%
4Nu. 500,001 to Nu. 1,000,00020%
5Above 1,000,00025%