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
- 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:
- factory building(s)
- warehouse(s) and
- any other structures generating income.
(c) Dividend Income
- 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
- 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
- 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
- Income from other sources shall be taxed on accrual basis and it is income derived from any of the following sources:
- Income from hire of privately owned vehicles, plants and machinery but exluding trucks and taxis;
- 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
- Salary Income : Less PF and GIS contributions.
- Rental Income : Less 20% on repairs and maintenance,interest payments, urban taxes and insurance premium.
- Dividend Income : Less Nu. 10,000 specific exemption and interest on loans for shareholding.
- Interest Income : Less Nu. 10,000 specific exemptions.
- Cash Crop Income : Less 30% on Gross Cash Crop Income.
- Other Income : Less 30% on Gross Other Income.
General Deductions In addition, the following general deductions are given
- Education allowance up to a max of Nu. 50,000 per child.
- Life insurance premium.
- Self education allowance up to a max Nu. 50,000 p.a.
- Donations up to a max of 5% of the total adjusted gross income.
|Sl No. :||Income Slab||Tax Rate|
|1||Up to Nu. 200,000||0%|
|2||Nu.200,001 to Nu. 250,000||10%|
|3||Nu. 250,001 to Nu. 500,000||15%|
|4||Nu. 500,001 to Nu. 1,000,000||20%|