Rules (Amendment) On The Income Tax Act of The Kingdom of Bhutan 2001 - Fifth Edition

RULES ON THE INCOME TAX ACT OF THE
KINGDOM OF BHUTAN 2001
Fifth Edition 2020

KINGDOM OF BHUTAN 2001
Fifth Edition 2020

ROYAL GOVERNMENT OF BHUTAN
MINISTRY OF FINANCE
TASHICHHODZONG
Foreword
The Ministry of Finance is pleased to bring out 5th edition of the

Rules on the Income Tax Act of the Kingdom of Bhutan, 2001.
This revision was necessary to reflect recent changes mandated
by the National Assembly to the Income Tax Act, 2001 as well
as to keep pace with changing business and economic conditions
that have taken place after implementation of the Income Tax
Act in 2001.
The revised Rules supersede all previous circulars, notifications

and rules governing Corporate Income Tax, Business Income Tax
and Personal Income Tax. The Rules must be read together with
the Act, as it follows the same section sequence of the Act for easy
crossreference by the users. Attempts have been made, wherever
possible, to keep these Rules simple, easy to understand, and
practicable for administrative ease and taxpayers’ convenience.
The revised Rules also define the legal responsibilities of the

taxpayers as well as the tax authorities. It is the legal responsibility
of every taxpayer to make correct and timely payment of taxes,
while the legal responsibility of the tax authorities is to assess
and collect taxes in a fair, effective, and transparent manner.
Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | i

The Ministry of Finance hopes that these updated Rules will
facilitate better understanding of all procedural and technical
aspects concerning Corporate Income Tax, Business Income
Tax and Personal Income Tax, to both the taxpayers and the tax
administrators, and ensure smooth implementation of the Income
Tax Act of the Kingdom of Bhutan, 2001 in the Kingdom.
(Namgay Tshering)
Finance Minister
ii | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

TABLE OF CONTENTS
Contents Page
Preliminary............................................................................ 1
Title....................................................................................... 1
Commencement.................................................................... 1
Supersession.......................................................................... 1
Part I Corporate Income Tax (CIT).................................. 2

Rates & Calculation of Income Tax...................................... 3
Registration of Taxpayers and Filing of Tax Return............. 4
Filing of Income Tax Return................................................. 5
Correction of Tax Return...................................................... 6
Postponement of Filing......................................................... 6
Tax Holidays and Incentives................................................. 7
Allowable Deductions........................................................... 7
Deductions and Carry Forward of loss by the debtor when the
debt is forgiven..................................................................... 30
Depreciation.......................................................................... 31
Part II Business Income Tax.............................................. 36

Business Under the Same Ownership................................... 36
Rates & Calculation of Income Tax...................................... 37
Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | iii
Tax Registration and Change of Registration....................... 39
Allowable Deductions........................................................... 43
Part III Personal Income Tax (PIT).................................. 46

Tax Liability.......................................................................... 46
Registration of Taxpayers and Change of Registration........ 50
Persons other than Citizens or Residents.............................. 53
Payment of Tax..................................................................... 54
Sources of Income Liable to Tax.......................................... 54
General Deductions............................................................... 64
Net Taxable Income.............................................................. 67
Tax Rates............................................................................... 68
Surcharge.............................................................................. 69
Set Off and Carry Forward.................................................... 69
Part IV Tax on Lottery Winning....................................... 72

Tax liability........................................................................... 72
iv | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

Income liable to tax............................................................... 72
Tax rate.................................................................................. 72
Responsibility to collect and deposit tax.............................. 73
General Provisions.............................................................. 74
Assessment............................................................................ 74
Notice of Assessment............................................................ 77
Demand Notice..................................................................... 78
Transfer and Closure of Business......................................... 78
Exemption from Tax............................................................. 80
Double taxation relief........................................................... 81
Collection and Payment of Taxes.......................................... 83
Information, Control and Documentation............................. 93
Fines and Penalties................................................................ 95
Recovery Measures............................................................... 97
Tax Clearance Certificate...................................................... 100
Issue of Tax Clearance Certificate........................................ 100
Forms
Form CIT-1 CIT Registration............................................... 101
Form CIT–2 Annual Income Tax Returns............................. 104
Form BIT-1 BIT Registration............................................... 106
Form BIT-2 Annual Business Income Tax Return................ 109
Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | v

Form BIT 2 BIT Standard Accounts Format........................ 111
Form PIT-1 PIT Registration................................................ 128
Form PIT-2 Personal Income Tax Return............................. 132
Form IT-1 Monthly Salary Schedule.................................... 151
Form IT-2 Income From Real Property................................ 153
Form IT-3 Income From Dividend....................................... 155
Form IT-4 Income From Interest.......................................... 157
Form IT-5 TDS From Tour Income...................................... 159
Form IT-6 Schedule Of TDS Remittance From Contractors 161
Form IT-7 Income From Other Sources............................... 163
Form IT-8 TDS from Lottery Winnings............................... 165
Form IT-9 Restraining Order................................................ 167
Form IT-10 Sponsored Student............................................. 170
Form IT-11 Demand Notice.................................................. 172
TRC-1 Tax Residency Certificate......................................... 173
Annexures
Annexure I Categorization.....................................................174
Annexure II Depreciation Schedule.......................................175
Annexure–III TDS Schedule For Monthly Salary Income... 177
Annexure- 1A Insurance Premium........................................ 187
Annexure- 1B Insurance Premium........................................ 187
vi | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

KINGDOM OF BHUTAN, 2001
In exercise of powers conferred by the Income Tax Act of the

Kingdom of Bhutan, 2001 (ACT), the Ministry of Finance
(Ministry) hereby frames the following Rules on Corporate
Income Tax (CIT), Business Income Tax (BIT) and Personal
Income Tax (PIT).
The Rules have been framed only where the Ministry of Finance
is empowered by the Act. All references to Parts and Sections
in these Rules pertain to the Act and must be read together with
the Act.
PRELIMINARY
Title
1. This Rule is the Rules on the Income Tax Act of the Kingdom
of Bhutan 2001.
Commencement
2. This Rule comes into force from Income Year 2020.
Supersession
3. This Rule supersede all previous Circulars, Notifications
and Rules governing Corporate, Business and Personal
Income Tax.
Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | 1

PART I
CORPORATE INCOME TAX (CIT)
Rates & Calculation of Income Tax
4. The rate and calculation of tax shall be as per the Rules

prescribed below:
(1) Full Tax Liability

Companies registered under the Companies Act of
the Kingdom of Bhutan shall pay Corporate Income
Tax (CIT) at the rate of 30% on the net profit for State
Enterprise, and 25% of the net profit for companies
other than state enterprise. Net profit for the purpose of
calculating the tax shall be the Gross Income minus the
allowable deductions under these Rules.
(2) Limited Tax Liability

The rate of income tax for companies under limited tax
liability shall be as follows:
(a) permanent establishment at the rate of 25 percent
of the net profit;
(b) contractors and consultants at the rate of 3 percent
of the contract value;
(c) income from interest and royalty at the rate of 5
percent of the gross amount; and
(d) income from dividend at the rate of 10 percent of
the gross amount.
The tax rates under Rule No. 2(b)(c)(d) are final taxes
and tax returns shall not be filed.
2 | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

(3) Time Limit for Payments
All companies shall pay their tax on a selfassessment
basis to the Regional Revenue & Customs Office
(RRCO) within 31st of March following the end of the
income year (1st January to 31st December). Provisional
taxes paid by way of tax deducted at source (TDS) and
advance tax shall be paid as per Rule No. 60(2)(a),
60(2)(b) and 60(2)(c) of the General Provisions.
(4) Adjustment of Provisional Taxes

Advance tax, taxes paid on a quarterly basis and Taxes
deducted at source shall be adjusted in the following
manner:
(a) advance Tax shall be adjusted at the time of filing
of tax return against provisional tax payable
provided accounts are submitted;
(b) taxes paid on a quarterly basis shall be adjusted at
the time of filing of tax return provided the proof
of payment is produced;
(c) TDS shall be adjusted:
(i) at the time of advance tax payment;
(ii) at the time of provisional tax payment;
(iii) at the time of final tax payment;
(iv) provided accounts have been submitted
(BIT/CIT taxpayers) and TDS certificates
produced.
Provisional taxes paid in excess of final taxes shall be

refunded as per Section 23 of General Provisions of
the Income Tax Act of the Kingdom of Bhutan, 2001.

(5) Interest on Outstanding Tax
Any taxes not paid to the RGOB shall result in penal
interest at the rate of 24% per annum from the due date.
Registration of Taxpayers and Filing of Tax Return
5. The registration of tax payers and filing of tax return shall

be as per the rules prescribed below:
(1) Tax Registration
All companies shall register with the RRCO where its
registered Head Office is located within 3 months from
the date of its incorporation.
Companies can register with the RRCO, either by

submitting the FORM CIT-1 manually or through the
online system.
Location of RRCOs and their area or jurisdictions are

indicated below:
Sl. Regional Revenue &
Dzongkhags
No. Customs Office
Thimphu, Punakha, Wangdue Pho-
1 Thimphu
drang and Gasa
2 Phuentsholing Chukha
3 Samtse Samtse
Sarpang, Tsirang, Dagana &
4 Gelephu
Zhemgang
5 Samdrup Jongkhar Samdrup Jongkhar, & Pema Gatshel,
6 Paro Paro and Haa
Mongar, Lhuentse, Trashigang &
7 Mongar
Trashiyangtse
8 Bumthang Bumthang & Trongsa

Upon registering with the RRCO, a Tax Payer Number
(TPN) shall be allocated to the company. The TPN
number allotted shall be used to identify all transactions
of the company and must be quoted as a reference in
all correspondences with the Department.
(2) Change of Registration from One RRCO to Another

Registration may be changed from one RRCO to
another on submission of online request or a written
application by a taxpayer, no later than 2 months before
the end of the income year. The concerned RRCO must
convey the decisions within one month from the date
of receipt of application.
Where permission for transfer of a taxpayer’s

registration from one RRCO to another is given, the
unit must obtain a Tax Clearance Certificate from
the previous RRCO, showing the old registration
details and tax status. The previous RRCO shall be
responsible for submitting a copy of all tax records to
the new RRCO.
Filing of Income Tax Return
6. All companies must submit their return, on a self

assessment basis and pay the applicable taxes to the RRCO
of registration within 31st March following the end of the
income year. If a tax return shows a payable status, unless
the applicable taxes are paid, the return submitted shall not
be treated as return filed.

Tax return shall include the following documents:
(1) annual Corporate Income Tax Return as per
FORM CIT-2;
(2) copy of Statutory Audit Report or Provisional
Financial Statements;1 and
(3) evidence of any taxes paid in installments or TDS
as per Rule No. 4(4) of this Part.
Failure to file the income tax return as required shall attract

fines and penalties as per Chapter 5 of the General Provisions
of the Income Tax Act of the Kingdom of Bhutan, 2001 and
Rule No. 63 of the General Provisions.
Correction of Tax Return
7. A taxpayer may correct their tax return within 15 days from

the date of submission of tax return on genuine grounds and
reasons acceptable to the RRCO. The request for correction
of return may be made online or submit application by
writing to the concerned RRCO.
Postponement of Filing
8. Where a taxpayer is unable to submit the tax return within
the due date, the Regional Director of the concerned RRCO
may extend the time limit up to 31st May provided that:
(1) the taxpayer submits written request for extension
1 The submission of statutory audit report is mandatory. Wherein Provisional Financial Statements
have been submitted due to the statutory audit being pending during the time of filing tax returns,
the Company shall ensure that the statutory audit reports are submitted after the completion of
the statutory audit.

before 20th March;
(2) postponement of filling shall not postpone the
payment of tax. In such case, the taxpayer shall make
a suitable provisional tax payment equal to tax paid
in the previous year or on a selfestimated tax, which
whichever is higher.
Request for extension beyond 31st May shall be forwarded

by the RRCO to the DRCHQ. DRCHQ may extend the time
limit up to 31st August, in exceptional cases, provided the
request is received by RRCO within the 20th of May.
Tax Holidays and Incentives
9. The Ministry of Finance may announce, from time to

time, such tax holiday and tax incentives and prescribe the
conditions and procedures thereof, in the interest of the
public in line with the government policy.
Allowable Deductions
10. The allowable deductions shall be as per the Rules prescribed

below:
(1) General Principle
Deductions shall be allowed for tax purposes if proper
books of accounts are maintained as per the provisions
under Rule No. 62(1) of the General Provisions.
In order to qualify as an allowable deduction an

expense must be incurred solely and exclusively for

the purpose of the business and transactions done on an
arm’s length basis.2 All expenses must be supported by
objective evidences such as purchase invoices, money
receipts or other legally valid documents.
Where only part of an expense has been incurred for

the purpose of business or company, then only that part
of the expenses shall be allowed as a deduction in the
calculation of taxable profit.
Any expenses charged in excess of the limits prescribed

under these Rules shall be added back to Net Profit and
subject to tax.
Allowable deductions are grouped into the following

broad categories:
(a) direct costs;
(b) employment expenses;
(c) overhead Expenses;
(d) sales & marketing expenses;
(e) bad debts;
(f) miscellaneous/general Expenses.
(g) fixed Assets & depreciation
(h) financial expenses
(2) Direct Costs

All direct costs incurred solely for the purpose of
the business and associated with the operation of the
2 Arms length’s basis mean transactions at the prevailing market conditions and where there is
noconflict of interest.

enterprise are allowable deductions. Direct costs are
those costs, which can be directly attributed to the
generation of income. e.g. raw materials purchased by
manufacturing industries.
(3) Employment Expenses

Employment expenses means salary, wages, labour
permit fees and allowances paid in money or
money’s worth to an employee in relation to his or
her employment and includes pay and any benefits
provided free of cost or at a concessional rate by an
employer.
(a) Salary
Salary means pay and allowances, and include
benefits provided to an employee free of cost or
at a concessional rate. An employee shall refer to
a natural person who is employed full time in the
business. Salary shall be allowed as deductible
expense only on the fulfillment of the following
conditions:
(i) all information and documentary evidence
are available regarding the payment of salary;
(ii) the employee is a regular employee of the
company or business;
(iii) the employee is actually working with the
company; and
(iv) the employee is actually located at the
appropriate place of work.

(b) Wages
Wages means payments made to an individual
who is not a regular employee of an organization.
Wages shall be allowed as deductible expense on
fulfillment of the following conditions:
(i) the personal details of the wage earner such
as name and CID no. in case of Bhutanese
and name and work permit in case of non-
Bhutanese are properly documented;
(ii) documentary evidence such as muster roll
that is duly signed by the wage earner is kept;
(iii) proof of wage payments are supported by
cash and bank transactions.
(c) Benefits
Benefits shall refer to all payments made by an
employer to its employees at free of cost or at
concessional rates, and shall include education
facilities, accommodation, domestic services,
service charges, over time payments, holiday trips,
telephone facilities, medical benefits, conveyance
allowances or transport facilities. Benefits shall be
treated as deductible business expense provided
that it is clubbed under salary and is within the
prescribed limits. Such benefits shall be valued
at the actual cost incurred by the employer, or as
agreed in the Service Manual of the organization
or in accordance with the employment contract.
If actual costs incurred apply to more than one

employee, the total cost shall be allocated on a pro
data basis.
Benefits provided to employees free of cost or at a

concessional rate shall be valued as follows:
(i) Accommodation
Accommodation provided free or at a
concessional rate by an employer to its
employee is a deductible expense if it is
within the salary limit prescribed in Rule
No.24(1) Valuation of accommodation shall
be:
(a) the actual cost incurred by the employer
in providing the accommodation, or
30% of the employee’s basic salary if
the cost cannot be determined;
(b) the actual concessional rate provided to
the employee, or 30% of the employee’s
salary less the rent being charged by
the employer if the cost cannot be
determined.
(ii) Domestic Service

Domestic services provided by an employer
to its employee is a deductible expense if it
is within the prescribed salary limit. The
valuation of domestic services provided free of
cost should be done on the actual cost incurred
by the employer in providing the service.

(iii) Gas, Electricity and Water Supplies
Gas, electricity and water supplies provided
free or at a concessional rate to an employee
is a deductible expense. The valuation of
such benefits shall be the actual cost incurred
by the employer in providing such benefits.
Where the cost cannot be determined, 2% of
the employee’s basic salary shall be taken as
the cost of the benefits.
(iv) Conveyance or Transport Facility

Conveyance or transport facility provided
free or at a concessional rate to an employee
is a deductible expense. Valuation of such
benefits shall be the actual cost incurred by
the employer in providing such benefits.
However, bus services provided for daily

transport of staff to work place shall not form
part of the salary.
(v) Telephone facilities

Telephone facilities provided to an employee
is a deductible expense. The value of such
benefit shall be the actual cost incurred by
the employers in providing the facilities to
the employee.
However, where such benefits cannot be

segregated between private and business use,

50% of the total expense shall be treated as
benefits for PIT purposes.
(d) Bonus
The term ‘bonus’ includes all incentives or
productivity related payments made to an
employee. Bonuses paid shall be allowed as a
deduction subject to fulfilment of the following
conditions:
(i) the amount is reasonable with regard to the
employee’s pay and conditions of service;
(ii) the amount is consistent with the practice in
other similar enterprises; and
(iii) the total bonus payable is limited to 10% of
the assessed net profit or 3 months basic pay
per employee, whichever is lower.
However, in the case of an unincorporated

business, bonus paid to a business proprietor,
partner, or their immediate family (father, mother,
spouse or children) shall not be allowed as
deduction for tax purposes.
(e) Contribution to Provident Fund and Gratuity

Fund
Contributions made by an employer to the
Provident Fund & Gratuity Fund for the benefit of
the employees are allowable deductions subject to
the following conditions:

(i) such contributions are invested with a
financial institution in a separate account not
accessible to the companies and businesses.
(ii) the limits to be applied to this expenditure
must be consistent with the Service Manual
of the company or business. If no such
Service Manual exists, then the Civil Service
Rules shall apply.
In cases where the eventual pay out to the

employee upon his or her retirement is less
than the guaranteed amount in the Service
Manual, any additional amount contributed
thereof by the employer to make up the
guaranteed amount shall be allowed as
deduction. Contributions not payable due to
termination of services shall be added back to
the Net profit and subject to tax.
(f) Staff Welfare Expenses

Staff welfare expenses shall refer to the expenditure
incurred by employer for its employees for
provision of canteen and recreational facilities.
Such expenses should be incurred within the
business premises and shall be allowed as
deductible expense in actual, provided it is
recurrent in nature.
(g) Medical Expenses

Actual cost of treatment of an employee outside

Bhutan shall be allowed as tax deductible expense
subject to the following conditions:
(i) the expenses are in respect to an employee

only; and
(ii) medical treatment shall be as per the National
Guideline for Patient Referral issued by the
Government from time to time and approval
from the National Referral Committee.
(h) Human Resource Development Expenses

Expenses incurred for Human Resource
Development of employees shall be allowed
as deductible expense provided such expenses
are incurred for the purpose of upgrading and
developing the employees’ craft, supervisory and
technical skills or increasing the productivity or
quality of its products.
If such expenses exceed 1% of the assessed

turnover, then the full expenditure must be spread
equally over a period of three years starting from
the year the expense is incurred.
(4) Overhead Expenses
(a) Preliminary Expenses

Preliminary expenses mean all legitimate
expenses incurred prior to the commencement
of a business or in connection with the extension

of an existing business. Such expenses incurred
may be spread equally and allowed as deduction
over the first 3 years of operation. Examples of
these expenses include feasibility studies, market
surveys, engineering services, project reports, and
legal fees.
(b) Research & Development

Research and development is defined as “use of
scientific or technical knowhow” to produce new
or substantially improved materials, mechanisms,
products, processes, systems or services. Research
and development shall be allowed as deduction
subject to the following conditions:
(i) research and development cost not exceeding

2% of the assessed turnover will be allowed
as a deductible expense;
(ii) research and development cost exceeding
2% of the assessed turnover will be treated
as capital expenditure. The full amount of
the cost will be capitalised and depreciated
in three subsequent years immediately
following the income year; and
(iii) any cost of buying machinery, inventory, stock
in trade and immovable property acquired for
the use of research and development shall be
depreciated in accordance with the ordinary
rules of depreciation as referred to under
Rule No. 12 of this Part.

(c) General Office Expenditure
The following items of general expenditure
incurred for the purpose of the business shall be
treated as allowable deductions:
(i) printing & stationery;
(ii) postage & telegram expenses;
(iii) telephone, trunk call & telex charges;
(iv) user charges;
(v) administrative fees and charges;
(vi) any other expenses of similar nature.
(d) Insurance Premium

Insurance premium paid for any assets owned by
an enterprise is an allowable deduction, provided
that the asset is owned / registered and used for
the purpose of the business. Insurance premium
paid for employees to protect against occupational
risks and hazards at their work place shall be
allowed as deduction.
(e) Maintenance & Repair Costs

Maintenance & repair costs refer to current repairs
of buildings and other assets owned and used for
the purpose of the business. The asset must be
shown in the balance sheet and included in the
taxpayer’s fixed asset register.
Current repair costs refer to any cost incurred

to maintain the asset in a consistent working
condition, without changing the nature of the

asset. Only current repair costs shall be treated as
revenue expenditure.
Major repair/enhancement work that modifies

or significantly improves the asset, such that the
original nature of the asset is altered, must be
treated as capital expenditure and depreciated
accordingly.
Where a taxpayer purchases an asset, but that

asset requires additional expenditure to bring it to
a useable condition, such additional expenditure
must be capitalised as part of the cost of the asset.
Where a worn out asset is replaced with a new

asset, the cost of the new asset must be capitalised.
Where an asset is upgraded, i.e. its nature is

fundamentally altered, the associated cost must
be capitalised.
(f) Hire of Plant, Machinery & Vehicles

The hire cost of plant, machinery and vehicles
plus any associated costs referred to in the
lease agreement shall be treated as an allowable
deduction, provided that the expenditure is
incurred for the purpose of business.

(g) Rent of Land & Buildings
Rental of property used for business purposes
along with associated costs referred to in the
lease agreement shall be treated as an allowable
deduction, provided that the expenditure is
incurred for the purpose of business.
(h) Municipal and Motor Vehicle Tax

Municipal and motor vehicle tax shall be allowed
as tax deductions provided that the asset is owned
by the company and used for the purpose of
business.
(i) License Registration & Renewal Fees

License registration and renewal fees are allowable
deductions. However, this provision only applies
to fees related to licenses issued and renewed
by authorised agencies. All other fees that are
sometimes referred to as ‘license fees’ including
auction rights such as liquor license fees, mining
rights are not covered under this provision and not
allowed as deductions.
(j) Legal & Professional Fees/Expenses

All fees and expenses related to legal and
professional work carried out on behalf of an
enterprise for the purpose of business are allowed
as deductions.

(k) Annual Membership Fees & Subscriptions
Any membership fees paid or subscriptions made
to any organisation or association relevant to the
business shall be allowed as deductions.
(l) Interest on Loans

Interest on loans shall be allowed as deductions
subject to the conditions and procedures prescribed
below:
(i) loans are taken from a recognised financial

institution and within the maximum limit of
debt equity ratio of 3:1;
Explanation-For the purpose of this clause,-
(a) the total borrowings for tax purposes
shall not exceed thrice the paid up
capital of the company; Borrowings
include all types of capital loans (e.g.
debentures, term loans etc.), plus any
working capital borrowings (e.g. bank
overdrafts); Capital includes paid up
share capital (CIT taxpayers) or owners’
investment (BIT taxpayers), plus any
retained profit reserves;
(b) assessed Net Loss if any during the
income year shall be deducted from
retained reserves;
(ii) for the purpose of debt equity ratio calculation,

the average debt and equity over a period of

twelve months shall be considered;
(iii) the loan must be taken in the name of the
business and for the purpose of the business;
(iv) interest paid on loans transacted between
holding and subsidiary companies at
prevailing market conditions is an allowable
deduction provided it is shown as income of
the recipient company;
(v) Interest paid prior to the commissioning of
a project (or commencement of a business)
shall be capitalised, and depreciated as part
of the asset; and
(vi) Interest paid on security deposits shall be
treated as taxable income in the books of the
recipient company, and as an expense for the
company making the payment.
(5) Sales & Marketing Expenses

Sales and marketing expenses means expenses incurred
for promotion of sales and include expenses such as
commission, entertainment, publicity, advertisement
etc.
(a) Commission
Commission paid on purchase transactions is
an allowable deduction as it forms part of the
purchase payment for goods or services. However,
such commissions must be clearly stated in the
documentation relating to the purchase.

Commission paid to a sales agent is an allowable
deduction provided that the commission is clearly
stated in all relevant bills, invoices and cash
memos, or a special agreement in writing between
the parties exists and is properly recorded in the
books of accounts.
(b) Entertainment
Entertainment expenses refer to hospitality
expense incurred for existing or potential clients
or customers, agents or supplier. It shall include
gifts provided to clients or customers to promote
the business brand or sales. The entertainment
expenses allowable shall be the lower of actual
amount or 2 percent of the assessed net profit.
However, for tour operating business, it shall
be 8 percent of the assessed net profit or actual
expenses incurred, whichever is lower.
(c) Publicity & Advertisement

Publicity and advertisement expense refers
to the expenditure incurred for promotion of
business product, brand name or to promote
sales. Such expenses shall include printing of
brochure, advertisement through print media,
television, radio, websites, or placard. Publicity
and advertisement expenses shall be allowed as
deductions on an actual basis or 5 percent of the
Assessed Gross Income, whichever is lower.

(6) Bad Debts
Bad debts shall be allowed as deductions subject to the
fulfilment of the following conditions:
(a) Bad debts up to Nu. 25,000 per Debtor

A bad debt of Nu. 25,000 or less per debtor shall
be allowed as deduction on the fulfilment of the
following conditions:
(i) tax has been paid on such debts in a previous
year;
(ii) the debt is not less than 5 years old;
(iii) where the debtor is declared bankrupt under
the Bankruptcy Act of the Kingdom of
Bhutan; or
(iv) scheme of arrangement is made under the
supervision of a judge; and
(v) in the case of financial institutions, bad debts
below Nu.100,000 per debtor may be written
off if the conditions above are met.
However, in the event the bad debt is recovered in

the subsequent years, it shall be incorporated as
income during that year.
(b) Bad debts exceeding Nu. 25,000 per Debtor
Bad debts exceeding Nu. 25,000 per debtor shall
be allowed as deductions on the fulfillment of the
(i) tax has been paid on such debts in the relevant
previous year;

(ii) judicial recourse has been exhausted in
respect of the debt;
(iii) where the debtor is declared bankrupt under
the Bankruptcy Act of the Kingdom of
Bhutan, or
(iv) scheme of arrangement is made under the
supervision of a Judge.
However, in the event the bad debt is recovered in

the subsequent years, it shall be incorporated as
income during that year.
(7) Miscellaneous and General Expenses
(a) Accidental Loss

Accidental loss means loss due to events such as
theft, fire, earthquake, flood and road accidents.
Documentary evidences such as police report
and Court order must support accidental losses,
if applicable. Accidental losses for the purpose of
taxation shall be treated as follows:
(i) revenue losses shall be allowed as deductions
and revenue receipts/compensation as taxable
income;
(ii) capital losses shall be treated as per Rule No.
12(6) of this Part.
(b) Stock Obsolescence

Stock obsolescence shall not be allowed as
deductions unless the obsolescence is due to

unforeseen circumstances and the taxpayer was
not in a position to avoid it. Conditions to be
fulfilled for the above exceptions are:
(i) maintenance of a proper stock inventory
register; and
(ii) proper records showing disposal and sale of
the obsolete stock.
(c) Stock Shortages

Stock shortages due to unavoidable circumstances
within an industry average shall be allowed as
deduction subject to maintenance of proper book
of accounts. Shortages due to negligence shall not
be allowed as deductions for tax purposes.
(d) Taxes paid for purchase of assets

Sales Tax/Goods and Service Tax, Excise
Equalization Tax, Green Tax or Customs Duty
paid for purchase of assets shall be capitalised and
depreciated as per Rule No. 12 of this Part.
However, Sales Tax/GST collected on sale of

domestic goods and services such as Sales Tax/
GST on hotels, restaurant, beer, cement and
entertainment services shall not be allowed as
deductions.
(e) Carriage & Freight Charges

Carriage and freight expenses incurred for business
purposes shall be allowed as deductions. However,

such charges incurred for initial transportation of
fixed assets to its place of use shall be capitalised
and depreciated accordingly.
(f) Donations
Donations made for the following purposes shall
be allowed:
(i) relief fund for natural calamities in Bhutan;
or
(ii) preservation and promotion of religious and
cultural purposes in Bhutan; or
(iii) promotion of sporting, educational and
scientific activities in Bhutan.
However, the following conditions shall apply:

(a) prior approval from the Department must be
obtained;
(b) donation claims must be supported by valid
money receipts;
(c) where donations are made to institutions
such as school, a valid acknowledgement
must be obtained bearing the relevant logos
and seals of the beneficiary; and
(d) total donations allowed shall be 5% of the
Assessed Net Profit.
(8) Carry Forward and Offset of Losses

Losses sustained during an income year may be carried
forward for adjustment against the future profits, if any,
for three immediate come years. The losses can only be

adjusted against the profits of the same business entity.
However, if the losses of a particular income year
cannot be fully adjusted within the three immediate
subsequent income years, it shall stand as lapsed.
Record of losses carried forward must be maintained

and submitted along with the Income Tax Return.
(9) Assets acquired through Grant

Receipt of grants whether in cash or in kind from the
government or from a donor directly or through the
government indirectly shall be taxed as follows:
(a) revenue related grants received for day today
functioning of the organisation shall be treated as
taxable income and all expenses related to such
grants shall be allowed as deductions;
(b) receipt of capital related grants shall not be
subject to tax and expenses incurred in relation
to capital related grants (including depreciation)
shall not be allowed as deductions. Capital grants,
for the purpose of these Rules, means grants
received in kind in the form of land, building,
plant and machinery, equipment, vehicles, tools,
etc or in cash to purchase land, building, plant and
machinery, equipment, vehicles, tools, working
capital such as stock and raw materials.
However, direct expenses including depreciation shall

be allowed as deduction provided:

(i) the grant is treated as capital reserves at comparable
costs in the case of fully owned government
corporations;
(ii) the grant is treated as capital/equity contribution of
the government and shares of equivalent value are
issued to the government in the case of partially
owned government corporations;
(iii) the grant is treated as loan from the government
as per terms and conditions prescribed by
the Ministry of Finance in the case of private
companies/businesses.
(10) Immovable Leased Assets

Assets owned, fixtures erected, and substantial
improvements made on leased land shall be, for the
purpose of these Rules, deemed to be owned by the
lessee subject to the fulfillment of the following
conditions:
(a) there should be a valid lease agreement executed
between the lessor and the lessee, and the
agreement should be for a term period extending
more than five years;
(b) depreciation shall be allowed only to the extent of
investment made by the lessee;
(c) the lessee, on expiry of the lease, shall be
deemed to have disposed of such fixtures and
improvements, gains on which shall be taxable,
and losses deductible;
(d) the lessor after the expiry of the lease shall be
allowed depreciation on such improvements or

fixtures provided consideration equivalent to such
assets have been paid to the lessee, and registered
as the lessors’ assets;
(e) in determining an amount to be claimed as
depreciation of assets and improvements on
leased land, the total investment made by a lessee
shall be apportioned over the term of the lease as
stipulated in the agreement;
(f) where the lease is renewed, extended or continued
pursuant to an option exercisable by a lessee, the
remainder of the value of investment made shall
be spread over the remaining term of the lease.
(11) Lease Rent

Lease rent payable by a lessee to a lessor as consideration
for the property leased is a deductible expense. The
payment of lease rent in lump sum amount must be
spread evenly over the period of the lease, while
payment of lease rent on an annual basis shall be as per
the amount scheduled in the lease agreement.
(12) Deductions not Allowed for Tax Purposes

The following expenses shall not be allowed as
deductions:
(a) domestic and private expenses on food, clothing,
marriage etc.;
(b) personal administrative fees of employees;
(c) payments of dividend or profit distributions to
shareholders, partners and proprietors before tax;

(d) creation of or adjustments to reserves. Creation
of provision for bad debts/advances except
reserves for loan loss contingencies for financial
institutions;
(e) life and/or health insurance premiums except
for schemes that have been approved by the
Government;
(f) Business, Corporate and Personal Income Tax;
(g) penalties, fines, penal interest, forfeiture, etc.;
(h) donations other than those authorised by the
Ministry;
(i) bad debts not fulfilling the conditions under the
Act;
(j) any sum, by whatever name called, payable for
the use of license or permit through public auction
or tender;
(k) any other expenses not related to the business.
Deductions and Carry Forward of loss by the debtor when

the debt is forgiven
11. When a debt is forgiven by a creditor, both the debtor and

creditor shall make the following adjustments in the books
of accounts:
(1) debtor cannot carry forward as a loss the forgiven

amount;
(2) where conditions laid down in Section 19, Chapter 5,
Part I of the Income Tax Act of the Kingdom of Bhutan,
2001 are not fulfilled, and the creditor cannot treat the

forgiven debt as a loss. Such debt shall be added back
to the taxable Net Profit.
Depreciation
12. Fixed assets, for the purpose of these Rules, are assets that
are intended for use within the enterprise on a continuous
basis for more than one accounting period.
(1) Depreciation of Fixed Assets

The Rules regarding depreciation of fixed assets are as
follows:
(a) depreciation on assets purchased and owned by the
taxpayer and used for the purpose of the business,
except antiques, works of art and land, will be
allowed as deduction, subject to the maximum
depreciation rates prescribed in Annexure II;
(b) for unincorporated businesses, where an asset is
owned by the taxpayer and it is used in the business,
depreciation expenses shall be allowed only for
the portion of the asset used in the business. e.g.
Mr. X owns a 5 storied building (ground+ four)
which he converts to a Hotel. The hotel covers
four floors and the ground floor is used to let
out as shop space. For the purpose of taxation,
depreciation expense shall be allowed only for the
four floors of the building being used as a hotel.
The income from the ground floor from shop space
will not form a part of his Business Income, but

would be his personal income accountable under
PIT;
(c) depreciation shall be calculated on the Straight
Line Method (SLM) on an asset at the end of the
year;
(d) assets purchased during the year shall be
depreciated on a pro rata basis from the date of
purchase;
(e) assets disposed off during the year shall not
be depreciated in the year of disposal and the
difference between the sale proceeds and the
written down value at the beginning of the year
shall be declared in the profit and loss account.
(f) small assets costing up to Nu. 25,000 in total per
taxpayer in each income year may be written off.
e.g. calculator, blow/rod heater, fans and the like;
(g) maintenance of an asset register for all types of
assets is mandatory, and must include details of
each individual fixed asset owned by the business
or company;
(h) fully depreciated assets that are still in use must
be recorded in the asset register at a value of Nu.1
for identification purposes;
(i) where business premises are closed for a
considerable period or more then 180 days in one
income year, no depreciation of assets will be
allowed during that time;
(j) where the asset is only partially used by the
business, then only an appropriate portion of the
depreciation can be charged for tax purposes.

In order to claim depreciation, the following conditions
must be fulfilled:
(i) the asset must be purchased and registered in the

name of the business or company;
(ii) the asset must be put to use exclusively for the
purpose of the business; and
(iii) proper books of accounts must be maintained,
including a complete fixed asset register
containing details of each individual asset for
which depreciation is claimed.
The depreciation rates given in Annexure II are the

maximum limits allowed. Where a taxpayer applies
a lower depreciation rate than that prescribed in
Annexure II, the taxpayer will be permitted to make
a clear adjustment on the tax return. However, if this
adjustment is not made, the tax officer will not be
responsible for increasing the depreciation claim on
the taxpayer’s behalf, and should accept the lower
amount charged in the accounts.
(2) Maintenance & Repair of Fixed Assets

Expenses for the maintenance and repair of fixed assets
are classified as operating expenses and shall be written
off in the year the work is carried out. However, if the
maintenance or repair substantially enhances the value
of an asset then that expenditure shall be capitalised
and depreciated accordingly.

(3) Fixed Asset Additions
Where a new asset is purchased and delivered during
the income year, depreciation must be charged on a pro
rata basis.
(4) Fixed Asset Disposals

When a fixed asset is sold, the profit earned or loss
sustained is part of the taxable net profit or loss of
the business or company. The correct profit or loss on
disposal is calculated by deducting the net book value
of the asset from the actual sales proceeds. Where
disposal is not as per market conditions, a tax officer
shall have the right to determine the residual value.
(5) Appreciation of Fixed Assets

If the revaluation of the assets of a business, result in a
higher value than that previously shown in the accounts,
then the increase in value must be declared as taxable
income in the profit and loss account. However, where
no depreciation is claimed on this increased value in
the profit and loss account, then the increase in value
of the asset need not be declared as taxable income in
the profit and loss account.
(6) Loss of Fixed Assets due to Theft, Fire and Natural

Calamities
Loss of fixed assets due to theft, fire and natural
calamities such as earthquake and flood may be written
off in the books of accounts. The value of the asset to

be written off shall be equivalent to the written down
value as on 31st December of the previous year. No
depreciation shall be allowed on such fixed assets in
the year that it is written off.
(7) Depreciation Rates

Depreciation shall be allowed every income year up to
the maximum rates prescribed in Annexure II.

PART II
BUSINESS INCOME TAX (BIT)
In addition to Rules under this Part, Rules framed for Part I of

the Act shall also be applicable to Part II until and unless it is
specifically excluded.
Business under the Same Ownership
13. Where a taxpayer owns several businesses under the

trading sector, each business shall be treated as a separate
or independent taxable entity, and the losses incurred in one
taxable entity cannot be offset against the profit of another
entity.
14. For the purpose of taxation, multiple trade licenses under

the trading sector (wholesale or retail trade activity or both
wholesale and retail trade activity) operating under the same
roof or from the same outlet, under the same ownership
maybe categorised as one business (single taxable entity).
15. Trading licenses (wholesale or retail trade activity or

both wholesale and retail trade activity) under the same
ownership, operating from the different outlet or different
locations shall be treated as different businesses (separate
taxable entity).
16. Businesses under the manufacturing and service sector

may be treated as one taxable entity irrespective of their

geographical locations provided that the following
conditions are fulfilled:
(1) registered as a single tax entity under the same
ownership;
(2) same activity under the manufacturing and service
sector;
(3) consolidated accounts are submitted.
17. Notwithstanding the above Rules, where the nature of the

business requires several licences to be operated under
one roof irrespective of the activity of licenses and such
activities are complimentary to one another, these licences
maybe treated as a single business (same taxable entity)
provided that the licences are under the same ownership.
e.g. Approved three star hotels will have several licences
with different activities (restaurant, bar, handicrafts, fitness
centre, money changer etc) operating under one roof which
maybe treated as one business unit (single taxable entity)
for the purpose of taxation.
Rates & Calculation of Income Tax
18. The rate and calculation of tax shall be as per the Rules
prescribed below:
(1) Full Tax Liability

All unincorporated businesses issued with a licence by
the issuing Authority shall pay Business Income Tax
(BIT) at the rate of 30% of the Net profit. Net profit
for the purpose of calculating the tax shall be the Gross

income minus the allowable deductions under these
Rules.
(2) Limited Tax Liability

The rates of income for businesses under limited tax
liability shall be as follows:
(a) permanent establishment at the rate of 30 percent
of the net profit;
(b) contractors and consultants at the rate of 3 percent
of the contract value;
(c) income from interest and royalty at the rate of 5
percent of the gross amount; and
(d) income from dividend at the rate of 10 percent of
the gross amount.
The taxes rates under Rule No. 18(2)(b)(c)(d) are final

taxes and tax returns shall not be filed.
(3) Time Limit for Payments

All businesses shall pay their tax on a selfassessment
basis to the RRCO of registration within 31st March
following the end of the income year (1st January to
31st December). However, provisional taxes paid by
way of TDS and tax paid quarterly shall be paid as per
Rule No.60(2)(a), 60(2)(b) and 60(2)(c) of the General
Provisions.
(4) Adjustment of Provisional Taxes

Advance tax, taxes paid on a quarterly basis and TDS
shall be adjusted in the following manner:

(a) advance Tax shall be adjusted at the time of filing
of tax return against provisional tax payable
provided accounts are submitted;
(b) taxes paid on a quarterly basis shall be adjusted at
the time of filing of the tax return provided proof
of payment is produced;
(c) TDS shall be adjusted:
(i) at the time of advance tax payment;
(ii) at the time of provisional tax payment;
(iii) at the time of final tax payment;
Provided accounts have been submitted (BIT/CIT

taxpayers) and TDS certificates produced (BIT/CIT/
PIT taxpayers).
Provisional taxes paid in excess of final tax shall be

refunded as per Section 23 of General Provisions of
the Income Tax Act of the Kingdom of Bhutan, 2001.
(5) Interest on Outstanding Tax

Any taxes not paid to the RGOB shall result in penal
interest at the rate of 24% per annum from the due date.
Tax Registration and Change of Registration
19. The registration and change of registration shall be as per

the rules prescribed below:
(1) Registration
All businesses are required to register with the RRCO

from where trade license or permit is issued or wherever
the Head Office is located, within 3 months from the
date of obtaining such a trade license or permit.
Registration shall be done with the nearest RRCO by

using FORM BIT-1.
Businesses can register with the RRCO, either by

submitting the FORM BIT-1 manually or through the
online system.
Location of RRCO and their areas of jurisdiction are

indicated below:

Dzongkhags
No. Customs Office
1 Thimphu Thimphu, Punakha, Wangdue Phodrang and Gasa
3 Samtse Samtse
4 Gelephu Sarpang, Tsirang, Dagana & Zhemgang
6 Paro Paro and Haa
7 Mongar Mongar, Lhuentse, Trashigang & Trashiyangtse
Upon receipt of FORM BIT-1, the RRCO shall register

and allocate a Tax Payer Number (TPN) to the business.
The TPN number allotted shall be used to identify all
tax transactions relating to that taxpaying unit and
must be quoted as a reference in all correspondences
with the Department.


unit must obtain a Tax Clearance Certificate from the
previous RRCO, showing the old registration details
and tax status. This certificate must be submitted to the
new RRCO. The previous RRCO is responsible for
submitting a copy of all tax records to the new RRCO.
20. All businesses must submit their tax return on a self

assessment basis and pay the applicable taxes to the

concerned RRCO within 31st March following the end of
the income year. If a tax return shows a payable status,
unless the applicable taxes are paid, the return submitted
shall not be treated as return filed.
Tax return must have the following documents:

(1) annual Business Income Tax Return as per FORM
BIT-2;

(2) annual accounts as per Rule No. 62(1) of the
General Provisions or returns prepared/certified
by tax accountants;
(3) evidences of any taxes paid in instalments or TDS
as per Rule No. 18(4) of this Part; and
(4) such income tax return should bear the name,
signature, seal and address of the license holder
and the accountant who has prepared the accounts.
Failure to file the income tax returns as required shall attract

fines and penalties as per the provisions under Chapter 5
of the General Provisions of the Income Tax Act of the
Kingdom of Bhutan, 2001 and Rule No. 63 of the General
Provisions.
22. Where a taxpayer is unable to submit the Tax Return within


(1) the taxpayer submits a written request for extension
before the 20th March; and
(2) postponement of filing shall not postpone the payment
of tax. In such case, the taxpayer shall make a suitable
provisional tax payment equal to tax paid in the
previous year or the self-estimated tax, whichever is
higher.
23. Request for extension beyond 31st May shall be forwarded

limit up to 31st August, in exceptional cases, provided the
request is received by RRCO within the 20th of May.
Allowable Deductions
24. The allowable deductions shall be as per the Rules prescribed

below:
(1) Salary
Notwithstanding anything contained under the Rule
No.10(3)(a) of Part I, Salary under this Rule shall be
allowed as deductible expense only up to the maximum
ceiling prescribed herein below:
(per month)
Category BIT
Large 70,000
Medium 60,000
Small 40,000
Cottage/Micro 30,000

The categorization of companies and businesses shall
be as per categorization given in Annexure I.
(a) Remuneration to the proprietor of business and
partnership firm may be allowed as deductible
expense, as follows:
(i) where a proprietor owns more than one
business, his remuneration shall be allowed
in full but only to one business unit if he is
engaged full-time in a day to day running of
the business. However, the maximum limit
as prescribed under the Rule No. 24(1) shall
apply;
(ii) in the case of partnership firm, the
remuneration shall be allowed to a full time
working partner only. If more than one
partner is engaged on a full time basis in
specialised firms such as consultancy and
chartered accountancy firms, each full time
working partner shall be allowed a full salary.
However, the maximum limit as prescribed
under the Rule No. 24(1) shall apply.
(2) Municipal and Motor Vehicle Tax

Municipal and motor vehicle tax shall be allowed as tax
deductions provided that the asset is registered in the
name of the business or the license holder, reflected in
the asset register and used for the purpose of business.

(3) Depreciation
Notwithstanding anything contained in Rule 12, Part
I, depreciation under this rule shall be allowed as
deduction provided that the asset is registered in the
name of the business or the license holder, reflected in
the asset register and used wholly and exclusively for
the purpose of business.

PART III
PERSONAL INCOME TAX (PIT)
Tax Liability
25. The tax liability shall be as per the Rules prescribed below:
(1) Liability to Tax

Persons having Personal Gross Income exceeding Nu.
300,000 per annum shall be liable to be taxed under
Personal Income Tax (PIT). Personal income means
income derived from the following sources:
(a) salary income from employment and nonlicensed
consultancy fees (refer Rule No. 35(1) of this
Part);
(b) rental income from real property in Bhutan (refer
Rule No. 35(2) of this Part);
(c) dividend from sources in Bhutan (refer Rule No.
35(3) of this Part); and
(d) income from other sources in Bhutan (refer Rule
No. 35(4) of this Part).
(2) Citizen
Citizen means an individual possessing the citizenship
of the Kingdom of Bhutan.
(3) Resident
Resident means any person whose stay in the Kingdom
of Bhutan during an income year is equal to or more
than 6 months. Income year means the calendar year

starting 1st January and ending 31st December.
Any person whose stay in the Kingdom is less than 6

months in an income year shall be covered under Rule
No. 25(4) and 30 of this Part.
(4) Any Other Person having Personal Income from

Sources in Bhutan
Any person not a citizen or a resident but having
personal income from sources in Bhutan or for the
work performed in Bhutan shall be liable to pay PIT.
Income from sources in Bhutan means income earned
from taxable sources in Bhutan or income earned for
work performed in Bhutan.
(5) Taxation in the Case of Income of a Deceased

Person, Married Couples and Minors
Income of deceased persons, married couples and
minors shall be taxed according to the following
procedures:
(a) Income of Deceased Persons

Where a person dies during the income year,
his legal representative shall be liable to pay
any income tax or other sum payable, which the
deceased would have been liable to pay, in the
same manner and to the same extent. The legal
representative shall for the purpose of personal
income tax, be deemed to be an assessee. However
before deeming the legal representative of the

deceased to be an assessee, a notice to that effect
would have to be obtained from the concerned
court and submitted to and approved by the
Department.
The legal representative is liable for all liabilities

of the deceased person, upto the extent to which
the estate of the deceased is capable of meeting the
liability and only until the estate of the deceased
person has been administered to the legal heirs.
Where no legal representative has been appointed

for the deceased person, any beneficiary enjoying
the income of the deceased shall be liable to pay
income tax.
(b) Married Couples

Married couples shall be taxed separately. Income
earned from joint ownership of assets shall be
divided equally unless otherwise specified in a
written agreement.
(c) Minor
Minor means an individual below 18 years of age:
(i) income of a minor shall be clubbed with

one of the parents’ income for the purpose
of determining personal income. A minor’s
income may be clubbed with either one of the
parents’ incomes provided both the parents

have taxable sources of income. Where only
one of the minor’s parents has a taxable
source of income, the minor’s income shall
be clubbed with that parent;
(ii) however, once a minor has clubbed his or her
income with either one of the parents, then
they will not be allowed to club their income
with the other parent, in subsequent years;
(iii) where a minor has a guardian appointed by
the Court, the minor’s income shall be taxed
separately. Responsibility for filing the tax
returns and payment of tax shall be on the
guardian appointed by the Court;
(iv) a minor having personal income from
property inherited by way of will shall be
taxed separately. Properties inherited by way
of will means any property inherited by will
from a deceased person and where parents
or guardians appointed by the Court have
no right to sell, transfer or dispose of the
property.
(6) Members of Diplomatic Mission and Consular

Posts
Notwithstanding the provisions under Section 3, Part
III of the Income Tax Act of the Kingdom of Bhutan,
2001 the following shall be liable for PIT:
(a) bhutanese citizens working in Bhutan for

Diplomatic Missions and International

Organisations, e.g. UN Agencies and donor/
externally supported projects;
(b) persons other than Bhutanese citizens not covered
under fiscal privileges of members of Diplomatic
Missions or Consular Posts under the General
Provisions of International Law or persons under
the provision of special agreements.
Registration of Taxpayers and Change of Registration
26. The registration and change of registration shall be as per

the Rules prescribed below:
(1) Tax Registration

All citizens aged 18 years and above and residents
having personal income from one or more of the
sources during an income year shall register as per the
procedures given below:
(a) individuals may register with RRCO’s either
through the online system or filling in the FORM
PIT1 and submitting it manually to the RRCO;
(b) a person must mention in the Registration the
RRCO where he/she would like to be registered
as a taxpayer;
(c) citizen ID No./Resident Permit Number issued
by the Department of Immigration and Census
shall be used as the key identification number for
registration and must be used as a reference for all
future tax transactions.

Location of RRCOs and their area of jurisdiction are indicated
below:
Dzongkhags
No. Customs Office
1 Thimphu Thimphu, Punakha, Wangdue Phodrang and Gasa
3 Samtse Samtse
4 Gelephu Sarpang, Tsirang, Dagana & Zhemgang
6 Paro Paro and Haa
7 Mongar Mongar, Lhuentse, Trashigang & Trashiyangtse


person must obtain a Tax Clearance Certificate from the
previous RRCO, showing the old registration details
and tax status. This certificate must be submitted to the
new RRCO. The previous RRCO shall be responsible
for submitting a copy of all tax records to the new
RRCO.

(3) Cancellation or Deactivation of PIT Registration
For PIT purposes, cancellation of registration takes
place when a person dies or foreign expats leave
the country permanently. Deactivation takes place
when a person no longer has taxable income or a
person migrates to another country. In such cases, an
authorised representative or the taxpayer shall inform
the concerned RRCO and obtain a Tax Clearance
Certificate. A Tax Clearance Certificate shall be issued
to the taxpayer by the RRCO.
27. All citizens aged 18 years and above and residents having
taxable personal income under Rule No. 25(1) of this Part
or their authorised representatives or persons claiming
refund shall file the tax return either online or as per FORM
PIT-2 and pay the applicable taxes (if any) to the concerned
RRCO before 1st March following the end of the income
year. If a tax return shows a payable status, unless the
applicable taxes are paid, the return submitted shall not be
treated as return filed.
28. All tax return forms must contain full and correct
information regarding the income and deductions and must
be accompanied by relevant documents such as money
receipts and TDS certificates for adjustment of TDS and
taxes paid half yearly/quarterly.

29. Failure to file the income tax return as required shall attract
fines and penalties as per Chapter 5 of the General Provisions
of the Income Tax Act of the Kingdom of Bhutan, 2001 and
Rule No. 63 of the General Provisions.
Persons other than Citizens or Residents
30. Any person not a citizen or a resident but having personal

income from sources in Bhutan or from work performed in
Bhutan, TDS paid shall be treated as the final PIT and return
shall not be filed. Where taxes have not been deducted at
source, such person shall be required to pay the applicable
TDS as final tax liability.
32. Where a taxpayer is unable to submit the tax return within

(1) the taxpayer submits a written request for extension
before 20th February for PIT;

(2) postponement of filing shall not postpone the payment
of tax. In such cases, the taxpayer shall make a suitable
provisional tax payment equal to or more than the tax
paid in the previous year.
33. Request for extension beyond 1st May shall be forwarded

limit up to 1st August, in exceptional cases.
Payment of Tax
34. Citizens or residents shall pay PIT on a self assessment

basis at the time of filing the tax return. TDS/tax paid half
yearly or quarterly shall be adjusted against the tax liability
and any payment in excess shall be refunded as per Section
23 of the General Provisions of the Income Tax Act of the
Kingdom of Bhutan, 2001.
Sources of Income Liable to Tax
35. The sources of income liable to tax shall be as per the Rules
prescribed below:
(1) Salary Income from Employment

Salary means pay, wages, allowances, remuneration,
leaves encashment, share of profit received by an
employee and includes benefits received free or at a
concessional rate. Salary income shall be taxed on an
accrual basis.

Gross salary income means a total of pay, wages, sitting
fees, allowances, bonus, commission, and benefits as
valued under Rule No. 10(3)(c) of Part I.
Adjusted Gross Salary Income means the Gross Salary

Income after specific deductions/exemptions.
Where an individual earns salary income from more

than one employer during the same income year, all
salaries shall be added to the Gross Salary Income.
Consultancy fees received by a non-licensed consultant
from an employer in Bhutan or for work performed
in Bhutan for an employer abroad shall be treated as
salary and be subject to tax.
However, the following incomes shall be excluded

from the computation of salary income provided they
are within government rates:
(a) leave travel concession;
(b) travel allowances and daily allowances given
while on tours;
(c) transfer grants and transportation costs given on
transfers;
(d) foreign allowance and Representational Grant
given to the civil servants of the Royal government
employees stationed outside the country;3
(e) stipend received by trainees, exchange students
and living allowances received by volunteers
working in Bhutan;4
3 82nd Session of National Assembly, June 2004

4 National Budget Report Financial Year 2002-2003 & the 80th Session of
National Assembly June 2002.

(f) all allowances and free or subsidized facilities of
armed forces;
(g) all retirement benefits paid as Gratuity, Pension
and Provident Fund;
(h) discretionary grant as defined under Pay Revision
Act.
(a) Specific Deductions

The following deductions shall be allowed as
deductions from gross salary income:
(i).
General Provident Fund (GPF)
contributions made to a pension plans
maintained with a financial institution. The
maximum deductible rate of the contribution
shall be limited to the rate of the scheme
maintained by the National Pension &
Provident Fund when:
(a) pension plan is maintained with a
Financial Institution in Bhutan other
than the NPPF; or
(b) the pension plan is maintained outside
Bhutan for an employee who is on a
deputation in Bhutan.
(ii).
Group Insurance Scheme (GIS)
contributions maintained with Insurance
Companies within Bhutan. The maximum
deductible contribution shall be as per

Annexure I of the Group Savings & Insurance
Scheme Guidelines, 2016. 5
(b) Payment of Tax

Tax shall be deducted at source (TDS) by the
employer at the rate prescribed in Annexure III in
accordance with the procedures laid down in Rule
No. 60(2)(b)(i) of the General Provisions.
Where an employer is not under any legal obligation

to deduct tax at source from its employees, the
individual, i.e. the employee, shall be responsible
for paying tax as per rates prescribed in Annexure
III to the RRCO on a quarterly basis.
For citizens and residents, TDS or tax paid on a

quarterly basis shall be adjusted against their final
tax liability at the time of filing the tax return. For
persons other than a citizen and resident, TDS or
tax paid by the individual on a quarterly basis shall
be treated as final tax and return shall not be filed.
(2) Rental Income from Real Property in Bhutan

Real property means land, building, houses, factory
buildings, warehouses and any other structures earning
rental income. Rental income from real property shall
be taxed on an accrual basis.
5 GPF & GIS as per 80th Session of National Assembly, June 2002

Gross Rental Income means total rental income from
real property during an income year before specific
deduction(s)/exemption.
Adjusted Gross Rental income means Gross Rental

Income from real property after specific deductions/
exemptions mentioned under Rule No. 35(2)(a) of this
Part.
(a) Specific Deductions/Exemption(s)

The following expenses shall be allowed as
deductions from rental income:
(i) interest paid on borrowings provided that the
loan:
(a) is in the name of the taxpayer (property
owner);
(b) is taken for the purpose of construction or
purchase of the real property generating
rental income and these are specifically
stated in the loan documents;
(c) is taken from a recognised financial
institution; and
(d) is supported by relevant documents.
(iii) 20% of the Gross Rental Income shall

be allowed as deductions for repairs and
maintenance expenses;
(iv) actual municipal taxes and urban house taxes
paid, if supported by documents such as
money receipts;

(v) insurance premium paid to a recognised
insurance company, if supported by
documents.
The above deductions shall not be allowed for self

occupied units and for real property not generating
rental income. However, in the case of property
remaining vacant up to a period of three months
in an income year the above deductions shall be
allowed provided, the conditions laid down under
Rule No.35(2)(b) of this Part, are fulfilled.
(b) Exemption from Tax

(i) One dwelling unit used for self occupation
shall be exempt from tax. However, in the
case of married couples only one unit shall
be exempted. Married couples residing
in separate locations due to employment
related reasons shall be allowed to claim tax
deduction for one dwelling unit each for self
occupation upon presentation of the proof of
employment and that units are actually self
occupied subject to the conditions under Rule
No. 35(2)(a).6
(ii) Any property remaining vacant shall be

exempted from PIT subject to the fulfillment
of the following conditions:
6 National Budget Report, Financial Year 2002-2003 & the 80th Session of National
Assembly, June 2002.

(a) the property has remained vacant and
there was no rental income;
(b) the RRCO of registration has been
informed in writing of the property
remaining vacant within fifteen days;
(c) documentary proof to let out the said
property is produced;
(d) property kept vacant and not covered
under (a) and (b) above shall be deemed
as property let out and rent will be
calculated on the fair market price.
(c) Payment of Tax

Government, Semi Government, NGOs,
Companies or Business entities shall withhold
TDS at the rate of 5% on the gross rental income
payments made by them as per Rule No. 60(2)(b)
(ii) of the General Provisions.
Where rental income is received from persons

other than those mentioned above, individuals
receiving the income shall be responsible for
declaring at the time of filing.
TDS shall be adjusted against their final tax

liability at the time of filing the tax return.
The property owners shall be required to issue

valid money receipts for rental income received.
Failure to issue money receipts shall attract fines

and penalties as per Section 32, Chapter 5 of the
General Provisions of the IT Act. Rental payment
shall be made online or through cheques.
(3) Dividend Income

Dividend income means any income earned from
holding of shares in a company registered in Bhutan.
However, such income does not include dividends
received in the form of bonus shares. Dividend shall
be taxed on a receipt basis.
Gross Dividend income means total dividend income

during an income year before specific deduction(s)/
exemption.
Adjusted Dividend Income means gross dividend

income after specific deductions as mentioned under
Rules No. 35(3)(a) and 35(3)(b) of this Part.
(a) Specific Deductions

Interest paid on borrowings shall be allowed as
deductions provided that the loan:
(i) is in the name of the taxpayer (shareholder);
(ii) is taken for the purchase of shares and this is
specifically stated in the loan document;
(iii) Is taken from a recognised financial
institution; and
(iv) Is supported by relevant documents.

(b) Specific Exemption
Total Dividend Income up to Nu. 30,000 per
annum per taxpayer shall be exempted.
(c) Payment of Tax

A company paying dividend to its shareholders
shall at the time of payment shall deduct tax on
dividend income at source as per rates prescribed
below and deposit to the concerned RRCO in
accordance with Rule No. 60(2)(b)(iii) of the
General Provisions.
Dividend Nu. 30,000

No deductions
or below
Citizens or residents Dividend Nu. 30,001 & 10% of the Total
above Dividend Income
Person other than 10% on the Total Dividend Income as final tax and
citizens or residents tax returns need not be filed.
(4) Income from Other Sources

Income from other sources means income derived
from the following sources:
(a) income from hire of privately owned vehicles, but
excluding trucks and taxis registered in Bhutan;
(b) income from hire of privately owned plant and
machinery; and
(c) income from intellectual property rights.
Intellectual property means income from copyrights,

patent, trademark, design, model or any artistic or

scientific work. Income from other sources shall be
taxed on an accrual basis.
Gross Income from Other Sources means total income

from other sources during an income year before
specific deductions/exemption.
Adjusted Gross Income from Other Sources means

gross income from other sources after specific
deductions /exemption mentioned under Rule No.
35(4)(a) of this Part.
(a) Specific Deduction

30% of the Gross Income from Other Sources
shall be allowed as deductions.
(b) Payment of Tax

Government, Semi Government, NGOs,
Companies or Business entities shall withhold
TDS at the rate of 5% on the gross income from
other sources on payments made by them as per
Rule No. 60(2)(b)(vii) of the General Provisions.
Where income from other sources is paid by

persons other than those mentioned above,
individuals receiving the income shall be
responsible for declaring the income so received,
at the time of filing.

For citizens and residents TDS shall be adjusted
against their final tax liability at the time of filing
the tax return. For persons other than a citizens
or residents, TDS shall be treated as final tax and
return shall not be filed.
General Deductions
36. General Deductions shall be given from the Total Adjusted

Gross Income in the manner prescribed below:
(1) Insurance Premium7

Insurance premium paid to a recognised Insurance
Company in Bhutan against the insurance policies
covered under Annexure- 1A shall be allowed as 100%
deduction. However, in respect of premium paid against
insurance policies covered under Annexure- 1B shall
be allowed with only 50% deduction but subjected to a
maximum deduction of Nu. 50,000.00 per annum per
taxpayer.
(2) Donations
Donations made for the following purposes shall be
allowed:
(a) relief fund for natural calamities in Bhutan; or
(b) preservation and promotion of religious and
cultural purposes in Bhutan; or
(c) promotion of sporting, educational and scientific
activities in Bhutan.
7 Insurance Premium deduction as per National Budget Report, Financial Year
2002-2003 & the 80th Session of National Assembly June 2002.

However, the following conditions shall apply:
(i) prior approval from the Department must be
obtained;
(ii) donation claims must be supported by valid
money receipts;
(iii) where donations are made to institutions such
as school, a valid acknowledgement must be
obtained bearing the relevant logos and seals of
the beneficiary; and
(iv) total donations allowed shall be 5% of the Total
Adjusted Gross Income.
(3) Education Expense
(a) Dependent Children

Education expense for dependent children (own
or legally adopted) shall be allowed as deduction
from the total adjusted gross income as per the
(i) the actual cost of education incurred shall be

allowed as deduction up to a maximum limit
of Nu. 350,000 per child provided, that the
claim is supported by relevant documents;
(ii) both parents cannot claim the allowance for
the same dependent child;
(iii) where children aged 18 years and above start
earning, either as an employee or through a
profession or business, the individual can no
longer be considered a dependent and neither

can his status revert to dependent for the
purpose of taxation;
(iv) for children having been awarded scholarship,
the deductible education expense shall be
only on account of the uncovered portion of
the education expense.
(b) Sponsored education expense

Education expense for sponsored student shall
be allowed as deduction from the total adjusted
gross income based on the following conditions
and procedures:
(i) Sponsored educational expense shall only be

admitted where it is deemed to have been
spent on a financially needy child who is a
Bhutanese.
(ii) For the purpose of Rule 36(3)(b)(i), a
financially needy child shall refer to:
(a) a child who does not have both the
parents, and inherited no properties
yielding fixed source of income or
income from any other sources;
(b) a child who is survived by a single
parent but that parent is not capable
of sponsoring the child’s educational
expenses;
(c) a child who has both the parents but the
parents are not capable of sponsoring
the child’s educational expenses.

(iii) Sponsorship of a student who is availing full
scholarship shall not qualify for educational
expense claims;
(iv) The allowable sponsorship education expense
shall be the actual expenses or Nu. 350,000
per child whichever is lower provided, that
the claim is supported by relevant documents.
(v) A duly filled Application Form IT – 10 must

be submitted by a person sponsoring children
education expense to the concerned RRCO;
(vi) The application shall be submitted to the
RRCO where taxpayer is registered; and
(vii) Application Form must be submitted latest
by 31st October of the year where children
education expense is being sponsored.
(c) If the individual availing privately financed

education is a taxpayer, then the cost of education
shall be allowed as tax deductible expenditure,
limited to the actual cost of education or Nu.
350,000, whichever is lower per individual.
Net Taxable Income
37. Net Taxable Income means the Total Adjusted Gross

Income from the following personal incomes after general
deductions:
(1) gross salary income after deductions under Rules No.
35(1)(a);

(2) rental income from real property after specific
deduction(s)/exemption under Rules No. 35(2)(a) and
35(2)(b) of this Part;
(3) dividend income from shareholdings after specific
deduction(s)/exemption under Rules No. 35(3)(a) and
35(3)(b) of this Part;
(4) income from other sources after specific deduction(s)
under Rule No. 35(4)(a) of this Part.
38. Citizens and residents shall be taxed on the Net Taxable

Income arrived from 37(1)(2)(3)(4) after general deductions
under Rule No. 36 of this Part. The tax rates and slabs
given under Rule No. 39 of this Part shall be applied on Net
Taxable Income to calculate the Tax Amount.
Tax Rates
39. The Net Taxable Income as per Rule No. 37 of this Part
shall be liable for PIT as per the rates given below:
Sl.
Net Taxable Income Tax rates
No
Where the Net Taxable Income
1 Nil
does not exceed Nu. 300,000.00
10% of the amount by which
the Net Taxable Income
exceeds Nu. 300,000.00 but does
2 exceeds Nu.
not exceed Nu.400,000.00
300,000.00
Nu. 10,000.00 plus 15% of
the amount by which the Net
exceeds Nu. 400,000.00 but does
3 Taxable Income exceeds Nu.
not exceed Nu.650,000.00
400,000.00

Nu. 47,500.00 plus 20% of
the amount by which the Net
exceeds Nu. 650,000 but does not
4 Taxable Income exceeds Nu.
exceed Nu. 1,000,000.00
650,000.00
Nu. 117,500.00 plus 25% of
Where the Net Taxable Income the amount by which the Net
exceeds Nu. 1,000,000 but does Taxable
5
not exceed Nu. 1,500,000.00 Income exceeds Nu.
1,000,000.00
Nu. 242,499.00 plus 30% of
Where the total net taxable income the amount by which the total
6
exceeds Nu. 1,500,000.00 net taxable come exceeds Nu.
1,500,000.00
Surcharge
40. Surcharge at the rate of 10% shall be levied on Personal

Income Tax, if the annual Personal Income Tax is equal to
or more than Nu. 1,000,000. For the purpose of this Rule,
Surcharge shall refer to an additional tax levied over and
above the applicable tax amount, and it shall be levied at a
flat rate of 10 percent on the total PIT assessed. However, at
the time of filing, a provisional surcharge may be accepted
on the self-declared PIT amount.
Set Off and Carry Forward
41. The set off and carry forward shall be as per the Rules
prescribed below:
(1) Adjustment of TDS and Taxes Paid Quarterly

TDS and tax paid quarterly for the purpose of PIT shall
be adjusted as follows:

(a) TDS and tax paid quarterly from salary income,
rental income, dividend income, and income
from other sources shall be adjusted against the
Tax Amount at the time of filing for a citizen
and a resident as per Rule No. 60 of the General
Provisions;
(b) for a person other than a citizen or a resident, TDS
and taxes paid quarterly shall be treated as final
PIT and such persons shall not be required to file
income tax return.
(2) Set Off

Set off and adjustment of personal income for the
computation of Net Taxable Income shall be as
follows:
(a) deficit from one income may be adjusted against
another income provided the incomes are from the
same source. Example: deficit from rental income
of one property may be adjusted against the rental
income from another house;
(b) deficit from one source shall not be adjusted
against the income from another source. Example:
Deficit from rental income will not be allowed to
be adjusted against the income from salary or any
other source.
Deficit means specific deductions/exemption exceeding

the Gross Income.

(3) Carry Forward of Losses
Carry forward of loss or deficit from one income year
to another or adjustment against the income of the
subsequent year shall not be allowed under PIT.

PART IV
TAXES ON LOTTERY WINNING
Tax liability
42. All citizens shall be liable to pay income tax on the lottery
winnings.
43. Any person whether resident or not shall pay income tax on
the lottery winnings.
Income liable to tax
44. Any lottery winning be it in money or money’s worth that

is equivalent to sum of Nu. 5000 or more, shall be liable for
income tax.
45. For the purpose of this taxation it shall be the winnings on
a single ticket.
46. The lottery ticket shall include all forms, either printed or
digital.
Tax rate
47. Lottery tax shall be levied at a flat rate of 20% on the total
winnings.
48. Tax deducted at source shall be treated as final and a
separated tax return shall not be filed.

Responsibility to collect and deposit tax
49. Authorized lottery operating entities and their agents shall

be liable to deduct the applicable taxes at source at the
time of awarding the winning prize.
50. The tax shall be deposited with the RRCO on or before
10th of the month following the date of deduction as per the
Form IT-8.

GENERAL PROVISIONS
The Rules under this Part shall apply to Corporate Income Tax,
Business Income Tax and Personal Income Tax.
Assessment
51. An assessment means all proceedings starting with the filing

of return or issue of notice and ending with determination
of tax payable by an assessee. The Department shall be
responsible for assessment of taxes.
52. The Department may make an assessment at any time

subject to section 4, Chapter 2 of the General provisions of
the Income Tax Act of the Kingdom of Bhutan 2001. The
department may carry out the assessment in one or more
of the following ways. However, if the self-assessed tax
is found reasonable, the department may accept such tax
amount as the final tax liability.
(1) Advance Assessment

An Advance assessment means an assessment carried
out by the Department in advance of the normal due
date of filing a tax return.
An advance assessment maybe carried out in an

Income Year;
(a) where a taxpayer ceases to carry on business; or
(b) where a taxpayer ceases to earn income from
sources in Bhutan; or

(c) where a department has reason to believe that any
taxpayer is about to leave Bhutan; or
(d) where a taxpayer has been declared bankrupt by a
court; or
(e) where a taxpayer dies; or
(f) where a department has any other reasons to believe
that an advance assessment be made in respect of
a taxpayer.
(2) Desk Assessment

Desk Assessment means a preliminary checking of
self-assessed tax return without visiting the business
premises. Where a taxpayer has submitted a return
and the department has accepted the return, the desk
assessment may be carried out.
(3) Field Assessment

Field Assessment refers to an assessment carried out
within the business premises.
The field assessment may be carried out where:

(a) a desk or advance assessments suggest missing or
inadequate documentation; or
(b) the business has claimed refund of taxes; or
(c) the business has declared loss; or
(d) the department has any other reasons to believe
that the field assessment needs to be carried out.

(4) Estimated Assessment
Estimated assessment means an assessment where the
department determines the tax liability of the assessee
based on the best of judgment.
The estimated assessment may be carried out where:
(a) tax return has not been submitted within the
prescribed time limit and no time extension
request has been made and approved; or
(b) a business or company has failed to keep proper
accounting records as required under Rule No. 62
of this Part; or
(c) a tax return has been rejected; or
(d) the taxpayer has failed to comply to the notices
issued by the department; or
(e) the department has any other reasons to believe
that the estimated assessment need to be carried
out.
The department shall carry out an estimated assessment

based on one or more of the following:
(i) tax returns filed or taxes paid in the previous years
plus an appropriate increase;
(ii) import and export figure available with the
department;
(iii) bank statement information;
(iv) information from third party:
(v) taxes paid by the similar units:
(vi) sales and purchase records:
(vii) TDS records; and
(viii) any other information available on the taxpayer.

(5) Reassessment
Reassessment means an assessment conducted again
on the same taxpayer owing to one or more of the
following grounds:
(a) upon request from a taxpayer as a part of the
appeal procedure; or
(b) where an appeal case cannot be concluded without
further investigation and the appeal committee
has directed for re-assessment; or
(c) where there are reasonable grounds to believe
that some income or expenses may have escaped
assessment; or
(d) the department has any other reasons to believe
that the re-assessment need to be carried out.
Re-assessment may take place at any time within 5

years from the end of the Income Year. However, in
the case of tax fraud, re-assessment may take place
without any time limit.
Notice of Assessment
53. Where an assessment is required, the department shall

inform the taxpayer in writing at least 2 weeks before the
commencement of such assessment stating the type of
assessment, time and place of assessment.
54. If the taxpayer is not able to make arrangements for the

assessment on the dates mentioned in the notice due to
unavoidable circumstances beyond the control of the

taxpayer, the taxpayer must make a written request to the
concerned RRCO at least 1 week before the assessment
schedule date.
Demand Notice
55. The Department shall upon completion of assessment,

serve a demand notice in the Form IT-11 along with the
assessment report to the taxpayer comprising one or more
of the following:
(1) additional tax payable/refundable; or
(2) penal interest, fines and penalties payable; or
(3) statutory liabilities such as Tax Deducted at Source,
Health Contribution payable; or
(4) where any other sum is payable, the amount of the sum
so payable.
56. Where no taxes and penalties are payable, a notice to that

effect shall be issued along with the assessment report.
Transfer and Closure of Business
57. The transfer and closure of business shall be as per the

Rules prescribed below:
(1) Winding up of company

A company shall wind up in accordance with the
provisions under the Companies Act of the Kingdom
of Bhutan, 2000.

(2) Transfer and Closure of Business
Liability to tax as a result of transfer or closure of a
business shall be as follows:
(a) Change of Business Ownership

Both the previous owner and the new owner shall
report change of ownership of a business in writing
to the concerned RRCO. License shall also be
transferred through the Authorised Government
agency on submission of Tax Clearance Certificate
for companies and for businesses issued by the
RRCO.
Where the change of ownership has not been

reported, the new owner shall be responsible for
settlement of all outstanding tax liabilities.
(b) Business Closure

When closing a business unit, the following
procedures must be adhered to:
(i) the taxpayer must notify the RRCO at least 2
months before the date of closure;
(ii) the taxpayer shall submit the final accounts till
date and make provisions for the remaining 2
months;
(iii) the taxpayer (companies and businesses)
shall obtain a Tax Clearance Certificate from
the concerned RRCO.

Where the above provisions have not been adhered
to, the outstanding taxes shall be borne by:
(a) the company, in case of incorporated
business;
(b) the license holder, in the case of unincorporated
businesses.
Exemption from Tax
58. A religious institution or organisation, charitable institution,

trust body, trust fund or a body of persons shall be exempt
from PIT/ BIT/ CIT provided the following conditions are
fulfilled.
Such organisations are approved by the government and

established in the Kingdom of Bhutan:
(1) is not operated or conducted for profit;
(2) is established exclusively for religious worship or
advancement of religion or for charitable purposes and
or is in the interest of the general public;
(3) management and control is done through a board
consisting of minimum three members; and
(4) proper books of accounts are maintained and filed.
To avail of tax exemptions, such organisations are required

to be registered with the Department and shall furnish any
relevant information to the tax authorities or any other
authorised agency of the Government on written request.

Double taxation relief
59. Relief from double taxation shall be accorded in accordance

with double taxation avoidance agreements entered into
and the provisions laid down under;
(1) In order to be eligible for relief from double taxation,

the following conditions should be fulfilled:
(a) a double taxation Avoidance Agreement should
exist between Bhutan and the foreign country
where tax has been withheld or levied;
(b) the person claiming the relief should have been
a tax resident of Bhutan for the relevant income
year;
(c) tax has been paid or is payable on the same income
in the foreign jurisdiction; and
(d) the income is subject to taxation in Bhutan.
(2) If a resident person derives taxable foreign source

income in respect of which the person has paid foreign
income tax, the person shall be allowed a foreign tax
credit of an amount, equal to the lesser of:
(a) a foreign income tax paid; or
(b) income tax payable under the Income Tax Act in
respect of the taxable foreign s ource income.
(3) For the purposes of Rule 57(2)(b)of these Rules,

income tax payable under this Rule in respect of taxable
foreignsource income derived by a resident person in
an income year is computed by applying the average

rate of Bhutanese income tax applicable to the person
for the year, against the net foreignsource income of
the person for the year.
(4) For Part I (CIT) & Part II (BIT) taxpayers, the foreign
tax credit for each category of foreign source income
shall be calculated separately for an income year.
(5) When Rule 57(2) applies, deductions are apportioned

for the purposes of paragraph (ii) of the definition of
“net foreign source income” in Rule 59(7)(c) on the
basis that the business income that is foreign source
income and the other foreignsource income are
separate classes of income.
(6) If a foreign tax credit allowed to a resident person for

an income year exceeds the tax payable by the person
for that year, the excess of the amount shall neither
be refunded nor be carried forward to the next income
year.
(7) Under these Rules on double taxation relief:

(a) average rate of Bhutanese Income Tax, in relation
to a resident person for an income year means the
percentage of the Bhutanese Income Tax payable
by the person for the year, before the allowance of
any tax credit under this Rule.
(b) foreign income tax means income tax, including
withholding tax on income, imposed by the
Government of a foreign country, but does not

include penalty or interest payable in respect of
such tax.
(c) net foreign source income, in relation to a resident
person for an income year means the total taxable
foreign source income of the person for the year,
as reduced by:
(i) any deductions to the person under this
Rule for the year that relate exclusively to
the derivation of the taxable foreign source
income; and
(ii) any other deductions allowed to the
person under this Rule for the year that are
reasonably apportioned to the derivation of
taxable foreign source income.
Collection and Payment of Taxes
60. The collection and payment of taxes shall be as per the

Rules prescribed below:
(1) Collection Authority

The Department of Revenue and Customs through its
Regional Revenue & Customs Office and withholding
agencies shall be responsible for the collection of taxes
as per the provisions given under this Rule.
(2) Payment of Tax

Taxpayers shall pay taxes to the RRCO in one or more
of the following ways as mentioned below:

(a) Taxes paid during the income year
(i) Advance Taxes
All companies and large and medium
businesses shall pay advance tax as follows:
Due date Advance Tax amount

31st August 25% CIT (Companies other than State Enterprise)
& 30% BIT/CIT (Businesses & State Enterprise
Companies) based on half yearly Profit and Loss
account, or where half yearly accounts cannot be
submitted on reasonable grounds, 50% of the BIT/
CIT paid in the previous year
Late filing of half yearly accounts and late

payments of Advance Tax shall attract fines
and penalties as provided under Chapter 5 of
the General Provisions of Income Tax Act of
the Kingdom of Bhutan 2001 and Rule 63 of
the General Provisions.
(ii) Tax Paid on Quarterly basis

Individuals employed by an employer not
liable to deduct tax at source shall pay tax
in 4 equal instalments during the income
year by computing their annual tax liability
and dividing it into 4 instalments. The tax
must be deposited with the RRCO where the
individual is registered as a taxpayer on 31st
March, 30th June, 30th September and 31st
December of the income year.

(b) Tax Deducted at Source (TDS)
TDS is a preliminary estimate of a person’s annual
tax liability and shall be adjusted against the final
tax at the time of filing the annual tax return unless
otherwise specified. The withholding agencies are
responsible for deducting and depositing TDS as
below:
Sl.
Withholding Agency Sources
No.
Salary
1 Employer
[refer 60(2)(b)(i)]
Government, Semi government & Non
Rental Income
2 government organisations, Companies and
[refer 60(2)(b)(ii)]
Businesses
Dividend
3 Companies
[refer 60(2)(b)(iii)]
Interest
4 Financial Institutions
[refer 60(2)(b)(iv)]
Tour Income
5 Department of Tourism
[refer 60(2)(b)(v)]
Contract income
6 Contract Awarder
[refer 60(2)(b)(vi)]
Government, Semi government & Non
Other Income
7 government organisations, Companies, and
[refer 60(2)(b)(vii)]
Businesses
lottery Winnings
8 Lottery Operating Entities/Agents
[refer 60(2)(b)(viii)]
(i) Salary Income

Salary income includes fees paid to non -
licensed freelance consultants. The employer
shall deduct tax at source (TDS) on salary

income at the time of disbursement as per
schedule prescribed in Annexure III.
The amount so deducted shall be deposited

online or to the concerned RRCO on or
before the 10th of the month following the
date of deduction as per FORM IT-1.
The tax deducted at source shall be adjusted

against the person’s tax liability, therefore the
employer must:
(a) maintain proper accounting records;
(b) submit monthly and yearly information
to the RRCO where the employer is
registered as a taxpayer as per FORM
IT-1;
(c) ensure that the retirement benefits are
paid only on submission of Tax Clearance
Certificates issued by a RRCO.
For persons other than a citizen or a resident,
the TDS is final and return shall not be filed.
(ii) Rental Income

A corporate or business entity or a
government, semigovernment, non
government organisation hiring real property
as defined under Rule No. 35(2) of Part III,
of these Rules shall at the time of payment
deduct tax at source (TDS) at the rate of 5%
of the gross rental payment.


against the person’s final tax liability;
therefore, all withholding agencies must
maintain proper accounting records.
(iii) Dividend Income

A company paying dividend to its
shareholders shall at the time of payment
deduct tax on dividend income at source as
per rates prescribed below:
Dividend Nu. 30,000 or

No Deductions
below
Citizens and residents Dividend Nu. 30,001 & 10% of the Total
above Dividend Income
Persons other than 10% on the Total Dividend Income as final tax,
citizens and residents and return shall not be filed.
CIT & BIT units 10% on the Total Dividend Income


against the person’s final tax liability,

therefore, the company must:
(b) submit yearly accounts before December
31st to the RRCO as per FORM IT-3.
(iv) Interest Income

A financial institution paying interest to its
clients shall deduct tax on interest income
at source at the time the interest is paid or
credited to the client’s account as per rates
prescribed below:
Foreign Companies & Branches 5% of the total interest income

CIT & BIT units 5% on the Total Interest Income


against the final tax liability of companies
and businesses under the purview of Full Tax
Liability, therefore, the financial institutions
must:
(b) submit yearly accounts before December
31st to the RRCO as per FORM IT-4.

(v) TDS from National Tour Operators
The Tourism Council of Bhutan (TCB) shall
deduct tax at source at the rate of 2% of the
Tour Income.

date of deduction as per FORM IT-5 with a
copy to the tour operator.
The tax deducted at source will be adjusted

against the tour operator’s final tax liability,
therefore, the tour operators must maintain
proper accounting records.
(vi) Contractors
Tax shall be deducted at source by a contract
awarder in the manner prescribed below:
(a) Contractors under Full Tax Liability
Tax shall be deducted from contractors
under full tax liability for carrying
out any construction, logging work,
transportation, management contracts,
consultancy including other professional
services and supplies.
The contract awarder shall:

(i) deduct contractor’s tax at source at
the rate of 2% of the gross amount

on the day of payment. The amount
so deducted shall be adjusted
against the contractor’s final tax
liability;
(ii) TDS must be deposited online or to
the concerned RRCO on or before
10th of the month following the date
of deduction as per FORM IT -6
with a copy to the contractor.
(b) Contractors under Limited Tax

Liability
Tax shall be deducted from contractors
under limited tax liability for carrying out
any construction, logging, transportation
and management works including other
services.
The contract awarder shall:

(i) deduct contractor’s tax at source at
the rate of 3% of the gross amount
on the day of payment and it shall
be treated as final;
(ii) TDS must be deposited online or to
the concerned RRCO on or before
10th of the month following the
date of deduction as per FORM IT-
6 with a copy to the contractor.

(c) Where a contractor carries out work in
package involving both supplies and
services, the Tax Deducted at Source
(TDS) is applicable on the entire contract
amount.
(vii) Other Income

A corporate or business entity or a
government, semi -government, non
government organisation hiring vehicles,
plant, machinery or paying for the use of
intellectual property from an individual or
another tax entity shall at the time of payment
deduct tax at source at the rate of 5% of the
gross payment.

date of deduction as per FORM IT-7

against the person’s final tax liability,
therefore, all withholding agencies must
maintain proper accounting records.
(viii) Lottery Winnings

Any lottery winning be it in money or
money’s worth that is equivalent to sum of

Nu. 5000 or more, shall be liable for income
tax. Authorised lottery operating entities and
their agents shall deduct tax at source at a
flat rate of 20% at the time of awarding the
winning prize.

date of deduction as per FORM IT-8
Failure to comply with Rule 60(2)(b)(i)(ii)(iii)(iv)

(v)(vi)(vii) shall result in fines and penalties as per
Chapter 5 of General Provisions of the Income Tax Act
of the Kingdom of Bhutan, 2001 and the Rule 63 of the
General Provisions.
(c) Tax Paid when Filing Annual Tax Return

Companies and businesses shall file their annual
tax returns latest by March 31st and individuals
before March 1st in the year following the income
year.
Advance tax, tax paid on a quarterly basis and

TDS shall be adjusted provided accounts have
been submitted (CIT/BIT taxpayers) and TDS
deduction certificates produced (CIT/BIT/PIT
taxpayers) in the following manner:
(i) advance tax shall be adjusted at the time of
filing of tax return against provisional tax

payable provided accounts are submitted;
(ii) taxes paid on a quarterly basis shall be
adjusted at the time of filing of tax return
provided proof of payment is produced;
(iii) TDS shall be adjusted:
(a) at the time of advance tax payment;
(b) at the time of provisional tax payment;
(c) at the time of final tax payment.
Information, Control and Documentation
61. All registered companies and business units shall maintain

proper accounting records. The following rules are intended
to provide a guideline as to what constitutes ‘proper
accounting records’ for different categories of CIT/BIT
taxpayers.
62. The specific book of accounts to be maintained by a taxpayer

depends on the category of unit to which the taxpayer
belongs. The categorisation of companies and business shall
be in accordance with the categorization given in Annexure I.
(1) Companies, Large and Medium Business units

All companies, large and medium business units
regardless of their size must maintain the following
books of account and associated records:
(a) Trial Balance;
(b) Manufacturing & Trading Accounts;
(c) Profit & Loss Accounts;
(d) Balance Sheet;

(e) General/Nominal Ledger;
(f) Cash Book, Bank Statements, and Bank
Reconciliation Statements;
(g) Sales Ledger, Registers and Supporting bills,
Cash Memos and Receipts;
(h) Purchase Ledger, Registers and Supporting Bills,
Receipts and Vouchers;
(i) Journal Book;
(j) Fixed Asset Register;
(k) Stock Register.
Notwithstanding this rule, all companies and business

units, large and medium business supplying good or
services to other businesses shall submit information
to the RRCOs on the quarterly period. The information
shall contain all credit and cash sales.
Failure to submit the information shall attract fines and

penalties as per Section 32, Chapter 5 of the General
Provisions of the Income Tax Act of the Kingdom of
Bhutan 2001 and Rule 63 of the General Provisions.
(2) Small, Cottage/Micro Business Units

Small businesses must maintain basic accounting
records to ensure that all transactions are recorded.
Therefore, for such businesses records such as
cashbook, a daily list of sales summarised monthly
& annually, cash memos, purchase invoice and bank
statements may be maintained. However, where these
records are not available, annual tax assessment shall

be done on as per Rule No. 52(4) of the General
Provisions.
(3) Information from Third Parties

All public and private entities and individuals, on
written request by a Regional Director or the Head of
the Department, shall furnish any relevant information
on a taxpayer. The request for information shall be
made when a RRCO requires the information to
determine tax liability of a taxpayer.
Fines and Penalties
63. The following fines and penalties shall be applicable:
(1) Late filing of tax return

A fine equal to Nu.100 per day up to a maximum
period of 3 months shall be imposed from the due date
till the date of filing. Where a time extension has been
obtained for filing of tax return, a due date shall be
the extended date. However, if the time extension is
defaulted, penal interest shall be applicable from the
due date of filing.
(2) Late Payment of Tax

A penal interest at the rate of 24 per cent per annum on
the amount of tax due in addition to tax in arrears shall
be imposed after the due date of filing of tax return till
the date of payment.

(3) Non filing of tax return
Non filing shall refer to a tax return not filed within
three months from the due date. Where a time extension
has been obtained for filing a tax return, a due date
shall be the extended date.
A fine equal to three times the assessed tax amount shall

be imposed for non-filing. However, where there is no
tax liability due to non-operation or due to business
running in a loss, a fine of Nu.30,000 shall be imposed.
(4) Failure to maintain books of accounts and

documents
A fine ranging from Nu.1000 to Nu.100,000 shall be
imposed for failure to maintain books of accounts and
documents, or furnish information as required under
the Income Tax Act and the Rules. The fine amount
shall be based upon the size of the business and the
degree of non-compliance committed.
(5) Failure to comply with a notice

A fine ranging from Nu.500 to Nu.5000 shall be
levied for failure to comply with a notice issued by
the Department. The Department may issue notices
requiring the business or individual to produce books
of accounts, any documents, or serve demand notice.
The fine shall apply for each default committed.
(6) Withholding agents

Withholding agents responsible for deduction and
remittance of tax shall be liable for penalties as follows:

(a) failure to deduct tax at source as required under
the Income Tax Act shall attract penal interest
at 24 per cent per annum on the amount due in
addition to the applicable TDS amount. The penal
interest shall be computed from the due date till
the date of payment;
(b) failure to deposit the tax deducted at source shall

attract penal interest at 24 per cent per annum
from the due date till date of payment in addition
to the TDS amount.
Recovery Measures
64. The following recovery measures shall be used when a

company, business or person:
(a) has not paid tax within the due date; or
(b) has not deducted tax at source within due date; or
(c) has not paid fines and penalties.
(1) Agreement
The RRCO shall enter into an agreement with a
taxpayer for recovery of tax dues and claims including
penal interest. The agreement shall specify dues,
terms of payments, mode of payment etc. The penal
interest on outstanding tax shall be calculated till the
date of first installment. However, if any installment
is defaulted, penal interest shall be applicable from the
date of first installment.

Prior approval of the DRCHQ is required if the payback
period is longer than 12 months.
(2) Restraint on Asset
Where a taxpayer defaults the payment of tax dues as per
the agreement under Rule No. 64(1), the RRCO shall
put a restraint on the taxpayer’s property, or income
from the taxpayer’s property covering sufficiently the
amount of outstanding tax/claims as mentioned below:
(a) issue a restraint order as per FORM IT-9 to the
taxpayer stating clearly the grounds for restraint;
(b) notify the general public and the concerned
authorities of the property being restrained and
the right to subsequent claims where third parties
have prior claims to the property/income;
(c) register details of the property/assets/income
restrained in the Restraint Book.
(d) enter into further agreement stipulating faster
recovery of dues.
If a taxpayer settles tax dues, the RRCO shall inform

the taxpayer stating clearly that his/her dues have
been cleared and the restraint order shall be annulled
thereafter.
(3) Executing Bond

Notwithstanding Rule No. 64(2), the RRCO may
execute a bond or security issued by another person or
entity in cases where:
(a) the taxpayer’s liquidity is poor; or
(b) the taxpayer does not own sufficient assets or

other security to cover the tax dues; or
(c) the tax due is high compared to income from his
business; or
(d) the tax authority has reason to believe that the
taxpayer may leave the country;
(e) if the bond or security is redeemed, the RRCO
shall adjust the tax dues/outstanding and refund
the excess amount, if any.
(4) Detention of Assets

Assets restrained under Rule No. 64(2) may be
detained if a taxpayer fails or has failed to settle his/
her tax dues as per conditions set out thereto. Once
detained, the assets may be auctioned and disposed off
by the RRCO:
(a) after obtaining prior approval from head of the
Department;
(b) after fixing the reserved value of asset to be
disposed of;
(c) by an Auction Committee comprising at least two
officers from the RRCO, and two representatives
from the concerned Dzongkhag;
(d) under the chairmanship of the Regional Director;
and
(e) by notifying at least two weeks before the date of
auction by the RRCO.
(5) Adjustment of Auction Proceeds against Tax Dues

The proceeds from the auction shall be adjusted against
the duties and taxes due, interest and fines as well as

costs of detaining the assets and the auction thereof.
The RRCO shall inform the taxpayer of the adjustment
in writing and refund the excess amount, if any, to the
taxpayer.
(6) Suspension and Cancellation of Business License

Notwithstanding Rules No. 64(1)(2)(3)(4)(5), the
Department through the Ministry of Finance shall
recommend to the concerned authority for cancellation
of a taxpayer’s licence.
Tax Clearance Certificate
65. A Tax Clearance Certificate for companies, for business

units and for individuals must be obtained from a RRCO
where they are registered as a taxpayer in the following
cases:
(1) before leaving the country for 6 months or more;
(2) at the time of obtaining and renewal of licence or
bidding for any works and service contracts;
(3) at the time of transfer of ownership or location of
business; or
(4) at the time of closing of a business;
(5) at the time of issuance/ renewal of occupancy
certificates.
Issue of Tax Clearance Certificate
66. A Tax Clearance Certificate shall be issued provided:

(1) there are no outstanding taxes due to the government;
or
(2) a person/entity does not have taxable income.
FORM CIT-1
CIT REGISTRATION

REGIONAL REVENUE & CUSTOMS OFFICE
Date:
1. DETAILS OF COMPANY
a) Name of Company: _________________________
b) Registered Address of Company:_______________
Dzongkhag ___________ Town/City ___________
Street Name: _______________________________
Post Box No.: ___________ Phone No.: _________
Fax No.: __________ Email address: ____________
2. TYPE OF OWNERSHIP (please tick)

a) Private Company ‪
b) Government Company ‪
c) Listed Company ‪
d) Foreign Company ‪
3. LICENSE DETAILS AND ACTIVITIES
Sl. No License No. Date of Issue Nature of Activity
If required, please use additional sheet.
4. COMPANY REGISTRATION DETAILS

a) Registration No:
b) Date of Registration:
5. NO. OF REGULAR EMPLOYEES (including those at

branch units) Number:

6. ADDRESS OF BRANCH
Sl. Name of the Post Box Phone Fax

Town/City
No unit No No No.
1
2
3
4
5
Note: Any change in the above information must be informed to

the RRCO of registration within one month of the change.
I hereby declare that the above information is true and correct to

the best of my knowledge.
Signature of the Chief Executive Officer:
Name of the Chief Executive Officer:
Documents Attached:
i. Certificate of Incorporation
ii. License Copies
iii. Name and address of Board of Directors
FOR OFFICIAL USE ONLY
You are hereby allocated a Tax Payer Number (TPN) _________

by the Regional Revenue Customs Office ______ on _____ day
month _____ year.
You are requested to use your TPN in all your correspondences

with us. Yours faithfully,
Name & Signature of the Issuing Authority
FORM CIT-2
ANNUAL INCOME TAX RETURNS
ANNUAL CORPORATE INCOME TAX RETURNS FOR THE

INCOME YEAR _________
From: Name of MD:________________________________

Name of Company:____________________________
License Nos.: ________________________________
TPN: ______________________________________
Date: ______________________________________
To: The Regional Director,

Regional Revenue & Customs Office,
______________________________
Please find attached the following documents relating to

Corporate Income Tax for the Income Year ______.
 Self Assessment sheet (Adjustment of taxable Profit/Loss)

inline with the Income Tax Act & Rules
 Statutory Audit Report/ Provisional Financial Statements
 Money Receipts for Advance Taxes already paid or CIT
withheld at source.
 Cash/Cheque No dated for Nu. (figures) (words)only in
payment of SelfDeclared Corporate Income Tax .
We, hereby declare that the records submitted herewith are true
and meet the obligations as required under the Income Tax Act
& Rules. Any additional taxes arising as a result of the records
being otherwise or as a result of shortcomings in meeting the
obligations as required under the Income Tax Act & Rules shall
be paid along with the penalties as provided in the Income Tax
Act.
Affix Affix
Legal Legal
Stamp Stamp
Signature: Signature:
Name of Chief Executive Officer: Name of Finance Manager:
Date: Date:
FORM BIT-1
BIT REGISTRATION

1. DETAILS OF BUSINESS
a) Name of the Business
b) Type of Business ‪ Trading Service ‪ Manufacturing ‪
c) Investment Range
Nu. 100 million and above ‪
Nu. 10 million to Nu. 100 million ‪
Less than Nu. 1 million ‪
d) Registered Address of the Business: ________________

Street Name __________ Post Box No.______________
Dzongkhag _________ Gewog _______ Village________
Phone No. _______________ Fax No._____________
Email address _________________________________
2. TYPE OF OWNERSHIP (please tick)

Sole Proprietorship ‪
Partnership ‪
3. OWNERSHIP DETAILS
Sl. No Name Citizenship ID No TPN No Telephone No
Name ______________Sex _____Date of Birth/Year__________
Citizen ID Card No/Resident Permit No. __________ Nationality

_________________
Street Name ________ Post Box No. _______ Fax No.______
Village _________ Gewog _________ Dzongkhag __________
If a business has more than one owner, same details should be

filled in a separate sheet.
4. DATE OF BUSINESS ESTABLISHMENT

Date ____________ Month __________ Year_________
5. LICENSE DETAILS AND ACTIVITIES

Sl. No License No Date of Issue Nature of Activity
6. OTHER BUSINESSESS OWNED BY THE OWNER

Sl. No TPN Name of the Business License No Address Phone No

Note: Any change in the above information must be informed to
the RRCO of registration within one month of the change.
I hereby declare that the above information is true and correct to

the best of my knowledge.
Signature of the Owner:____________________

Name of the Owner:_______________________
FOR OFFICIAL USE ONLY
You are hereby allocated a Tax Payer Number (TPN) _________

by the Regional Revenue Customs Office ____________on ___
day _____ month ______ year.
You are requested to use your TPN in all your correspondences

with us.
Yours faithfully,
Name & Signature of the Issuing Authority
FORM BIT-2
ANNUAL BUSINESS INCOME TAX RETURN
ANNUAL BUSINESS INCOME TAX RETURN FOR THE

YEAR _______
From: Name of Proprietor: _________________________

Name of Business: _________________________

License Nos. _________________________
TPN/Entity Code No. _________________________
Date _________________________
To: The Regional Director

Regional Revenue & Customs Office
Please find attached the following documents relating to Business

Income Tax for the Tax Year ________:
 Annual Accounts in Standard Format.

 Money Receipts for Advance Taxes already paid or BIT
withheld at source.
 Cash/Cheque No. _____________ dated __________ for
Nu.(figures) ________ (words) ________________________
only in payment of SelfDeclared Business Income Tax.
We, hereby declare that the records submitted herewith are true
and meet the obligations as required under the Income Tax Act
& Rules. Any additional taxes arising as a result of the records
being otherwise or as a result of shortcomings in meeting the
obligations as required under the Income Tax Act & Rules shall
be paid along with the penalties as provided in the Income Tax
Act.
Affix
Affix
Legal
Legal
Stamp
Stamp
Signature: Signature:
Name of License Holder: Name of Accountant/Finance
Manager:
Date: Date:
FORM BIT- 2
BIT STANDARD ACCOUNTS FORMAT
In the format shown below, dd/mm/20vv represents the day/

month/year of the end of the current accounting period; 19vu
represents the end of the previous accounting period (of the
same duration); XXXX are current year values; YYYY are prior
year values.
Profit & Loss Account for the year ended dd/mm/20vv
Schedule 20vv 20vu

Nu’000 Nu’000
Total Sales 1 XXXX YYYY

TOTAL INCOME XXXX YYYY
Less: Direct Expenses 3 XXXX YYYY

GROSS PROFIT XXXX YYYY
Other Income 2 XXXX YYYY
Less: Selling Expenses 4 XXXX YYYY

Less: Administration Expenses 5 XXXX YYYY
Less: Depreciation for year 14 XXXX YYYY
Less: Other Financial Expenses 6 XXXX YYYY
Less: Interest Paid XXXX YYYY

NET PROFIT FOR THE YEAR (#) XXXX YYYY
Add: Inadmissible expenses for tax purposes
Direct 7 XXXX YYYY
Selling 8 XXXX YYYY
Administration 9 XXXX YYYY
Financial Expenses 10 XXXX YYYY
Appropriations 11 XXXX YYYY
INITIAL SELF ASSESSED PROFIT FOR YEAR (A) XXXX YYYY

Add
Bonus Limit @ 10% = Amount Disallowed 12 XXXX YYYY
Ent/Staff Welfare Limit @ 2% =Amount Disallowed 13 XXXX YYYY
SELF ASSESSED TAXABLE PROFIT XXXX YYYY

Less tax allowed losses carried forward (XXXX) (YYYY)
FINAL SELF ASSESSED TAXABLE PROFIT (B) XXXX YYYY
SELFDECLARED BIT/BIT @ 30% of B (*) XXXX YYYY
Less Amounts Already Paid:
Advance Taxes (XXXX) (YYYY)
BIT Withheld at Source (XXXX) (YYYY)
............ ............
BALANCE BIT PAYABLE XXXX YYYY
===== ====
Please note that a tax allowed loss could only be carried over
for a maximum of three years and then it becomes invalid. An
account showing how much loss and to which year the loss
relates to needs to be kept.
I/We declare that the information in this document and any
attachments is true and correct to the best of my (our) knowledge
and belief. Late submission, misleading or false information
shall result in fines and penalties as per the Income Tax Act of
the Kingdom of Bhutan, 2001 and rules thereto.
Name and Signature of owner or authorized signatory and Date
Name and Signature of Accountant who prepared the accounts

and Date.
Balance Sheet as at dd/mm/20vv
20vv 20vu
Schedule
Nu’000 Nu’000
Fixed Assets 14 XXXX YYYY
Current Assets XXXX YYYY

15

TOTAL ASSETS XXXX YYYY
Less: Current Liabilities
XXXX YYYY
16
TOTAL ASSETS LESS CURRENT
XXXX YYYY
LIABILITIES
=== ===
Financed By:
Long Term Capital 17 XXXX XXXX YYYY YYYY
Retained Profit brought forward Net
Profit for year (#) XXXX YYYY
Less/BIT (*) (XXXX) (YYYY)
Plus (minus) any transfers in or (out) XXXX YYYY
Retained Profit carried forward XXXX YYYY
Long Term Liability 18 XXXX YYYY
........... ...........
TOTAL CAPITAL XXXX YYYY
==== ====

I/We declare that the information in this document and any
attachments is true and correct to the best of my (our) knowledge
and belief. Late submission, misleading or false information
shall result in fines and penalties as per the Income Tax Act of
the Kingdom of Bhutan, 2001 and rules thereto.
Name and Signature of owner or authorized signatory

Date:
Name and Signature of Accountant who prepared the accounts

Date:
Schedule 1: Total Sales

20vv 20vu
Nu’000 Nu’000
Sales Cash XXXX YYYY
Sales Credit XXXX YYYY
............................... XXXX YYYY
TOTAL SALES XXXX YYYY
Schedule 2: Other Income
20vv 20vu
Interest Income: Nu’000 Nu’000
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Interest XXXX YYYY
Rent Income:
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Rent XXXX YYYY
Other Income:
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Other XXXX YYYY

XXXX YYYY
TOTAL OTHER INCOME ==== ===
Schedule 3: Direct Expenses
Direct expenses are those expenses, which can be directly

related to the production and or purchase of goods for the main
line of business of an organization). Listed below are the some
common expenses, which fall under this head. Please remember
that this is not an exhaustive list.
20vv 20vu
Nu’000 Nu’000
XXXX YYYY
Opening Stock Less: Closing Stock
Stock Movement (XXXX) (YYYY)
XXXX YYYY
Opening Work in Progress
XXXX YYYY
Less: Closing Work in progress (XXXX) (YYYY)
Work in Progress Movement XXXX YYYY
Direct Purchases: Raw Materials XXXX YYYY
Components
XXXX XXXX YYYY YYYY
...............................
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Purchases XXXX YYYY
Direct Staff Costs:

Permanent Salary Costs XXXX YYYY
Wages XXXX YYYY
Labor Charges XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Staff Costs XXXX YYYY
Other Direct Expenses:

Loading & Unloading XXXX YYYY
Carriage Inward XXXX YYYY
Bhutan Sales Tax XXXX YYYY
Customs Duties XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY

TOTAL DIRECT EXPENSES XXXX YYYY
=== ===
Schedule 4: Selling Expenses
(Selling expenses are those expenses incurred while trying to

sell or promote a product). Listed below are the some common
expenses, which fall under this head. Please remember that this
is not an exhaustive list.
20vv 20vu
Nu’000 Nu’000
Selling Staff Costs: Permanent Salary
Costs XXXX YYYY
Wages XXXX YYYY
Labor Charges
XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY

............................... XXXX YYYY
............................... XXXX YYYY
Other Selling Expenses:

Travel expenses for selling the product XXXX YYYY
Entertaining
Distribution costs (Transport & XXXX XXXX YYYY YYYY
Freight)
Publicity
XXXX YYYY
Commissions XXXX YYYY
.................. XXXX YYYY
................. XXXX YYYY
................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY

............................... XXXX YYYY

TOTAL SELLING EXPENSES XXXX YYYY
==== ====
Schedule 5: Administration Expenses
(Administration expenses are those expenses incurred while

trying to run or administer a business). Listed below are the
some common expenses, which fall under this head. Please
remember that this is not an exhaustive list.
20vv 20vu
Nu’000 Nu’000
Administration Staff Costs: Permanent
Salary Costs XXXX YYYY
Wages XXXX YYYY
Labor Charges XXXX YYYY
Staff Welfare XXXX YYYY
Provident/Gratuity Fund XXXX YYYY
Bonus XXXX YYYY
……………………… XXXX YYYY
……………………. XXXX YYYY
Other Administration Expenses: XXXX YYYY

Donations XXXX XXXX YYYY YYYY
Rent Electricity XXXX YYYY
Postage
Telephone XXXX YYYY
Water Charges XXXX YYYY
Municipal Charges Stocks write off XXXX YYYY
Loss on disposal of fixed assets Staff XXXX XXXX YYYY YYYY
Training XXXX XXXX YYYY YYYY
Audit Fees XXXX YYYY
Consultancy Fees
Other taxes Paid (excluding BIT) XXXX YYYY
Other Professional Fees XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Other XXXX
YYYY
TOTAL ADMINISTRATION XXXX
EXPENSES YYYY
===== ====
Schedule 6: Financial Expenses
(Financial expenses are those expenses incurred due to the

usage of financial (monetary) transactions in the business).
Listed below are the some common expenses, which fall under
this head. Please remember that this is not an exhaustive list.
20vv 20vu
Nu’000 Nu’000
Bad Debts XXXX YYYY

Bank Charges & other exp. XXXX YYYY
Foreign Exchange hedging losses XXXX YYYY
Prov. for Bad & Doubtful Debts XXXX YYYY
Provision for any Doubtful Advances XXXX YYYY
............................... XXXX YYYY

TOTAL Financial Expenses XXXX YYYY
==== ====
Schedule 7: Inadmissible Direct Expenses
20vv 20vu
Nu’000 Nu’000
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY

TOTAL XXXX YYYY
==== ====
Schedule 8: Inadmissible Selling Expenses
20vv 20vu
Nu’000 Nu’000
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
TOTAL XXXX YYYY
===== =====
Schedule 9: Inadmissible Administration Expenses
20vv 20vu
Nu’000 Nu’000
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
TOTAL XXXX YYYY
===== ====
Schedule 10: Inadmissible Financial Expenses
20vv 20vu
Nu’000 Nu’000
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY

XXXX YYYY
TOTAL ==== =====
Schedule 11: Appropriations

20vv 20vu
Nu’000 Nu’000
Salary Claimed
XXXX YYYY
Salary Allowable XXXX YYYY
Excess Salary XXXX YYYY
Dividends inadmissible as expenses
Other Appropriations: XXXX YYYY
Donations Claimed XXXX YYYY
Donations Allowable XXXX YYYY
Donations Inadmissible
XXXX YYYY
Interest Allowable XXXX YYYY
Interest Inadmissible
XXXX YYYY
Income appropriations XXXX YYYY
…………………………. XXXX YYYY

XXXX YYYY
TOTAL
===== =====
Schedule 12: Bonuses disallowed
20vv 20vu
Nu’000 Nu’000
Bonus Claimed XXXX YYYY
Initial Assessed Net profit (A) XXXX YYYY
NP from which 10% value is calculated XXXX YYYY
Bonus Allowable as per 10% rule XXXX YYYY
Bonus Claimed: XXXX YYYY
Bonus Disallowed due to regulation or inadequate supporting
(XXXX) (YYYY)
Bonus Allowable as per bookings XXXX YYYY
Only if the bonus allowable as per bookings is greater then the bonus
allowable as per the 10% rule then there should be more disallowances to
the value of the difference between the bonus allowable as per the bookings
and the bonus allowable as per the 10% rule and this should be added to
the other bonus disallowance as mentioned below to come to the total bonus
disallowed figure
Total bonuses to be disallowed

Bonus Disallowed due to regulation or inadequate supporting XXXX
YYYY
Bonus Disallowed due to the difference as mentioned above XXXX YYYY
Total Bonus disallowed XXXX YYYY
=== ===
Schedule 13: Entertainment and Staff Welfare disallowed
20vv 20vu
Nu’000 Nu’000
Ent/Staff Welfare Claimed (club all these XXXX YYYY
exps)
Initial Assessed Net profit (A) XXXX YYYY
NP from which 2% value is calculated XXXX YYYY
Ent/Staff Welfare Allowable as per 2% XXXX YYYY
rule
Ent/Staff Welfare Claimed (club all these XXXX YYYY
exps)
Ent/Staff Welfare Disallowed due to (XXXX) (YYYY)
inadequate supporting
Ent/Staff Welfare Allowable as per XXXX YYYY
bookings
Only if the Ent/Staff Welfare allowable as per bookings is greater then the
Ent/Staff Welfare allowable as per the 2% rule then there should be more
disallowances to the value of the difference between the Ent/Staff Welfare
allowable as per the bookings and the Ent/Staff Welfare allowable as per the
10% rule and this should be added to the other Ent/Staff Welfare disallowance
as mentioned below to come to the total Ent/Staff Welfare disallowed figure
Total Ent/Staff Welfare to be disallowed

Ent/Staff Welfare Disallowed due to inadequate supporting XXXX YYYY
Ent/Staff Welfare Disallowed due to the difference as mentioned above XXXX
YYYY
Total Ent/Staff Welfare disallowed XXXX YYYY
Schedule 14: Fixed Assets

TOTAL DEPRECIATION XXXX YYYY
FOR YEAR
Less: Depreciation on
Disposals
Disposals: Date Rate
.................................... ....... ....... (XXXX) (YYYY)
.................................... ....... ....... (XXXX) (YYYY)
.................................... ....... ....... (XXXX) (YYYY)
.................................... ....... ....... (XXXX) (YYYY)
.................................... ....... ....... (XXXX) (YYYY)
Depreciation brought forward from last year XXXX YYYY

Depreciation carried forward to next year XXXX YYYY
==== ====
Net Book Value brought forward from last year XXXX YYYY
==== ====
NET BOOK VALUE CARRIED FORWARD TO NEXT YEAR XXXX YYYY
==== ====
Schedule 15: Current Assets
20vv 20vu
Nu’000 Nu’000
Cash XXXX YYYY

Bank XXXX YYYY
Sundry Debtors:
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Less: Provisions Total Sun-
dry Debtors Closing Stock: XXXX YYYY
XXXX) (YYYY)
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Closing Stock XXXX YYYY
Prepayments:
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Prepayments XXXX YYYY
Other Current Assets:
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY

TOTAL CURRENT ASSETS XXXX YYYY
===== =====
Schedule 16: Current Liabilities

20vv 20vu
Nu’000 Nu’000
Bank Overdraft XXXX YYYY
Unpaid Wages XXXX YYYY
Unpaid Taxes XXXX YYYY
Trade Creditors:
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Trade Creditors XXXX YYYY
Sundry Creditors:
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Sundry Creditors XXXX YYYY
Other Current Liabilities:
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
TOTAL CURRENT LIABILITIES XXXX YYYY
==== ====
Schedule 17: Long Term Capital
Proprietor’s Capital: 20vv 20vu

Nu’000 Nu’000
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Proprietor’s Capital (A) XXXX YYYY
Shareholders Funds:
Ordinary Shares XXXX YYYY
Preference Shares XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Shareholders Funds (B) XXXX YYYY
Donor or other Financing: (Capital Grants)

............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Donor or other Financing (Capital Grants) XXXX YYYY
(C)
TOTAL LONG TERM CAPITAL (A+B+C) XXXX YYYY
===== =====
Schedule 18: Long Term Loans
Long Term Loans:

Bank of Bhutan XXXX YYYY
Royal Monetary Authority
XXXX YYYY
Royal Insurance Corporation of Bhutan XXXX YYYY
Bhutan Development Finance Corporation XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Long Term Loans (A) XXXX YYY
Donor Financing (Liability):
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
.............................. XXXX YYYY
............................... XXXX YYYY
Total Donor Financing (liability) (B) XXXX YYYY
Other Financing (Liability):
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
............................... XXXX YYYY
Total Other (C) XXXX YYYY
TOTAL LONG TERM LOAN (A+B+C) XXXX YYYY
FORM PIT-1
PIT REGISTRATION

1. PERSONAL DETAILS
Name:________________________________________
Sex (Male or Female)____________________________
Date of Birth:__________________________________
Occupation:____________________________________
ID No./Resident Permit No:_______________________
Father’s Name__________________________________
Mother’s Name_________________________________
2. PERMANANT ADDRESS
House No: ________________________________________
Thram No: ________________________________________
Village: ___________________________________________
Gewog: ___________________________________________
Dzongkhag: ________________________________________
Nationality (If not a Bhutanese) ________________________
3. PRESENT ADDRESS
Address: ________________________________________
Tel No. (O) ___________________ (R)_______________
Post Box No: ________________ Fax No:_____________
Email Address: __________________________________
4. MARITAL STATUS
a) Are you married? (Please tick)
Yes ⁯
No ⁯
b) If yes, please fill in the particulars of your spouse.
Sl Citizen ID No./ Resident Region of Source of

Spouse’s Name
No Permit No. Registration Income
5. CHILDREN’S DETAILS
a) Do you have children? (Please tick)
Yes ⁯
No ⁯
b) If yes, please fill in the particulars of your child/

children
Sl. Date of Citizenship Source of Income

Name of Child
No Birth ID NO Income Clubbed with
If required, use additional sheet.
6. SOURCES OF INCOME
Do you have any sources of personal income? (Tick)
a) Salary Income ⁯
b) Rental Income ⁯
c) Dividend Income ⁯
d) Income from Other sources ⁯
7. PLACE OF REGISTRATION
a) Where do you want to register? (Tick one)
RRCO, Thimphu ⁯
RRCO, Paro ⁯
RRCO, P/ling ⁯
RRCO, Samste ⁯
RRCO, Gelephu ⁯
RRCO, S/jonkha ⁯
RRCO, Bumthang ⁯
RRCO, Mongar ⁯
TAX PAYERS DECLARATION
I hereby declare that the information given in this Form is true and correct
to the best of my knowledge and belief. In case if any information is found
untrue and false, I shall be liable for fines and penalties as per Chapter 5 of
the General Provisions of the Income Tax Act of the Kingdom of Bhutan,
2001.
Signature of the Individual:____________________

Name of the Individual: _______________________
Date:______________________________________
Instructions:
Please note instructions numbered below correspond to the
numbers in the Form, and it must be read together:
a) ID Card No/ R. Permit No. refers to Citizen Identity Card

Number for Bhutanese citizens, and Resident Permit No
is the Resident permit No issued by the Department of
Immigration and Census for non Bhutanese.
b) Permanent Address means the place where your census is
registered or where census records are located.
c) Present address means the place where you are currently
residing as a result of work, business etc.
d) If you are married, fill in the details of your spouse as laid out
in Table 4(b). Place of registration means the RRCO where
the spouse was previously registered before marriage. As
per Part III, Chapter 1, Section 2, of the Income Tax Act
of the Kingdom of Bhutan, 2001, all married couples must
choose the same RRCO for registration. Source of income
refers to source of income of your spouse.
e) If you have children, fill in the details of your children as
laid out in Table 5(b) . Source of income means source
of income of your child. Income clubbed with means the
name of the parent with whom the child’s income has been
clubbed with for personal income tax purpose.
f) Source of income means the source of your personal
income, and not of your spouse and children.
g) Place of registration is the place where you want to register
for personal income tax purposes. You can register in only
one RRCO as a taxpayer.
FORM PIT-2
PERSONAL INCOME TAX RETURN
PERSONAL INCOME TAX RETURN FOR

THE INCOME YEAR_______

1. PERSONAL DETAILS OF TAXPAYER: (Please fill the

following)
Name: TPN:
TO BE FILLED IN ONLY IF THERE ARE AMENDMENT/CHANGES TO THE
INFORMATION
House No:
CID/Resident Permit No:
Tharm No:
Village:
Nationality:
Gewog:
Date of Birth: / / (DD/MM/YY) Dzongkhag:
Father’s Name: CURRENT POSTAL ADDRESS
Mother’s Name:
Address:
Telephone No. (O)
Mobile No. Post Box No.
Email address: Dzongkhag
2. MARITAL STATUS
Spouse Name: CURRENT POSTAL ADDRESS
CID/Resident Permit No: Address:
TPN: Post Box No:

Nationality: Mobile No:

3. DETAILS OF CHILDREN
Tick if the Specify Tick if the
Sl. Name of income of the the source child is Date of
No Child CID No. child below 18 of income student Birth
years of age is clubbed in
clubbed in the the return
return
1
2
3
4. INCOME COMPUTATION WORKSHEET
4.1 Gross Income from Salary & Consultancy Services
Employer’s Income Particulars Amount Month Grand Total
Name & 1. Basic salary
Address
2. Salary Allowances
3. Bonus
4. Salary Arrears
5. Consultancy Fees
6. Commission
7. Sitting Fees
8. Leave Encashment
Other Allowance/Benefit:
a. House Rent Allowance
b. Telephone/Mobile Allowance
c. Conveyance Allowance
d. LTC (Exceeding Nu.15,000)
e. Any other Allowances
9. Gross Total (a+b+c+d+e)
Gross salary income (1+2+3+4+5+6+7+8+9)
Less: Specific Deduction (s)
a. General Provident fund (GPF)
b. Group insurance scheme (GIS)
Net salary income
Adjusted Gross Salary Income
AGI (i): Add the totals of net salary income from all employers to arrive at Gross
Income from Salary and transfer the amount to Table 5
4.2 Gross Income from Rental Property
Rental Per
Type of Plot /
No of No of Plot per Rental
Property Tharm No Location Remarks
Plots Units month Income
A: Gross rental income for all properties (add the above)

Less: Allowable deductions
B1: Interest paid on loans (Enclose Bank Statements)
B2: Repair & Maintenance (20% of A)
B3: Insurance Premium
B4: Local Taxes (Urban House Tax & Land Tax)
B: Total Allowable Deductions (B1+B2+B3+B4)
AGI (ii) Adjusted Gross Rental (AB. If Positive, transfer the amount to
table 5.
Rental Income Sheet for every plot as provided under Annexure

should be filled.
4.3 Gross Income from Dividend
Name of Share No. of Face value Dividend Dividend
Company Certificate No Shares of Shares Declared (%) Amount
A: Gross Dividend from all Companies(add the above)

Less: Specific Deductions
B1: Exemption 30,000
B2: Interest on loans for the purchase of shares from
a recognized financial institution (enclose Bank
statement))
B: Total Deductions (add the two above B=B1+B2)
AGI (iii) Adjusted Gross Dividend Income (A–B). If positive, transfer
the amount to table No 5.
4.4 Gross Income from Other Sources
Type of Income Name and address of person from TPN or ACS Income
whom received Code
A: Gross Income from all sources (add the above)
B: Specific Deduction/Exemption (30% of A)

AGI (iv) Adjusted Gross Income from Other Sources (A – B). If
positive, transfer the amount to table No 5.
5. TOTAL OF YOUR ADJUSTED GROSS INCOME [AG(i), AG(ii), AG(iii)
& AG(iv)]
Source of Income: Adjusted Gross Worksheet
Income (Nu.) Nos
1. Adjusted Gross Income from Salary 4.1
2. Adjusted Gross Income from Rental 4.2
Property
3. Adjusted Gross Income from 4.3
Dividends
4. Adjusted Gross Income from Other 4.4
Sources
Total Adjusted Gross Income
Less: Deductions
a. Life insurance premium paid (50%
of the premium upto a max of Nu.
50,000)
b. Donations (approved by MoF up
to max 5% of Total adjusted gross
income)
c. Education Expenses:
(i) Biological & Legally Adopted
Children:
(i) Education Expenses within Bhutan
(ii) Education Expenses outside Bhutan
(ii) Sponsored Children:
(i) Education Expenses within Bhutan
(ii) Education Expenses outside Bhutan
Total deduction
NET TAXABLE INCOME
6. CALCULATION OF SELF ASSESSED TAX
Tax
Income Slabs: Rates Allocation of Taxable Income
Amount
Upto Nu. 300,000 0 0
0+10% of (Net taxable Income
Nu. 300,001400,000 10%
300,000)
10,000+15% (Net taxable
Nu. 400,001650,000 15%
income400,000)
47,500+20% of (Net taxable
Nu. 650,0011000,000 20%
income650,000)
117,500+25% of (Net taxable
Nu. 1000,001-1,500,000 25%
income-1,000,000)
242,499+30% of (Net taxable income
Nu.1,500,000 & above 30%
1,500,000)
7. TAXES PAID QUARTERLY /TAXES DEDUCTED AT SOURCE

Income Source Tax Deducted at Source: Amount
1. Salary
2. Rental
3. Dividend
4. Other Income
Total TDS (Add the four amounts)
8. FINAL TAX PAYABLE/REFUNDABLE POSITION AT THE TIME

OF FILING
1. Tax Amount (from table 6)
2. Less Tax Deducted at Source (from table 7)
Tax Payable/(Refundable)[12]
Taxpayer’s Declaration
I hereby declare that the information given in this Form and the supporting
documents attached herewith are true and correct to the best of my knowledge
and belief. In case any information is found incorrect, I assume full responsibility
thereof and shall be liable for fines and penalties as per Chapter 5 of the General
Provisions of the Income Tax Act of the Kingdom of Bhutan, 2001.
Signature of the Taxpayer Authorised Representative Date:
Name:
Signature:
CID No.:
Mobile No.:
* A letter of authorization from the taxpayers must be attached.
For Official Use Only

Deposited Vide Money Receipt No:____________________________________
Money Receipt Date (DD/MM/YY): __________/ __________/_______________
Received & Verified by
Name:
Signature:
Designation:
Instructions on filing PIT Annual Tax Return
GENERAL INFORMATION
1. WHO MUST FILE A TAX RETURN?
 A person having income from sources mentioned
below in 3 but exceeding Nu.200,000 per annum
 Minor below 18 years of age having income from
sources as mentioned below in 3
 Resident earning personal income from sources as
mentioned below in 3
 Any other person not a citizen or a resident but having
personal income from sources in Bhutan or for work
performed in Bhutan.
2. HOW TO FILE?
 You can file your return online by visiting www.drc.
gov.bt
 Income of minors (individuals under 18 years of age)
must be clubbed with one of the parent’s income and
file together with the parent.
 Where a minor has a guardian appointed by the Court,
income of the minor must be filed separately.
3. WHAT ARE THE SOURCES OF INCOME UNDER

PERSONAL INCOME TAX?
 Salary income from employment or consultancy
services.
 Rental income from properties such as land, building
and houses.
 Dividend income from shareholdings in a company.
 Income from other sources such as hiring of privately
owned vehicle, plant and machinery, and intellectual
property rights.
4. WHERE AND WHEN TO FILE YOUR TAX RETURN?

Tax return must be filed within 1st March following the
income year at the Regional Revenue & Customs Office
(RRCO) where you have registered as a taxpayer.
5. WHAT DOES INCOME YEAR MEAN?

Income year means the calendar year starting 1st January
and ending on the 31st December.
DEFINITIONS
a) Gross Income means total income from a particular income
source before specific deduction(s)/ exemptions.
b) Specific Deduction(s)/Exemption(s) means deduction(s)/
exemption(s) allowable against a specified source of
income.
c) Total Gross Income means total income from all sources
under PIT before specific deduction(s)/exemption(s).
d) Adjusted Gross Income means gross income after allowing
specific deduction(s)/ exemption(s).
e) Total Adjusted Gross Income means total of the adjusted
gross income(s) from all income sources.
f) General Deductions means deductions allowable against
total adjusted gross income to arrive at Net Taxable Income.
g) Net Taxable Income means total adjusted gross income
after allowing general deductions. Tax rates are applied to
Net Taxable Income to arrive at the Tax Amount.
TABLE 1- INSTRUCTION
Table 1 requires you to fill in your personal details:

a) Name is your registered name and it should correspond to
the name in your census register.
b) ID Card No. is your Citizen Identity Card Number for
Bhutanese citizens, and Resident Permit No is the Permit
No. issued by the Department of Immigration and Census
for non Bhutanese.
c) Permanent Address means the place where your census is
registered or where census records are located.
d) Present Address is the place where you are currently residing
as a result of work, business etc.
TABLE 2- INSTRUCTIONS
Table 2 requires you to fill in the details of your spouse:

a) Name is the registered name of your spouse and it should
correspond to the name in the census register or Resident
Permit No as the case may be.
b) ID Card No. is your spouse’s citizen Identity Card Number
if your spouse is Bhutanese citizen, and Resident Permit
No. is your spouse’s Resident permit No issued by the
Department of Immigration and Census if your spouse is
non Bhutanese.
c) Previous Place of Registration is the place or RRCO where
the spouse was previously registered before marriage.
Table 3 requires you to fill in the details of your children below
18 years of age clubbing their income with your income:
a) If you have children clubbing income with your income in
the annual tax return, please fill in name, date of birth of
your child, and source of income included in the return.
Table 4 requires you to fill in the details of your personal income
source wise as below:
Table 4.1: Gross Income from Salary and Consultancy

Services:
a) Name of Employer & Address is the name of the employer(s)
from whom you receive your salary income during the
income year. Address should include business address and
Phone No. of your employer(s).
b) TPN is the No. allotted by the Department of Revenue &
Customs to a company or business unit, and ACS code is
the agency code allotted by the Department of Budget and
Accounts if your employer is a Government Agency.
c) Basic Salary is pay and wages as mentioned in your salary
statement. It is exclusive of allowances and benefits.
d) Consultancy Fees is the fees received by non licensed
consultants or freelance consultants. It includes any fee
received by you besides your salary.
e) Bonus is bonus received during the income year, if any.
f) An allowance is allowances received during the income
year. It includes technical, professional, production, flying
incentives or allowances.
g) Benefits are benefits received by you in addition to the ones
mentioned above during the income year. It includes any
other benefits such as free accommodation, free electricity
and gas, paid holidays, free transport, and any form of perks
and fringe benefits, remuneration etc. The value of such
benefits will be the actual cost incurred by the employer in
providing such benefits to you and it should be converted in
terms of money.
h) Total from Employer is the sum total of basic pay,
consultancy fees, bonus, allowances, benefits from a single
employer.
i) Gross Salary is the total of gross salary income received
from all employers, if you have more than one employer.
j) Adjusted Gross Salary Income is the total gross salary
income minus the specific deductions (PF and GIS)
Please remember to enclose all supporting documents relating

to your salary income such as certificates of TDS, and pay slips
from your employer for adjustment and verification at the time
of filing.
Table 4.2: Gross Income from Rental Property such as Land,

Building and Houses:
a) Type of property is whether property is land, house or
building.
b) Plot No./Thram No. is the No. allotted by City Corporation
or Municipal/Dzongkhag.
c) No of Units/No of Plots is the No of units/plots of the real
property generating rental income depending on whether
the property is land or building/house.
d) Location is the location of the real property.
e) Rental Income is the income received as rent from the real
property.
f) Gross Rental Income is the total amount of income received
as rent.
g) Interest is the interest paid on loans availed for purchase or
construction of the real property generating rental income.
It must be supported by relevant documents such as loan
agreement, bank statement, and receipts.
h) Repair and Maintenance is 20 % of the gross rental income.
i) Insurance Premium is the total insurance premiums paid
for the real property generating rental income. It must be
supported by relevant documents/receipts.
j) Local Taxes is municipal taxes and urban house taxes paid
for the real property generating rental income. It must be
supported by relevant documents/receipts.
k) Specific Deductions/exemption is the total deductions/
exemption under rental income.
l) Adjusted Gross Rental Income is Gross Rental Income after
specific deductions/exemption.

to your rental income such as certificates of TDS for verification
and adjustment at the time of filing.
Table 4.3: Gross Income from Shareholdings in a Company:

a) Name of Company is the name of the company from whom
you receive your dividend income.
b) TPN is the company’s TPN allotted by the Department of
Revenue & Customs.
c) Share Certificate No. is the number of the share certificate.
d) No. of Shares is the number of shares owned.
e) Face Value of Share is the value of share given in the share
certificate.
f) Amount of Dividend is the total amount of dividend
received from the shareholdings.
g) Interest is the interest paid on loans to purchase shares. It
must be supported by relevant document/receipts such as
loan statements and bank statements.
h) Gross Dividend Income is the total dividend income
received from all your shareholdings.
i) Adjusted Gross Dividend Income is the gross dividend
income after specific deductions/exemption.
Please remember to enclose all supporting documents relating to

your Dividend Income such as TDS certificates, bank statements
and loan statements for verification at the time of filing.
Table 4.4: Gross Income from Other Sources such as hire of

privately owned vehicles, plant &machinery, and intellectual
property rights:
a) Type of Income is income received from hire of privately
owned vehicles, plant & machinery, intellectual property
such as copyrights, patents, trademarks etc.
b) Name and Address of person(s) from whom received is the
name and address of person(s) making payments.
c) TPN is the No. allotted by the Department of Revenue &
Customs to a company or business unit, and ACS code is
the agency code allotted by the Department of Budget and
Accounts if the person(s) making payment is a Government
Agency.
d) Income is the amount of income received by you.
e) Specific Deductions/Exemption is 30% of the gross income
from other sources received by you.
f) Adjusted Gross Income from Other Sources is the total
gross income from other sources after specific deductions/
exemption.

to your Income from other Source such as TDS certificates for
verification and adjustment at the time of filing
Table 5 requires you to add all your Adjusted Gross Incomes by
transferring the amounts from Tables 4.1 to 4.4.
a) Transfer the amounts from Table 4.1 to 4.4, that is, from the
last row of the tables numbered AGI (i), AGI (ii), AGI (iii)
and AGI (iv) to its respective places in Table 5.
b) If you have made donations as per Section 12, and claim
education allowance as per section 12.1 of the Act, enter
the actual amounts. You must attach all relevant documents/
receipts to support your claim.
c) Add all your Adjusted Gross Incomes as transferred from
Table 4.1 to 4.4 and deduct donations and education
allowance to arrive at your Net Taxable Income
Table 6 requires you to calculate the Tax Amount by applying
the rates prescribed in Table 6 on the Net Taxable Income (Table
5). If you have problems in calculating, you can obtain a copy
of a computer spreadsheet from your Regional Revenue and
Customs Office.
Table 7 requires you to fill in the details of Tax Deducted at
Source (TDS) for sources of income mentioned in the Table
(that is, salary income, rental income, dividend income, interest
income, and income from other sources)
All TDS must be supported by relevant documentary proofs

such as TDS certificates.
Table 8 requires you to determine the balance tax payable by
you or refundable to you at the time of filing. Deduct all TDS
from the Tax Amount as calculated in Table 6. If it is a positive
amount it is tax payable by you at the time of filing, and if it is
a negative amount, then it is a tax refundable to you by RRCO.
IMPORTANT NOTES:
a) Set off is allowed only within the same source of income,
but not between different sources of income.
b) When you complete filling this Form, please remember to
put date and signature and the bank account number.
c) You will receive a Demand Notice from the concerned
RRCO (with additional tax to be paid by you or tax to be
refunded to you) after the tax assessment of your return is
completed.
d) If you do not agree with the assessed tax amount you can
send a written appeal to the RRCO within 30 days from the
date of issue of the Demand Notice along with supporting
documents and reasons thereof.
e) Income of minors (individuals under the age of 18) must
be clubbed with one of the parent’s income. Where a minor
has a guardian appointed by the Court, income of the minor
must be filed separately.
f) Should you find the space provided in the Form is not
adequate enough, additional sheets may be used and attach
the same along with the return.
CHECKLIST OF REMINDERS
Have you filled in the details of your personal income correctly

in Table 1 to Table 8? To ensure correct declaration and to avoid
penalties, please check once again.
 Have you enclosed TDS certificates for the following?

 Salary Income ⁯
 Rental income ⁯
 Dividend Income ⁯
 Income from Other sources ⁯
 Have you enclosed all supporting documents and receipts

for
 Interest paid on loans for real property, ⁯
 Insurance premium paid for real property, ⁯
 Local taxes paid for real property, ⁯
Interest paid on loans for buying shares.
 Have you transferred the amounts from Table 4.1, 4.2, 4.3
and 4.4 correctly to Table 5? To ensure correct computation,
please check once again.
 Have you enclosed all supporting documents relating to

insurance, donations and education allowance? ⁯
 Have you calculated your Tax Amount correctly in Table

6? ⁯
 Have you put your bank account number, Name &

Signature? ⁯
FORM IT-1
MONTHLY SALARY SCHEDULE
Salary Schedule for the month of ___________ Year ________
Name of the Employer/Organization:

TPN/ACS:
Address:
1 2 3 4 5 6 7 8 9
TDS
Sl. Name of Citizen I.D Basic Benefits/ Gross from Health
No. Employee / Resident TPN Salary Allowances Salary Gross Contribution Total Remarks
Permit No
Salary
The above amount of Nu. _________ is remitted by cash/cheque

No. ______ dated ________ to ________being the deposit of
TDS on Salary Income and Health Contribution for the month
of _______________. .
Name and Signature of the Disbursing Officer

Seal of Employer
Instructions:
As per Section 19 of the General Provisions of the Income Tax
Act of the Kingdom of Bhutan 2001, this form must be completed
and submitted to the concerned Regional Revenue & Customs
Office by all employers including RGR accounts holders on a
monthly basis. All employers are required to deduct tax at the
time of payment as prescribed in Annexure III and deposit to the
concerned RRCO on or before the 10th of the following month
(for more details see Rule No. 60(2)(b)(i) of General Provisions).
a) Column 1 refers to the Citizen ID of Bhutanese Nationals.

Where Citizen ID is “under process” it must be stated in
the Remarks Column 10, and a temporary ID No. shall be
issued by the RRCO for tax purpose.
b) Column 2 refers to the Resident/Work Permit No. issued
by the Department of Immigration & Census for Non
Bhutanese employees.
c) Column 3 refers to the employee ID No. issued by the
employer if it exists.
d) Gross Salary in column 6 refers to the basic salary (4) +
benefits/allowances. Please note that Salary tax is to be
calculated on the Gross Salary.
e) Benefits/Allowances includes everything received in
money or monies worth from the employer but does not
include Leave Travel Concession (LTC), Travelling and
Daily Allowance (TA/DA) while on tours.
f) To ensure correct computation of tax and timely refund/
adjustment of taxes when the Tax Return is filed, it is of
paramount importance that the information submitted is
complete and correct.
FORM IT-2
INCOME FROM REAL PROPERTY
Tax Deducted at Source on Income from Real Property for the

month of ______________ Year ___________
Name of Withholding Agent:

TPN/ACS:
Address:
1 2 3 4 5 6 7 8
Sl. Name & Citizen Type of No of TDS
No. Address I.D No. TPN Location Amount Remarks
Property Units @5%
The above amount of Nu. ___________ is remitted by cash/

cheque No. __________ dated __________ to ________being
the deposit of TDS on Income from Real Property of the
person(s) mentioned above.
Name and Signature of the Authorized Signatory

Seal of Withholding Agent
Instructions:
As per Section 19 of the General Provisions of the Income
Tax Act of the Kingdom of Bhutan, 2001, this form must be
completed and submitted to the concerned RRCO by all by all
government, semigovernment, NGO’s, company and business
entities, including RGR account holders, making rental payments
for the hire of real property as defined under Rule No. 3 of the
Rules. All withholding agencies are required to deduct TDS at
the time of payment @ 5% of the gross payment and deposit
the same in to an RGR account or to the concerned RRCO on
or before the 10th of the following month (for more details see
Rule No. 60(2)(b)(ii) of General Provisions).
a) Name & Address refers to the name & address of the

person(s) to whom the rental payment is made.
b) Column 2 refers to whether the property is land, building,
house, cottage, factory building etc.
c) Column 3 refers to No of Plots/Units depending on whether
the rented property is land or building/houses.
d) Column 4 refers to the location of the rented property.
e) Column 5 refers to the amount of rental income from real
property.
f) To ensure correct computation and timely refund/adjustment
of taxes when the Tax Return is filed, it is of paramount
importance the information submitted is complete and
correct.
FORM IT-3
INCOME FROM DIVIDEND
Tax Deducted at Source on Income from Dividend for the Year

declared on _________ (DD) __________ (MM) 20_____ (YY)
Name of Company:
TPN:
Address:
1 2 3 4 5 6 7 8
Sl. Name of the Citizen Face

No of Dividend
No. Shareholder I.D No TPN Value of Dividend TDS
Shares Amount
Shares (%) @10%
The above amount of Nu. __________is remitted by cash/cheque

No. _________dated _________to ________being the deposit
of TDS on Income from Dividend of the person(s) mentioned
above.
Name and Signature of the Authorized Signatory of the Company

Seal of the Company
Instructions:
Act of the Kingdom of Bhutan, 2001, all companies distributing
dividend to its shareholders must deduct tax at source @ 10% on
the day of payment, and deposit the same to the concerned RRCO
on or before the 10th of the following month. Please note that for
citizens and residents receiving dividend more than Nu. 10,000,
and for persons other than citizens and residents deduction shall
be on the Total Dividend paid out. However, for citizens and
residents receiving dividend income below Nu 10,000, no TDS
deduction shall be applied. (for more details see Rule No 60(2)
(b)(iii) of General Provisions of the Rules). This Form must be
completed and submitted by all companies distributing dividend
and information must be furnished on all shareholders receiving
dividend income whether TDS is deducted or not.
a) Column 1 refers to the Citizen ID of Bhutanese Nationals.

Where Citizen ID is “under process” it must be stated and
a temporary ID No. shall be issued by the RRCO for tax
purpose. Where the recipient is a company or business the
TPN or entity code must be provided.
b) The information indicated in column 1 to 8 are to be
furnished as and when dividends are paid.
c) Information must be furnished on all dividends paid
irrespective of the amount, whether there is deduction of
TDS or not.
d) To ensure correct computation of tax and timely refund/
adjustment of taxes when the Tax Return is filed, it is
of paramount importance the information submitted is
FORM IT-4
INCOME FROM INTEREST
Tax Deducted at Source on Income from Interests for the period

____________
Name of the Financial Institution:

TPN:
Address:
Branch:
Sl. Name & Address of the Total Interest

TDS @
No Account Holder TPN A/C No Income
5%
The above amount of Nu. _________is remitted by cash/cheque

No. _________ dated________ to _______being the deposit of
TDS on Income from Interest of the person(s) mentioned above.
Name & Signature of the Authorized Signatory

Instructions:

Act of the Kingdom of Bhutan, 2001, all financial institutions
paying interest to its accounts holders must deduct tax at source
@ 5% at the time of payment or when the interest is credited to the
account holder’s account, and deposit the same to the concerned
RRCO on or before the 10th of the following month. This Form
must be completed and submitted by all financial institutions
paying interest and information must be furnished on all account
holders receiving interest whether TDS is deducted or not.
a) The Taxpayer Number (TPN) or Agency code must be

provided for all account holders receiving interest income
b) Information must be furnished on all interest paid out
irrespective of the amount.
c) To ensure correct computation of tax and timely refund/
adjustment of taxes when the Tax Return is filed, it is of
paramount importance that the information submitted is
FORM IT-5
TDS FROM TOUR INCOME
The Regional Director,

Regional Revenue & Customs Office,
Sir,
Please find below details of payments on account of 2% TDS on

tour income.
Sl. Name & Address Gross Income Amount of Net TDS @

TPN
No of Operator Received in Nu. Royalty Paid Income 2%

No. dated________ to _____being the deposit of TDS on
Tour Operators of the person(s) mentioned above.

Instructions:
a) This form is to be filled by the Department of Tourism and

forwarded to the nearest RRCO on or before the 10th of the
following month.
b) The amount deducted at source must be deposited into a
RGR account immediately or on the day following the
receipt of the payment from tourists/agencies abroad.
c) A copy of the duly filled form must be sent to the tour
operator for information.
d) Failure to comply with the above shall result in fines
& penalties as per Chapter 5, Section 34, of the General
Bhutan, 2001 and Rule 63 of the General Provisions.
FORM IT-6
SCHEDULE OF TDS REMITTANCE FROM
CONTRACTORS
Tax deducted at source on Contract Income for the period

_________ to _________ Year
Name of the Organization:

TPN/ACS:
Address:
If Deposited into
Amount
Name of Bill/ RGR
Description Gross Withheld
Sl. Contractor/ Invoice Accounts
TPN of Work/ Amount
No Firm & No & Rate Receipt Challan
Supply Disbursed Amount
Address Date of No. & No &
(Nu.)
Tax Date Date
Total
The above amount of Nu. __________is remitted by Cash/

Cheque/Demand draft No __________dated _______to ____
being the deposit of TDS.
Name & Signature of the Disbursing Officer

Instructions:

completed and submitted to the concerned RRCO by all
entities, including RGR account holders, deducting tax from
payments made to a company or business for construction,
logging work, management contracts, supplies, transportation,
consultancy and other professional services. All withholding
agencies are required to deduct TDS at the time of payment at
the rates mentioned in d) below and deposit the same in to an
RGR account or to the concerned RRCO on or before the 10th
of the following month (for more details see Rule 60(2)(b)(vi) of
the General Provisions of the Rules).
a) Name of the Contractor/Firm Address is the name and

address of the party undertaking the contract.
b) TPN is the Tax Payer Number of the party undertaking the
contract.
c) TDS is applicable on the Gross Running Bill as well as the
Advances paid to the party.
d) The rate of TDS is 2% for licensed national contractors and
3% for nonnational contractors.
e) Revenue Money Receipt No or Depositing Challan No.
is money receipt/deposit No. if you have a separate RGR
account and deposit directly.
f) If one of the payments listed above is the first payment
against a contract, please attach a copy of the contract
agreemen
FORM IT-7
INCOME FROM OTHER SOURCES
Tax deducted at source on Income from Other Sources for the

period ___________to ________Year__________
Name of the Organization: TPN/ACS:

Address
1 2 3 4 5 6 7
Sl. Invoice/
Name & Citizen Account Invoice/Voucher TDS
No
Address I.D No. TPN Head No. & Date
Voucher
@ 5%
Remarks
Amount
The above amount of Nu. __________is remitted by cash/cheque

No. _______dated _______to ______being the deposit of TDS
on Income from Other Sources of the person(s) mentioned
above.
Name and Signature of the Authorized Signatory

Instructions:

completed and submitted to the concerned RRCO by all by all
entities, including RGR account holders, deducting tax from
payments made to individuals for the hiring of vehicles, plant/
machinery and intellectual property rights. All withholding
agencies are required to deduct TDS at the time of payment @
5% of the gross payment and deposit the same in to an RGR
account or to the concerned RRCO on or before the 10th of the
following month (for more details see Rule No. 60(2)(b)(vii) of
General Provisions).
a) Column 1 refers to the Citizen ID of Bhutanese Nationals,

where Citizen ID is “under process” it must be stated in the
Remarks Column 6, a temporary ID No. shall be issued by
the RRCO for tax purpose
b) Column 3 refers to the type of services hired such as hire of
vehicle, plant or machinery etc.
c) To ensure correct computation of tax and timely refund/
adjustment of taxes when Tax Return is filed it is of
paramount importance the information submitted is
FORM IT-8
TDS FROM LOTTERY WINNINGS
Tax Deducted at Source on Lottery Winnings for the period

___________
Name of the Lottery Operating Entities/Agents:

TPN:
Address:
Contact No.:
Sl. Name of the CID/WP/ Gross Winning

TPN TDS @ 20%
No Winner Passport No Amount

No. ___________dated _______ to _________being the deposit
of TDS on Lottery Winnings of the person(s) mentioned above.

Instructions:
a) This form is to be filled by the Lottery Operating Entities/

Agents and forwarded to the nearest RRCO on or before the
10th of the following month.
b) The amount deducted at source must be deposited into a
RGR account immediately or on the day following the
receipt of the payment from tourists/agencies abroad.
c) A copy of the duly filled form must be sent to the lottery
winners for information.
d) Failure to comply with the above shall result in fines
& penalties as per Chapter 5, Section 34, of the General
Bhutan, 2001 and Rule 63 of the General Provisions.
FORM IT-9
RESTRAINING ORDER

Ref. No._____________ Date: _____________
To,
……………………………………………………………….
……………………………………………………………….
……………………………………………………………….
Sub: …………………………………………………………
Dear Sir/Madam,
Your tax/duty is overdue with the following amount:
Income year XXXX, Nu

Income year YYYY, Nu
Income year ZZZZ, Nu
Penal interest 24% on Nu. ____ from _____to ____ Nu. ____
Fines and penalties Nu
Total Nu
Setoff/Paid Nu
Remainder due Nu.
You have defaulted payment of the agreement dated _______and
you have not attended the meeting called on ______ Therefore, a
restraint has been put on your assets as follows:
Date:____Asset Description:____Model:_____Year:____Prior
claims by 3rd person: Concerned authorities:
…………………………………..
…………………………………..
…………………………………..
You are hereby informed that on the asset(s) mentioned above,

you cannot dispose, sell or borrow against the asset without
prior approval of the tax authority. If you dispose contrary to
the restraint you will be liable to prosecution by the Court with
a charge of fraudulent disposition of property by a debtor to the
detriment of his creditors.
Penal interest of 24% p.a. is payable until the date of payment.

In addition, you may be liable for further fines and penalties as
per Chapter 5 of the General Provisions of the Income Tax Act
of the Kingdom of Bhutan, 2001 and Rule 63 of the General
Provisions.
You are requested to take appropriate steps to clear your due tax/
duty within 14 days of the date of this letter. If you fail to do so,
we may put your restrained asset(s) on auction as per Rule No.
64(2) of the General Provisions.
The outstanding tax/duty together with interest will be recovered

from the proceeds of the auction, and a surplus, if any, will be
paid to you.
You may appeal in writing within 30 days from the date of issue
of this letter as per Chapter 7, General Provisions of the Income
Tax Act of the Kingdom of Bhutan, 2001.
Yours faithfully,
Name & Signature of the Regional Director
Witness of Restraint: Witness of Restraint:

Name and Address: Name and Address:

Cc to:
____________________
____________________
____________________
FORM IT-10
SPONSORED STUDENT

Name of Taxpayer:
CID/TPN:
RRCO:
Contact No.:
Current Address:
Education Expenses Claimed:
Applicant’s relation to student:

Name of the Student:
D.O.B:
CID number:
Student ID number (issued by MOE):
Gewog/Village/Dzongkhag:
Father’s Name:
Father’s CID No:
Occupation:
Mother’s Name:
Mother’s CID No:
Occupation:
Reasons for sponsoring a student:
Mandatory supporting documents required:
1. Certification from the Department of Adult and Higher Educa-
tion (DAHE) or a particular school authority, that the spon-
sored child is not under any scholarships;
2. Certification from the concerned Gup/concerned authority that
the child is financially underprivileged; and
3. Any other relevant supporting documents.
Disclaimer
I hereby declare that the information given in this Form and the supporting docu-
ments attached herewith are true and correct to the best of my knowledge and belief.
In case any information is found incorrect, I assume full responsibility thereof and
shall be liable for fines and penalties as per Chapter 5 of the General Provisions of
the Income Tax Act of the Kingdom of Bhutan 2001 and the Rule 63 of the General
Provisions.
[Affix Legal Stamp]
(Signature of applicant)
FORM IT-11

REGIONAL REVENUE & CUSTOMS
OFFICE
Ref. No. Date:

Demand Notice
………………………………………..
………………………………………..
…………………………………………
This is to give you notice under section 4, chapter 2 of the

General Provisions of the Income Tax Act of the Kingdom of
Bhutan 2001, that the sum of Nu. as specified in the enclosed
assessment report has been determined to be payable by you for
the following income years. You are now requested to make the
following payments either at RRCO Cash counter or through
online.
Income year Head of Income Amount
2019 Fines and Penalties XXXXXX
2020 Corporate Income Tax XXXXXX
Total Amount XXXXXX
======
Failure to comply with the above notice shall result in fines
and penalties as per Chapter 5 of the General Provisions of the
Income Tax Act of the Kingdom of Bhutan, 2001 and Rule 63 of
the General Provisions.
Place…………………..
Date…………………….
Official seal
TRC-1

REGIONAL REVENUE & CUSTOMS
OFFICE
Ref. No: Date:
TAX RESIDENCY CERTIFICATE
Name of Taxpayer
Address
Status of the Taxpayer
Taxpayer Registration Number (TPN)
Period for which the Certificate is applicable
In compliance with the Agreement between the Royal

Government of Bhutan and the Government of the Republic of
India for the Avoidance of Double Taxation and the Prevention
of Fiscal Evasion with respect to Taxes on Income, we hereby
certify that the above taxpayer is a resident of Bhutan for tax
purpose.
This certificate is issued upon the request of the above taxpayer

for whichever legal purpose it may serve.
Name:
Designation:
Signature
Office Seal
ANNEXURE I
CATEGORIZATION
SECTOR CATEGORY INVESTMENT RANGE TURNOVER RANGE
Large More than Nu. 5 million More than Nu.10 million

Medium Between Nu.3 5 million Between Nu.6 10 million
Trading Small Between Nu.1 3 million Between Nu.26 million
Micro Less than 1 million Less than 2 million

Large More than Nu.100 million
Medium Between Nu. 10 100 million
Manufacturing Small Between Nu. 1 10 million
Cottage Less than Nu. 1 million
Large More than Nu.10 million More than Nu.20 million

Medium Between Nu. 5 10 million Between Nu.10 20 million
Service Small Between Nu.15 million Between Nu.2 10 million
Micro Less than 1 million Less than 2 million
Note:
a) All companies and businesses shall be categorized based on

fulfillment of either one of the criteria.
b) Investment means owners contributions/ paid up share

capital plus long term loans.
c) However, the construction sector will be categorized in

accordance with the classification made by the Construction
Development Board.
ANNEXURE – III
REVISED TDS SCHEDULE FOR MONTHLY SALARY

INCOME
Monthly Salary TDS Monthly Salary TDS Monthly Salary TDS
From To Slab From To Slab From To Slab
0 25,000 0 29,501 29,600 460 34,101 34,200 963
25,001 25,100 10 29,601 29,700 470 34,201 34,300 978
29,701 29,800 480 34,301 34,400 993
25,101 25,200 20 29,801 29,900 490 34,401 34,500 1,008
25,201 25,300 30 29,901 30,000 500 34,501 34,600 1,023
25,301 25,400 40 30,001 30,100 510 34,601 34,700 1,038
25,401 25,500 50 30,101 30,200 520 34,701 34,800 1,053
25,501 25,600 60 30,201 30,300 530 34,801 34,900 1,068
25,601 25,700 70 30,301 30,400 540 34,901 35,000 1,083
25,701 25,800 80 30,401 30,500 550 35,001 35,100 1,098
25,801 25,900 90 30,501 30,600 560 35,101 35,200 1,113
25,901 26,000 100 30,601 30,700 570 35,201 35,300 1,128
26,001 26,100 110 30,701 30,800 580 35,301 35,400 1,143
26,101 26,200 120 30,801 30,900 590 35,401 35,500 1,158
26,201 26,300 130 30,901 31,000 600 35,501 35,600 1,173
26,301 26,400 140 31,001 31,100 610 35,601 35,700 1,188
26,401 26,500 150 31,101 31,200 620 35,701 35,800 1,203
26,501 26,600 160 31,201 31,300 630 35,801 35,900 1,218
26,601 26,700 170 31,301 31,400 640 35,901 36,000 1,233
26,701 26,800 180 31,401 31,500 650 36,001 36,100 1,248
26,801 26,900 190 31,501 31,600 660 36,101 36,200 1,263
26,901 27,000 200 31,601 31,700 670 36,201 36,300 1,278
27,001 27,100 210 31,701 31,800 680 36,301 36,400 1,293
27,101 27,200 220 31,801 31,900 690 36,401 36,500 1,308
27,201 27,300 230 31,901 32,000 700 36,501 36,600 1,323
27,301 27,400 240 32,001 32,100 710 36,601 36,700 1,338
27,401 27,500 250 32,101 32,200 720 36,701 36,800 1,353
27,501 27,600 260 32,201 32,300 730 36,801 36,900 1,368
27,601 27,700 270 32,301 32,400 740 36,901 37,000 1,383
27,701 27,800 280 32,401 32,500 750 37,001 37,100 1,398
27,801 27,900 290 32,501 32,600 760 37,101 37,200 1,413
27,901 28,000 300 32,601 32,700 770 37,201 37,300 1,428
28,001 28,100 310 32,701 32,800 780 37,301 37,400 1,443
28,101 28,200 320 32,801 32,900 790 37,401 37,500 1,458
28,201 28,300 330 32,901 33,000 800 37,501 37,600 1,473
28,301 28,400 340 33,001 33,100 810 37,601 37,700 1,488
28,401 28,500 350 33,101 33,200 820 37,701 37,800 1,503
28,501 28,600 360 33,201 33,300 830 37,801 37,900 1,518
28,601 28,700 370 33,301 33,400 843 37,901 38,000 1,533
28,701 28,800 380 33,401 33,500 858 38,001 38,100 1,548
28,801 28,900 390 33,501 33,600 873 38,101 38,200 1,563
28,901 29,000 400 33,601 33,700 888 38,201 38,300 1,578
29,001 29,100 410 33,701 33,800 903 38,301 38,400 1,593
29,101 29,200 420 33,801 33,900 918 38,401 38,500 1,608
29,201 29,300 430 33,901 34,000 933 38,501 38,600 1,623
29,301 29,400 440 34,001 34,100 948 38,601 38,700 1,638
29,401 29,500 450
38,701 38,800 1,653 44,201 44,300 2,478 49,701 49,800 3,303
38,801 38,900 1,668 44,301 44,400 2,493 49,801 49,900 3,318
38,901 39,000 1,683 44,401 44,500 2,508 49,901 50,000 3,333
39,001 39,100 1,698 44,501 44,600 2,523 50,001 50,100 3,348
39,101 39,200 1,713 44,601 44,700 2,538 50,101 50,200 3,363
39,201 39,300 1,728 44,701 44,800 2,553 50,201 50,300 3,378
39,301 39,400 1,743 44,801 44,900 2,568 50,301 50,400 3,393
39,401 39,500 1,758 44,901 45,000 2,583 50,401 50,500 3,408
39,501 39,600 1,773 45,001 45,100 2,598 50,501 50,600 3,423
39,601 39,700 1,788 45,101 45,200 2,613 50,601 50,700 3,438
39,701 39,800 1,803 45,201 45,300 2,628 50,701 50,800 3,453
39,801 39,900 1,818 45,301 45,400 2,643 50,801 50,900 3,468
39,901 40,000 1,833 45,401 45,500 2,658 50,901 51,000 3,483
40,001 40,100 1,848 45,501 45,600 2,673 51,001 51,100 3,498
40,101 40,200 1,863 45,601 45,700 2,688 51,101 51,200 3,513
40,201 40,300 1,878 45,701 45,800 2,703 51,201 51,300 3,528
40,301 40,400 1,893 45,801 45,900 2,718 51,301 51,400 3,543
40,401 40,500 1,908 45,901 46,000 2,733 51,401 51,500 3,558
40,501 40,600 1,923 46,001 46,100 2,748 51,501 51,600 3,573
40,601 40,700 1,938 46,101 46,200 2,763 51,601 51,700 3,588
40,701 40,800 1,953 46,201 46,300 2,778 51,701 51,800 3,603
40,801 40,900 1,968 46,301 46,400 2,793 51,801 51,900 3,618
40,901 41,000 1,983 46,401 46,500 2,808 51,901 52,000 3,633
41,001 41,100 1,998 46,501 46,600 2,823 52,001 52,100 3,648
41,101 41,200 2,013 46,601 46,700 2,838 52,101 52,200 3,663
41,201 41,300 2,028 46,701 46,800 2,853 52,201 52,300 3,678
41,301 41,400 2,043 46,801 46,900 2,868 52,301 52,400 3,693
41,401 41,500 2,058 46,901 47,000 2,883 52,401 52,500 3,708
41,501 41,600 2,073 47,001 47,100 2,898 52,501 52,600 3,723
41,601 41,700 2,088 47,101 47,200 2,913 52,601 52,700 3,738
41,701 41,800 2,103 47,201 47,300 2,928 52,701 52,800 3,753
41,801 41,900 2,118 47,301 47,400 2,943 52,801 52,900 3,768
41,901 42,000 2,133 47,401 47,500 2,958 52,901 53,000 3,783
42,001 42,100 2,148 47,501 47,600 2,973 53,001 53,100 3,798
42,101 42,200 2,163 47,601 47,700 2,988 53,101 53,200 3,813
42,201 42,300 2,178 47,701 47,800 3,003 53,201 53,300 3,828
42,301 42,400 2,193 47,801 47,900 3,018 53,301 53,400 3,843
42,401 42,500 2,208 47,901 48,000 3,033 53,401 53,500 3,858
42,501 42,600 2,223 48,001 48,100 3,048 53,501 53,600 3,873
42,601 42,700 2,238 48,101 48,200 3,063 53,601 53,700 3,888
42,701 42,800 2,253 48,201 48,300 3,078 53,701 53,800 3,903
42,801 42,900 2,268 48,301 48,400 3,093 53,801 53,900 3,918
42,901 43,000 2,283 48,401 48,500 3,108 53,901 54,000 3,933
43,001 43,100 2,298 48,501 48,600 3,123 54,001 54,100 3,948
43,101 43,200 2,313 48,601 48,700 3,138 54,101 54,200 3,965
43,201 43,300 2,328 48,701 48,800 3,153 54,201 54,300 3,985
43,301 43,400 2,343 48,801 48,900 3,168 54,301 54,400 4,005
43,401 43,500 2,358 48,901 49,000 3,183 54,401 54,500 4,025
43,501 43,600 2,373 49,001 49,100 3,198 54,501 54,600 4,045
43,601 43,700 2,388 49,101 49,200 3,213 54,601 54,700 4,065
43,701 43,800 2,403 49,201 49,300 3,228 54,701 54,800 4,085
43,801 43,900 2,418 49,301 49,400 3,243 54,801 54,900 4,105
43,901 44,000 2,433 49,401 49,500 3,258 54,901 55,000 4,125
44,001 44,100 2,448 49,501 49,600 3,273 55,001 55,100 4,145
44,101 44,200 2,463 49,601 49,700 3,288 55,101 55,200 4,165
55,201 55,300 4,185 60,701 60,800 5,285 66,201 66,300 6,385
55,301 55,400 4,205 60,801 60,900 5,305 66,301 66,400 6,405
55,401 55,500 4,225 60,901 61,000 5,325 66,401 66,500 6,425
55,501 55,600 4,245 61,001 61,100 5,345 66,501 66,600 6,445
55,601 55,700 4,265 61,101 61,200 5,365 66,601 66,700 6,465
55,701 55,800 4,285 61,201 61,300 5,385 66,701 66,800 6,485
55,801 55,900 4,305 61,301 61,400 5,405 66,801 66,900 6,505
55,901 56,000 4,325 61,401 61,500 5,425 66,901 67,000 6,525
56,001 56,100 4,345 61,501 61,600 5,445 67,001 67,100 6,545
56,101 56,200 4,365 61,601 61,700 5,465 67,101 67,200 6,565
56,201 56,300 4,385 61,701 61,800 5,485 67,201 67,300 6,585
56,301 56,400 4,405 61,801 61,900 5,505 67,301 67,400 6,605
56,401 56,500 4,425 61,901 62,000 5,525 67,401 67,500 6,625
56,501 56,600 4,445 62,001 62,100 5,545 67,501 67,600 6,645
56,601 56,700 4,465 62,101 62,200 5,565 67,601 67,700 6,665
56,701 56,800 4,485 62,201 62,300 5,585 67,701 67,800 6,685
56,801 56,900 4,505 62,301 62,400 5,605 67,801 67,900 6,705
56,901 57,000 4,525 62,401 62,500 5,625 67,901 68,000 6,725
57,001 57,100 4,545 62,501 62,600 5,645 68,001 68,100 6,745
57,101 57,200 4,565 62,601 62,700 5,665 68,101 68,200 6,765
57,201 57,300 4,585 62,701 62,800 5,685 68,201 68,300 6,785
57,301 57,400 4,605 62,801 62,900 5,705 68,301 68,400 6,805
57,401 57,500 4,625 62,901 63,000 5,725 68,401 68,500 6,825
57,501 57,600 4,645 63,001 63,100 5,745 68,501 68,600 6,845
57,601 57,700 4,665 63,101 63,200 5,765 68,601 68,700 6,865
57,701 57,800 4,685 63,201 63,300 5,785 68,701 68,800 6,885
57,801 57,900 4,705 63,301 63,400 5,805 68,801 68,900 6,905
57,901 58,000 4,725 63,401 63,500 5,825 68,901 69,000 6,925
58,001 58,100 4,745 63,501 63,600 5,845 69,001 69,100 6,945
58,101 58,200 4,765 63,601 63,700 5,865 69,101 69,200 6,965
58,201 58,300 4,785 63,701 63,800 5,885 69,201 69,300 6,985
58,301 58,400 4,805 63,801 63,900 5,905 69,301 69,400 7,005
58,401 58,500 4,825 63,901 64,000 5,925 69,401 69,500 7,025
58,501 58,600 4,845 64,001 64,100 5,945 69,501 69,600 7,045
58,601 58,700 4,865 64,101 64,200 5,965 69,601 69,700 7,065
58,701 58,800 4,885 64,201 64,300 5,985 69,701 69,800 7,085
58,801 58,900 4,905 64,301 64,400 6,005 69,801 69,900 7,105
58,901 59,000 4,925 64,401 64,500 6,025 69,901 70,000 7,125
59,001 59,100 4,945 64,501 64,600 6,045 70,001 70,100 7,145
59,101 59,200 4,965 64,601 64,700 6,065 70,101 70,200 7,165
59,201 59,300 4,985 64,701 64,800 6,085 70,201 70,300 7,185
59,301 59,400 5,005 64,801 64,900 6,105 70,301 70,400 7,205
59,401 59,500 5,025 64,901 65,000 6,125 70,401 70,500 7,225
59,501 59,600 5,045 65,001 65,100 6,145 70,501 70,600 7,245
59,601 59,700 5,065 65,101 65,200 6,165 70,601 70,700 7,265
59,701 59,800 5,085 65,201 65,300 6,185 70,701 70,800 7,285
59,801 59,900 5,105 65,301 65,400 6,205 70,801 70,900 7,305
59,901 60,000 5,125 65,401 65,500 6,225 70,901 71,000 7,325
60,001 60,100 5,145 65,501 65,600 6,245 71,001 71,100 7,345
60,101 60,200 5,165 65,601 65,700 6,265 71,101 71,200 7,365
60,201 60,300 5,185 65,701 65,800 6,285 71,201 71,300 7,385
60,301 60,400 5,205 65,801 65,900 6,305 71,301 71,400 7,405
60,401 60,500 5,225 65,901 66,000 6,325 71,401 71,500 7,425
60,501 60,600 5,245 66,001 66,100 6,345 71,501 71,600 7,445
60,601 60,700 5,265 66,101 66,200 6,365 71,601 71,700 7,465
71,701 71,800 7,485 77,201 77,300 8,585 82,701 82,800 9,685
71,801 71,900 7,505 77,301 77,400 8,605 82,801 82,900 9,705
71,901 72,000 7,525 77,401 77,500 8,625 82,901 83,000 9,725
72,001 72,100 7,545 77,501 77,600 8,645 83,001 83,100 9,745
72,101 72,200 7,565 77,601 77,700 8,665 83,101 83,200 9,765
72,201 72,300 7,585 77,701 77,800 8,685 83,201 83,300 9,785
72,301 72,400 7,605 77,801 77,900 8,705 83,301 83,400 9,808
72,401 72,500 7,625 77,901 78,000 8,725 83,401 83,500 9,833
72,501 72,600 7,645 78,001 78,100 8,745 83,501 83,600 9,858
72,601 72,700 7,665 78,101 78,200 8,765 83,601 83,700 9,883
72,701 72,800 7,685 78,201 78,300 8,785 83,701 83,800 9,908
72,801 72,900 7,705 78,301 78,400 8,805 83,801 83,900 9,933
72,901 73,000 7,725 78,401 78,500 8,825 83,901 84,000 9,958
73,001 73,100 7,745 78,501 78,600 8,845 84,001 84,100 9,983
73,101 73,200 7,765 78,601 78,700 8,865 84,101 84,200 10,008
73,201 73,300 7,785 78,701 78,800 8,885 84,201 84,300 10,033
73,301 73,400 7,805 78,801 78,900 8,905 84,301 84,400 10,058
73,401 73,500 7,825 78,901 79,000 8,925 84,401 84,500 10,083
73,501 73,600 7,845 79,001 79,100 8,945 84,501 84,600 10,108
73,601 73,700 7,865 79,101 79,200 8,965 84,601 84,700 10,133
73,701 73,800 7,885 79,201 79,300 8,985 84,701 84,800 10,158
73,801 73,900 7,905 79,301 79,400 9,005 84,801 84,900 10,183
73,901 74,000 7,925 79,401 79,500 9,025 84,901 85,000 10,208
74,001 74,100 7,945 79,501 79,600 9,045 85,001 85,100 10,233
74,101 74,200 7,965 79,601 79,700 9,065 85,101 85,200 10,258
74,201 74,300 7,985 79,701 79,800 9,085 85,201 85,300 10,283
74,301 74,400 8,005 79,801 79,900 9,105 85,301 85,400 10,308
74,401 74,500 8,025 79,901 80,000 9,125 85,401 85,500 10,333
74,501 74,600 8,045 80,001 80,100 9,145 85,501 85,600 10,358
74,601 74,700 8,065 80,101 80,200 9,165 85,601 85,700 10,383
74,701 74,800 8,085 80,201 80,300 9,185 85,701 85,800 10,408
74,801 74,900 8,105 80,301 80,400 9,205 85,801 85,900 10,433
74,901 75,000 8,125 80,401 80,500 9,225 85,901 86,000 10,458
75,001 75,100 8,145 80,501 80,600 9,245 86,001 86,100 10,483
75,101 75,200 8,165 80,601 80,700 9,265 86,101 86,200 10,508
75,201 75,300 8,185 80,701 80,800 9,285 86,201 86,300 10,533
75,301 75,400 8,205 80,801 80,900 9,305 86,301 86,400 10,558
75,401 75,500 8,225 80,901 81,000 9,325 86,401 86,500 10,583
75,501 75,600 8,245 81,001 81,100 9,345 86,501 86,600 10,608
75,601 75,700 8,265 81,101 81,200 9,365 86,601 86,700 10,633
75,701 75,800 8,285 81,201 81,300 9,385 86,701 86,800 10,658
75,801 75,900 8,305 81,301 81,400 9,405 86,801 86,900 10,683
75,901 76,000 8,325 81,401 81,500 9,425 86,901 87,000 10,708
76,001 76,100 8,345 81,501 81,600 9,445 87,001 87,100 10,733
76,101 76,200 8,365 81,601 81,700 9,465 87,101 87,200 10,758
76,201 76,300 8,385 81,701 81,800 9,485 87,201 87,300 10,783
76,301 76,400 8,405 81,801 81,900 9,505 87,301 87,400 10,808
76,401 76,500 8,425 81,901 82,000 9,525 87,401 87,500 10,833
76,501 76,600 8,445 82,001 82,100 9,545 87,501 87,600 10,858
76,601 76,700 8,465 82,101 82,200 9,565 87,601 87,700 10,883
76,701 76,800 8,485 82,201 82,300 9,585 87,701 87,800 10,908
76,801 76,900 8,505 82,301 82,400 9,605 87,801 87,900 10,933
76,901 77,000 8,525 82,401 82,500 9,625 87,901 88,000 10,958
77,001 77,100 8,545 82,501 82,600 9,645 88,001 88,100 10,983
77,101 77,200 8,565 82,601 82,700 9,665 88,101 88,200 11,008
88,201 88,300 11,033 93,701 93,800 12,408 99,201 99,300 13,783
88,301 88,400 11,058 93,801 93,900 12,433 99,301 99,400 13,808
88,401 88,500 11,083 93,901 94,000 12,458 99,401 99,500 13,833
88,501 88,600 11,108 94,001 94,100 12,483 99,501 99,600 13,858
88,601 88,700 11,133 94,101 94,200 12,508 99,601 99,700 13,883
88,701 88,800 11,158 94,201 94,300 12,533 99,701 99,800 13,908
88,801 88,900 11,183 94,301 94,400 12,558 99,801 99,900 13,933
88,901 89,000 11,208 94,401 94,500 12,583 99,901 100,000 13,958
89,001 89,100 11,233 94,501 94,600 12,608 100,001 100,100 13,983
89,101 89,200 11,258 94,601 94,700 12,633 100,101 100,200 14,008
89,201 89,300 11,283 94,701 94,800 12,658 100,201 100,300 14,033
89,301 89,400 11,308 94,801 94,900 12,683 100,301 100,400 14,058
89,401 89,500 11,333 94,901 95,000 12,708 100,401 100,500 14,083
89,501 89,600 11,358 95,001 95,100 12,733 100,501 100,600 14,108
89,601 89,700 11,383 95,101 95,200 12,758 100,601 100,700 14,133
89,701 89,800 11,408 95,201 95,300 12,783 100,701 100,800 14,158
89,801 89,900 11,433 95,301 95,400 12,808 100,801 100,900 14,183
89,901 90,000 11,458 95,401 95,500 12,833 100,901 101,000 14,208
90,001 90,100 11,483 95,501 95,600 12,858 101,001 101,100 14,233
90,101 90,200 11,508 95,601 95,700 12,883 101,101 101,200 14,258
90,201 90,300 11,533 95,701 95,800 12,908 101,201 101,300 14,283
90,301 90,400 11,558 95,801 95,900 12,933 101,301 101,400 14,308
90,401 90,500 11,583 95,901 96,000 12,958 101,401 101,500 14,333
90,501 90,600 11,608 96,001 96,100 12,983 101,501 101,600 14,358
90,601 90,700 11,633 96,101 96,200 13,008 101,601 101,700 14,383
90,701 90,800 11,658 96,201 96,300 13,033 101,701 101,800 14,408
90,801 90,900 11,683 96,301 96,400 13,058 101,801 101,900 14,433
90,901 91,000 11,708 96,401 96,500 13,083 101,901 102,000 14,458
91,001 91,100 11,733 96,501 96,600 13,108 102,001 102,100 14,483
91,101 91,200 11,758 96,601 96,700 13,133 102,101 102,200 14,508
91,201 91,300 11,783 96,701 96,800 13,158 102,201 102,300 14,533
91,301 91,400 11,808 96,801 96,900 13,183 102,301 102,400 14,558
91,401 91,500 11,833 96,901 97,000 13,208 102,401 102,500 14,583
91,501 91,600 11,858 97,001 97,100 13,233 102,501 102,600 14,608
91,601 91,700 11,883 97,101 97,200 13,258 102,601 102,700 14,633
91,701 91,800 11,908 97,201 97,300 13,283 102,701 102,800 14,658
91,801 91,900 11,933 97,301 97,400 13,308 102,801 102,900 14,683
91,901 92,000 11,958 97,401 97,500 13,333 102,901 103,000 14,708
92,001 92,100 11,983 97,501 97,600 13,358 103,001 103,100 14,733
92,101 92,200 12,008 97,601 97,700 13,383 103,101 103,200 14,758
92,201 92,300 12,033 97,701 97,800 13,408 103,201 103,300 14,783
92,301 92,400 12,058 97,801 97,900 13,433 103,301 103,400 14,808
92,401 92,500 12,083 97,901 98,000 13,458 103,401 103,500 14,833
92,501 92,600 12,108 98,001 98,100 13,483 103,501 103,600 14,858
92,601 92,700 12,133 98,101 98,200 13,508 103,601 103,700 14,883
92,701 92,800 12,158 98,201 98,300 13,533 103,701 103,800 14,908
92,801 92,900 12,183 98,301 98,400 13,558 103,801 103,900 14,933
92,901 93,000 12,208 98,401 98,500 13,583 103,901 104,000 14,958
93,001 93,100 12,233 98,501 98,600 13,608 104,001 104,100 14,983
93,101 93,200 12,258 98,601 98,700 13,633 104,101 104,200 15,008
93,201 93,300 12,283 98,701 98,800 13,658 104,201 104,300 15,033
93,301 93,400 12,308 98,801 98,900 13,683 104,301 104,400 15,058
93,401 93,500 12,333 98,901 99,000 13,708 104,401 104,500 15,083
93,501 93,600 12,358 99,001 99,100 13,733 104,501 104,600 15,108
93,601 93,700 12,383 99,101 99,200 13,758 104,601 104,700 15,133
104,701 104,800 15,158 110,201 110,300 16,533 115,701 115,800 17,908
104,801 104,900 15,183 110,301 110,400 16,558 115,801 115,900 17,933
104,901 105,000 15,208 110,401 110,500 16,583 115,901 116,000 17,958
105,001 105,100 15,233 110,501 110,600 16,608 116,001 116,100 17,983
105,101 105,200 15,258 110,601 110,700 16,633 116,101 116,200 18,008
105,201 105,300 15,283 110,701 110,800 16,658 116,201 116,300 18,033
105,301 105,400 15,308 110,801 110,900 16,683 116,301 116,400 18,058
105,401 105,500 15,333 110,901 111,000 16,708 116,401 116,500 18,083
105,501 105,600 15,358 111,001 111,100 16,733 116,501 116,600 18,108
105,601 105,700 15,383 111,101 111,200 16,758 116,601 116,700 18,133
105,701 105,800 15,408 111,201 111,300 16,783 116,701 116,800 18,158
105,801 105,900 15,433 111,301 111,400 16,808 116,801 116,900 18,183
105,901 106,000 15,458 111,401 111,500 16,833 116,901 117,000 18,208
106,001 106,100 15,483 111,501 111,600 16,858 117,001 117,100 18,233
106,101 106,200 15,508 111,601 111,700 16,883 117,101 117,200 18,258
106,201 106,300 15,533 111,701 111,800 16,908 117,201 117,300 18,283
106,301 106,400 15,558 111,801 111,900 16,933 117,301 117,400 18,308
106,401 106,500 15,583 111,901 112,000 16,958 117,401 117,500 18,333
106,501 106,600 15,608 112,001 112,100 16,983 117,501 117,600 18,358
106,601 106,700 15,633 112,101 112,200 17,008 117,601 117,700 18,383
106,701 106,800 15,658 112,201 112,300 17,033 117,701 117,800 18,408
106,801 106,900 15,683 112,301 112,400 17,058 117,801 117,900 18,433
106,901 107,000 15,708 112,401 112,500 17,083 117,901 118,000 18,458
107,001 107,100 15,733 112,501 112,600 17,108 118,001 118,100 18,483
107,101 107,200 15,758 112,601 112,700 17,133 118,101 118,200 18,508
107,201 107,300 15,783 112,701 112,800 17,158 118,201 118,300 18,533
107,301 107,400 15,808 112,801 112,900 17,183 118,301 118,400 18,558
107,401 107,500 15,833 112,901 113,000 17,208 118,401 118,500 18,583
107,501 107,600 15,858 113,001 113,100 17,233 118,501 118,600 18,608
107,601 107,700 15,883 113,101 113,200 17,258 118,601 118,700 18,633
107,701 107,800 15,908 113,201 113,300 17,283 118,701 118,800 18,658
107,801 107,900 15,933 113,301 113,400 17,308 118,801 118,900 18,683
107,901 108,000 15,958 113,401 113,500 17,333 118,901 119,000 18,708
108,001 108,100 15,983 113,501 113,600 17,358 119,001 119,100 18,733
108,101 108,200 16,008 113,601 113,700 17,383 119,101 119,200 18,758
108,201 108,300 16,033 113,701 113,800 17,408 119,201 119,300 18,783
108,301 108,400 16,058 113,801 113,900 17,433 119,301 119,400 18,808
108,401 108,500 16,083 113,901 114,000 17,458 119,401 119,500 18,833
108,501 108,600 16,108 114,001 114,100 17,483 119,501 119,600 18,858
108,601 108,700 16,133 114,101 114,200 17,508 119,601 119,700 18,883
108,701 108,800 16,158 114,201 114,300 17,533 119,701 119,800 18,908
108,801 108,900 16,183 114,301 114,400 17,558 119,801 119,900 18,933
108,901 109,000 16,208 114,401 114,500 17,583 119,901 120,000 18,958
109,001 109,100 16,233 114,501 114,600 17,608 120,001 120,100 18,983
109,101 109,200 16,258 114,601 114,700 17,633 120,101 120,200 19,008
109,201 109,300 16,283 114,701 114,800 17,658 120,201 120,300 19,033
109,301 109,400 16,308 114,801 114,900 17,683 120,301 120,400 19,058
109,401 109,500 16,333 114,901 115,000 17,708 120,401 120,500 19,083
109,501 109,600 16,358 115,001 115,100 17,733 120,501 120,600 19,108
109,601 109,700 16,383 115,101 115,200 17,758 120,601 120,700 19,133
109,701 109,800 16,408 115,201 115,300 17,783 120,701 120,800 19,158
109,801 109,900 16,433 115,301 115,400 17,808 120,801 120,900 19,183
109,901 110,000 16,458 115,401 115,500 17,833 120,901 121,000 19,208
110,001 110,100 16,483 115,501 115,600 17,858 121,001 121,100 19,233
110,101 110,200 16,508 115,601 115,700 17,883 121,101 121,200 19,258
121,201 121,300 19,283 126,701 126,800 20,748 132,201 132,300 22,398
121,301 121,400 19,308 126,801 126,900 20,778 132,301 132,400 22,428
121,401 121,500 19,333 126,901 127,000 20,808 132,401 132,500 22,458
121,501 121,600 19,358 127,001 127,100 20,838 132,501 132,600 22,488
121,601 121,700 19,383 127,101 127,200 20,868 132,601 132,700 22,518
121,701 121,800 19,408 127,201 127,300 20,898 132,701 132,800 22,548
121,801 121,900 19,433 127,301 127,400 20,928 132,801 132,900 22,578
121,901 122,000 19,458 127,401 127,500 20,958 132,901 133,000 22,608
122,001 122,100 19,483 127,501 127,600 20,988 133,001 133,100 22,638
122,101 122,200 19,508 127,601 127,700 21,018 133,101 133,200 22,668
122,201 122,300 19,533 127,701 127,800 21,048 133,201 133,300 22,698
122,301 122,400 19,558 127,801 127,900 21,078 133,301 133,400 22,728
122,401 122,500 19,583 127,901 128,000 21,108 133,401 133,500 22,758
122,501 122,600 19,608 128,001 128,100 21,138 133,501 133,600 22,788
122,601 122,700 19,633 128,101 128,200 21,168 133,601 133,700 22,818
122,701 122,800 19,658 128,201 128,300 21,198 133,701 133,800 22,848
122,801 122,900 19,683 128,301 128,400 21,228 133,801 133,900 22,878
122,901 123,000 19,708 128,401 128,500 21,258 133,901 134,000 22,908
123,001 123,100 19,733 128,501 128,600 21,288 134,001 134,100 22,938
123,101 123,200 19,758 128,601 128,700 21,318 134,101 134,200 22,968
123,201 123,300 19,783 128,701 128,800 21,348 134,201 134,300 22,998
123,301 123,400 19,808 128,801 128,900 21,378 134,301 134,400 23,028
123,401 123,500 19,833 128,901 129,000 21,408 134,401 134,500 23,058
123,501 123,600 19,858 129,001 129,100 21,438 134,501 134,600 23,088
123,601 123,700 19,883 129,101 129,200 21,468 134,601 134,700 23,118
123,701 123,800 19,908 129,201 129,300 21,498 134,701 134,800 23,148
123,801 123,900 19,933 129,301 129,400 21,528 134,801 134,900 23,178
123,901 124,000 19,958 129,401 129,500 21,558 134,901 135,000 23,208
124,001 124,100 19,983 129,501 129,600 21,588 135,001 135,100 23,238
124,101 124,200 20,008 129,601 129,700 21,618 135,101 135,200 23,268
124,201 124,300 20,033 129,701 129,800 21,648 135,201 135,300 23,298
124,301 124,400 20,058 129,801 129,900 21,678 135,301 135,400 23,328
124,401 124,500 20,083 129,901 130,000 21,708 135,401 135,500 23,358
124,501 124,600 20,108 130,001 130,100 21,738 135,501 135,600 23,388
124,601 124,700 20,133 130,101 130,200 21,768 135,601 135,700 23,418
124,701 124,800 20,158 130,201 130,300 21,798 135,701 135,800 23,448
124,801 124,900 20,183 130,301 130,400 21,828 135,801 135,900 23,478
124,901 125,000 20,208 130,401 130,500 21,858 135,901 136,000 23,508
125,001 125,100 20,238 130,501 130,600 21,888 136,001 136,100 23,538
125,101 125,200 20,268 130,601 130,700 21,918 136,101 136,200 23,568
125,201 125,300 20,298 130,701 130,800 21,948 136,201 136,300 23,598
125,301 125,400 20,328 130,801 130,900 21,978 136,301 136,400 23,628
125,401 125,500 20,358 130,901 131,000 22,008 136,401 136,500 23,658
125,501 125,600 20,388 131,001 131,100 22,038 136,501 136,600 23,688
125,601 125,700 20,418 131,101 131,200 22,068 136,601 136,700 23,718
125,701 125,800 20,448 131,201 131,300 22,098 136,701 136,800 23,748
125,801 125,900 20,478 131,301 131,400 22,128 136,801 136,900 23,778
125,901 126,000 20,508 131,401 131,500 22,158 136,901 137,000 23,808
126,001 126,100 20,538 131,501 131,600 22,188 137,001 137,100 23,838
126,101 126,200 20,568 131,601 131,700 22,218 137,101 137,200 23,868
126,201 126,300 20,598 131,701 131,800 22,248 137,201 137,300 23,898
126,301 126,400 20,628 131,801 131,900 22,278 137,301 137,400 23,928
126,401 126,500 20,658 131,901 132,000 22,308 137,401 137,500 23,958
126,501 126,600 20,688 132,001 132,100 22,338 137,501 137,600 23,988
126,601 126,700 20,718 132,101 132,200 22,368 137,601 137,700 24,018
137,701 137,800 24,048 143,201 143,300 25,698 148,701 148,800 27,348
137,801 137,900 24,078 143,301 143,400 25,728 148,801 148,900 27,378
137,901 138,000 24,108 143,401 143,500 25,758 148,901 149,000 27,408
138,001 138,100 24,138 143,501 143,600 25,788 149,001 149,100 27,438
138,101 138,200 24,168 143,601 143,700 25,818 149,101 149,200 27,468
138,201 138,300 24,198 143,701 143,800 25,848 149,201 149,300 27,498
138,301 138,400 24,228 143,801 143,900 25,878 149,301 149,400 27,528
138,401 138,500 24,258 143,901 144,000 25,908 149,401 149,500 27,558
138,501 138,600 24,288 144,001 144,100 25,938 149,501 149,600 27,588
138,601 138,700 24,318 144,101 144,200 25,968 149,601 149,700 27,618
138,701 138,800 24,348 144,201 144,300 25,998 149,701 149,800 27,648
138,801 138,900 24,378 144,301 144,400 26,028 149,801 149,900 27,678
138,901 139,000 24,408 144,401 144,500 26,058 149,901 150,000 27,708
139,001 139,100 24,438 144,501 144,600 26,088 150,001 150,100 27,738
139,101 139,200 24,468 144,601 144,700 26,118 150,101 150,200 27,768
139,201 139,300 24,498 144,701 144,800 26,148 150,201 150,300 27,798
139,301 139,400 24,528 144,801 144,900 26,178 150,301 150,400 27,828
139,401 139,500 24,558 144,901 145,000 26,208 150,401 150,500 27,858
139,501 139,600 24,588 145,001 145,100 26,238 150,501 150,600 27,888
139,601 139,700 24,618 145,101 145,200 26,268 150,601 150,700 27,918
139,701 139,800 24,648 145,201 145,300 26,298 150,701 150,800 27,948
139,801 139,900 24,678 145,301 145,400 26,328 150,801 150,900 27,978
139,901 140,000 24,708 145,401 145,500 26,358 150,901 151,000 28,008
140,001 140,100 24,738 145,501 145,600 26,388 151,001 151,100 28,038
140,101 140,200 24,768 145,601 145,700 26,418 151,101 151,200 28,068
140,201 140,300 24,798 145,701 145,800 26,448 151,201 151,300 28,098
140,301 140,400 24,828 145,801 145,900 26,478 151,301 151,400 28,128
140,401 140,500 24,858 145,901 146,000 26,508 151,401 151,500 28,158
140,501 140,600 24,888 146,001 146,100 26,538 151,501 151,600 28,188
140,601 140,700 24,918 146,101 146,200 26,568 151,601 151,700 28,218
140,701 140,800 24,948 146,201 146,300 26,598 151,701 151,800 28,248
140,801 140,900 24,978 146,301 146,400 26,628 151,801 151,900 28,278
140,901 141,000 25,008 146,401 146,500 26,658 151,901 152,000 28,308
141,001 141,100 25,038 146,501 146,600 26,688 152,001 152,100 28,338
141,101 141,200 25,068 146,601 146,700 26,718 152,101 152,200 28,368
141,201 141,300 25,098 146,701 146,800 26,748 152,201 152,300 28,398
141,301 141,400 25,128 146,801 146,900 26,778 152,301 152,400 28,428
141,401 141,500 25,158 146,901 147,000 26,808 152,401 152,500 28,458
141,501 141,600 25,188 147,001 147,100 26,838 152,501 152,600 28,488
141,601 141,700 25,218 147,101 147,200 26,868 152,601 152,700 28,518
141,701 141,800 25,248 147,201 147,300 26,898 152,701 152,800 28,548
141,801 141,900 25,278 147,301 147,400 26,928 152,801 152,900 28,578
141,901 142,000 25,308 147,401 147,500 26,958 152,901 153,000 28,608
142,001 142,100 25,338 147,501 147,600 26,988 153,001 153,100 28,638
142,101 142,200 25,368 147,601 147,700 27,018 153,101 153,200 28,668
142,201 142,300 25,398 147,701 147,800 27,048 153,201 153,300 28,698
142,301 142,400 25,428 147,801 147,900 27,078 153,301 153,400 28,728
142,401 142,500 25,458 147,901 148,000 27,108 153,401 153,500 28,758
142,501 142,600 25,488 148,001 148,100 27,138 153,501 153,600 28,788
142,601 142,700 25,518 148,101 148,200 27,168 153,601 153,700 28,818
142,701 142,800 25,548 148,201 148,300 27,198 153,701 153,800 28,848
142,801 142,900 25,578 148,301 148,400 27,228 153,801 153,900 28,878
142,901 143,000 25,608 148,401 148,500 27,258 153,901 154,000 28,908
143,001 143,100 25,638 148,501 148,600 27,288 154,001 154,100 28,938
143,101 143,200 25,668 148,601 148,700 27,318 154,101 154,200 28,968
154,201 154,300 28,998 158,601 158,700 30,318 163,001 163,100 31,638
154,301 154,400 29,028 158,701 158,800 30,348 163,101 163,200 31,668
154,401 154,500 29,058 158,801 158,900 30,378 163,201 163,300 31,698
154,501 154,600 29,088 158,901 159,000 30,408 163,301 163,400 31,728
154,601 154,700 29,118 159,001 159,100 30,438 163,401 163,500 31,758
154,701 154,800 29,148 159,101 159,200 30,468 163,501 163,600 31,788
154,801 154,900 29,178 159,201 159,300 30,498 163,601 163,700 31,818
154,901 155,000 29,208 159,301 159,400 30,528 163,701 163,800 31,848
155,001 155,100 29,238 159,401 159,500 30,558 163,801 163,900 31,878
155,101 155,200 29,268 159,501 159,600 30,588 163,901 164,000 31,908
155,201 155,300 29,298 159,601 159,700 30,618 164,001 164,100 31,938
155,301 155,400 29,328 159,701 159,800 30,648 164,101 164,200 31,968
155,401 155,500 29,358 159,801 159,900 30,678 164,201 164,300 31,998
155,501 155,600 29,388 159,901 160,000 30,708 164,301 164,400 32,028
155,601 155,700 29,418 160,001 160,100 30,738 164,401 164,500 32,058
155,701 155,800 29,448 160,101 160,200 30,768 164,501 164,600 32,088
155,801 155,900 29,478 160,201 160,300 30,798 164,601 164,700 32,118
155,901 156,000 29,508 160,301 160,400 30,828 164,701 164,800 32,148
156,001 156,100 29,538 160,401 160,500 30,858 164,801 164,900 32,178
156,101 156,200 29,568 160,501 160,600 30,888 164,901 165,000 32,208
156,201 156,300 29,598 160,601 160,700 30,918 165,001 165,100 32,238
156,301 156,400 29,628 160,701 160,800 30,948 165,101 165,200 32,268
156,401 156,500 29,658 160,801 160,900 30,978 165,201 165,300 32,298
156,501 156,600 29,688 160,901 161,000 31,008 165,301 165,400 32,328
156,601 156,700 29,718 161,001 161,100 31,038 165,401 165,500 32,358
156,701 156,800 29,748 161,101 161,200 31,068 165,501 165,600 32,388
156,801 156,900 29,778 161,201 161,300 31,098 165,601 165,700 32,418
156,901 157,000 29,808 161,301 161,400 31,128 165,701 165,800 32,448
157,001 157,100 29,838 161,401 161,500 31,158 165,801 165,900 32,478
157,101 157,200 29,868 161,501 161,600 31,188 165,901 166,000 32,508
157,201 157,300 29,898 161,601 161,700 31,218 166,001 166,100 32,538
157,301 157,400 29,928 161,701 161,800 31,248 166,101 166,200 32,568
157,401 157,500 29,958 161,801 161,900 31,278 166,201 166,300 32,598
157,501 157,600 29,988 161,901 162,000 31,308 166,301 166,400 32,628
157,601 157,700 30,018 162,001 162,100 31,338 166,401 166,500 32,658
157,701 157,800 30,048 162,101 162,200 31,368 166,501 166,600 32,688
157,801 157,900 30,078 162,201 162,300 31,398 166,601 166,700 32,718
157,901 158,000 30,108 162,301 162,400 31,428 166,701 166,800 32,748
158,001 158,100 30,138 162,401 162,500 31,458 166,801 166,900 32,778
158,101 158,200 30,168 162,501 162,600 31,488 166,901 167,000 32,808
158,201 158,300 30,198 162,601 162,700 31,518 167,001 167,100 32,838
158,301 158,400 30,228 162,701 162,800 31,548 167,101 167,200 32,868
158,401 158,500 30,258 162,801 162,900 31,578 167,201 167,300 32,898
158,501 158,600 30,288 162,901 163,000 31,608 167,301 167,400 32,928
How to compute TDS, if the monthly salary income exceeds
Nu.167,400
Monthly Salary after subtracting PF and GIS XXXXX

( - ) Subtract 125,000
That gives you XXXXX (A)
Multiply A by 30%
Equals to XXXXX (B)
Add to B 20,208 (C)
Monthly TDS to be deducted (B ) + ( C )
Instructions:
a) All employers must deduct TDS as per rates given in the

Schedule at the time of disbursement and deposit the same
to the nearest RRCO or into a RGR account on or before the
10th of the following month.
b) Where an employer is not under any legal obligation to

deduct TDS from its employees, the individual that is, the
employee shall be responsible for paying the tax as per
rates prescribed in the schedule to the concerned RRCO on
a quarterly basis.
c) Failure to deduct/deposit TDS shall result in fines and

penalties as per Chapter 5 of the General Provisions of the
Income Tax Act of the Kingdom of Bhutan, 2001.
d) For more details, see Rule No. 60(2)(b)(i) of the General

Provisions.
ANNEXURE- 1A
INSURANCE PREMIUM
Sl. No Insurance Schemes % of deduction

1 Limited Payment Life Insurance 100%
2 Silver Jubilee Term Insurance 100%
3 Term Insurance 100%
4 New Life Annity Scheme 100%
ANNEXURE- 1B
INSURANCE PREMIUM
Sl. No Insurance Schemes % of deduction

1 Double Endowment 50%
2 Double Covver Endowment 50%
3 Education Annuity 50%
4 Children Anticipated Policy 50%
5 Endowment Assurance 50%
6 Money Back Policy 50%
7 Ashi Nangsa Living Policy 50%
8 Millennium Education Policy 50%
9 Endowment Assurance Plan for Minors 50%
Endowment Cover Endowment Plan-
10 50%
without profit
11 Drongseb Kuendrel Tshe-sog Ngensung 50%
Endowment Plan for Seniour Citizens-
12 50%
with guarnateed additions
Pho-Mo Joint Life Endowment
13 50%
Assurance
14 Gaki Pelzom Life Policy 50%
15 Ten-Tsai Mangual Ngenchoel 50%
16 Quendue Ngensung Life Policy 50%
Royal Government of Bhutan
Department of Revenue & Customs
Ministry of Finance
Phone #: PABX : 335338/322319/333509/32560
Fax No. : 323608
ISBN 99936-606-1-2
188 | Rules on the Income
Printed Tax Act of the
at KUENSEL Kingdom of
Corporation Bhutan 2001
Ltd.

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RULES ON THE INCOME TAX ACT OF THE

KINGDOM OF BHUTAN 2001

Fifth Edition 2020

Fifth Edition 2020

The Ministry of Finance is pleased to bring out 5th edition of the

The revised Rules supersede all previous circulars, notifications

The revised Rules also define the legal responsibilities of the

Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | i

ii | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

Part I Corporate Income Tax (CIT).................................. 2

Part II Business Income Tax.............................................. 36

Part III Personal Income Tax (PIT).................................. 46

Part IV Tax on Lottery Winning....................................... 72

iv | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | v

vi | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

In exercise of powers conferred by the Income Tax Act of the

Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | 1

Rates & Calculation of Income Tax

4. The rate and calculation of tax shall be as per the Rules

(1) Full Tax Liability

(2) Limited Tax Liability

2 | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

(4) Adjustment of Provisional Taxes

Provisional taxes paid in excess of final taxes shall be

Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | 3

Registration of Taxpayers and Filing of Tax Return

5. The registration of tax payers and filing of tax return shall

Companies can register with the RRCO, either by

Location of RRCOs and their area or jurisdictions are

4 | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

(2) Change of Registration from One RRCO to Another

Where permission for transfer of a taxpayer’s

Filing of Income Tax Return

6. All companies must submit their return, on a self­

Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | 5

Failure to file the income tax return as required shall attract

Correction of Tax Return

7. A taxpayer may correct their tax return within 15 days from

(1) the taxpayer submits written request for extension

6 | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

Request for extension beyond 31st May shall be forwarded

Tax Holidays and Incentives

9. The Ministry of Finance may announce, from time to

10. The allowable deductions shall be as per the Rules prescribed

In order to qualify as an allowable deduction an

Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | 7

Where only part of an expense has been incurred for

Any expenses charged in excess of the limits prescribed

Allowable deductions are grouped into the following

(2) Direct Costs

8 | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

(3) Employment Expenses

Rules on the Income Tax Act of the Kingdom of Bhutan 2001 | 9

10 | Rules on the Income Tax Act of the Kingdom of Bhutan 2001

6. All companies must submit their return, on a self