Personal Income Tax (PIT)
Personal Income Tax (PIT) PIT is a tax levied on the personal income of an individual on an accrual basis from any or more of the following four sources:
(a) Employment Income
monthly basic salary allowances
fees & remuneration
bonus
commission
leave encashment
share of profits received by an employee
consultancy income by an non licensed consultant and
other benefits received free or at a concessional rate.
(b) Rental Income Income earned from real properties such as:
land(s)
building(s)
house(s)
factory building(s)
warehouse(s) and
any other structures generating income.
(c) Dividend Income
Income received from holding of shares in a company registered in Bhutan. However, dividend income does not include dividends received in the form of bonus shares. Dividend income exceeding Nu.30,000 shall be subjected to TDS @ 10% on the whole amount. Dividend income shall be taxed on receipt basis.
(d) Income from Interest
Exempted from income year 2016.
(e) Income from sale of Cash Crop
Exempted from income year 2020.
(f) Income from Other Sources
Income from other sources shall be taxed on accrual basis and it’s income is derived from any of the following sources:
Income from hire of privately owned vehicles, plants and machinery but exluding trucks and taxis;
Income from intellectual property rights such as copy rights, patent, trademark, design, model or any artistic work or scientific work.
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| Income Slab | Tax Rate | |
|---|---|---|
| 1 | Up to Nu. 300,000 | 0% |
| 2 | Nu.300,001 to Nu. 400,000 | 10% |
| 3 | Nu. 400,001 to Nu. 650,000 | 15% |
| 4 | Nu. 650,001 to Nu. 1,000,000 | 20% |
| 5 | Nu. 1,000,001 to Nu. 1,500,000 | 25% |
| 6 | Nu. 1,500,001 and up | 30% |
| Surcharge at the rate of 10% shall be levied on (PIT) | Personal Income Tax, if the annual Personal Income Tax | is equal to or more than Nu. 1,000,000. |
In addition, the following general deductions are given
- Education allowance up to a max of Nu. 350,000 per child.
- Life insurance premium.
- Self education allowance up to a max Nu. 350,000 per taxpayer.
- Donations up to a max of 5% of the total adjusted gross income.
- Sponsored children education expense up to max of Nu. 350,000 per child
Income Sources Specific Deductions/Exemptions
1. Salary Income : Less PF and GIS contributions.
2. Rental Income : Less 20% on repairs and maintenance interest payments, urban taxes and insurance premium.
3. Dividend Income : Less Nu. 30,000 specific exemption and interest on loans for shareholding.
4. Other Income : Less 30% on Gross Other Income.
Bhutanese citizens, residents and any other persons earning gross income exceeding Nu. 300,000 per annum in Bhutan from one or more of the four sources mentioned below shall be liable to pay PIT. The four sources of income are: 1. Salary Income, 2. Rental Income, 3. Dividend Income, and 4. Income from Other Sources.
All citizens above 18 years of age and residents having personal income from one or more of the four sources during an income year shall register either online or by submitting the registration FORM PIT-1. In case of manual registration, the registration form must be submitted to the RRCO where you prefer to be registered as the taxpayer along with a copy of your Citizenship ID card.
Regional Offices:
| Sl. No.: | RRCO | Dzongkhag |
|---|---|---|
| 1 | Thimphu | Thimphu, Wangdue Phodrang, Punakha and Gasa |
| 2 | Paro | Paro and Haa |
| 3 | Phuentsholing | Chukha |
| 4 | Samtse | Samtse |
| 5 | Gelephu | Sarpang, Tsirang, Dagana and Zhemgang |
| 6 | Bumthang | Bumthang and Trongsa |
| 7 | Mongar | Mongar, Lhuentse, Tashigang and Tashi Yangtse |
| 8 | Samdrup Jongkhar | Samdrup Jongkhar and Pema Gatshel |