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📘 Kharidar syllabus: Paper II, Section C, Unit 3.4 · Open the full Kharidar course
Unit 3.4 combines three office calculations: tax (VAT), commission and depreciation. Profit, loss and discount are in Profit, Loss and Discount.
1. Value Added Tax (VAT)
- VAT in Nepal is 13%.
- VAT amount = price × 13 ÷ 100. Price with VAT = price × 1.13.
- On Rs 2,000: VAT = Rs 260; price with VAT = Rs 2,260.
- Reverse: price with VAT Rs 1,130 → price before VAT = 1,130 ÷ 1.13 = Rs 1,000; VAT = Rs 130.
- With discount: marked price Rs 1,000, 10% discount → Rs 900; add 13% VAT → 900 × 1.13 = Rs 1,017. VAT is charged on the price after discount.
2. Other taxes (simple percentage)
- Tax = taxable amount × rate ÷ 100.
- Example: a property worth Rs 20,00,000 with tax at 0.5% → tax = Rs 10,000.
- Income tax in Nepal uses slabs; exam questions give the rates in the question.
3. Commission (कमिसन)
- Commission is payment to an agent as a percentage of sales.
- Commission = sales × rate ÷ 100. On sales of Rs 80,000 at 5%: Rs 4,000.
- Sales = commission × 100 ÷ rate. Rs 3,000 at 4% → sales = Rs 75,000.
4. Depreciation (ह्रासकट्टी)
Depreciation is the fall in value of an asset (vehicle, machine, computer) because of use and time.
| Method | Formula | Example |
|---|---|---|
| Straight-line (समान दर) | Annual depreciation = (Cost − Scrap value) ÷ Useful life | (1,00,000 − 10,000) ÷ 5 = Rs 18,000 per year |
| Reducing balance (घट्दो मौज्दात) | Value after n years = Original value × (1 − R/100)ⁿ | 50,000 × (0.9)² = Rs 40,500 after 2 years at 10% |
- After 1 year at 10%: 50,000 × 0.9 = Rs 45,000.
- Total depreciation in 2 years = 50,000 − 40,500 = Rs 9,500.
- Finding the rate: value falls from 80,000 to 72,000 in one year → fall 8,000 → rate = 8,000 ÷ 80,000 × 100 = 10%.
Solved practice problems
- Marked price Rs 4,000, discount 15%, VAT 13%. What does the customer pay? Discount = Rs 600, so the price is Rs 3,400. VAT = 3,400 × 13 ÷ 100 = Rs 442. Customer pays Rs 3,842.
- A bill of Rs 3,390 includes 13% VAT. Find the VAT. Price before VAT = 3,390 ÷ 1.13 = Rs 3,000. VAT = Rs 390.
- An agent gets a salary of Rs 15,000 plus 6% commission on sales of Rs 1,50,000. Find the total income. Commission = Rs 9,000. Total = Rs 24,000.
- A machine costs Rs 5,00,000, has a scrap value of Rs 50,000 and a life of 5 years. Find the book value after 2 years (straight-line method). Yearly depreciation = (5,00,000 − 50,000) ÷ 5 = Rs 90,000. Book value = 5,00,000 − 1,80,000 = Rs 3,20,000.
- A computer worth Rs 2,00,000 depreciates by 10% a year on the reducing balance. Find its value after 2 years. 2,00,000 × 0.9 × 0.9 = Rs 1,62,000. Total depreciation = Rs 38,000.
Mistakes to avoid
- Adding VAT before the discount. Take the discount first, then add VAT on the reduced price.
- Taking 13% of a VAT-inclusive price. On Rs 1,130, VAT is Rs 130, not Rs 146.90. Divide by 1.13 first.
- Mixing the two depreciation methods. Straight-line removes the same amount each year; reducing balance applies the rate to the new value each year.
- Dropping the scrap value. Subtract it before dividing by the life of the asset in the straight-line method.
📌 Key points to remember
- VAT = 13%; price with VAT = price × 1.13; price before VAT = price with VAT ÷ 1.13.
- Apply discount first, then VAT.
- Commission = sales × rate ÷ 100.
- Straight-line: (cost − scrap) ÷ life.
- Reducing balance: P(1 − R/100)ⁿ.
📝 Quiz
Test yourself: Tax, VAT, Commission and Depreciation
15 questions on Value Added Tax (VAT), Commission (कमिसन) and Depreciation (ह्रासकट्टी).
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