What is Personal Income Tax

Personal Income Tax is a tax on income derived from the following sources:

• Salary Income from employment and consultancy services
• Rental Income from real property
• Dividend Income from shareholdings
• Interest Income from fixed deposits
• Cash Crop Income from apple/orange/cardamom orchards
• Income from Other Sources, i.e. hire of privately owned vehicles, plants, machinery and from intellectual rights

Who is liable to pay Personal Income Tax?

• Bhutanese citizens
• Residents, and
• Any other persons earning personal income from sources in Bhutan mentioned above.

Any income earned from 1st January 2002 shall be subject to PIT.

What are the tax rates?

The following rates are applied on the Net Taxable Income:

• First Nu.100,000 (basic exemption) - Nil
• Next Nu.250,000 - 10%
• Next Nu.500,000 - 15%
• Next Nu.1000,000 - 20%
• Nu.1000,001 & above - 25%

PIT Registration

All citizens above 18 years of age and residents having personal income from one or more of the sources during an income year shall register as per the procedures given below:

• The PIT registration FORMPIT-1 may be obtained from any RRCO.
• The Completed form shall be submitted latest by 31st December to any of the RRCOs mentioned below.A person must mention in the Registration form the RRCO where he/she would like to be registered as a taxpayer.This may be any one of the RRCOs where the person has a source of income.

  SI.No	RRCO	Dzongkhags
  1	Thimphu	Thimphu,Punakha,Wangdue Phodrang and Gasa
  2	Paro	Paro and Haa
  3	Phuentsholing	Chukha
  4	Samtse	Samtse
  5	Gelephu	Sarpang,Tsirang,Dagana,Zhemgang,Bumthang and Trongsa
  6	Samdrup Jongkhar	Samdrup Jongkhar and Pemagatshel
  7	Mongar	Trashigang, Lhuentse, Tashi Yangtse and Mongar

• Married couples must choose the same RRCO for registration.
• Citizens ID No./Registration Permit No.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.

Annual Personal Income Tax Return

Citizens above 18 years of age and residents having taxable personal income as mentioned under Rule No.1.1. of this part or persons claiming refund shall file the tax return as per the procedure given below:

• Once registered as a taxpayer under Rule No.7.1 of this part, a taxpayer or an authorised representative must obtain and file the tax return in FORM PIT-2 at the RRCO of registration before 1st March following the income year.
• The tax return form must contain full and correct information regarding the personal income and deductions and must be accompanied by relevant documents such as money receipts and TDS certificates for adjustment of TDS and taxes paid quarterly
• To avoid fines & penalties and to ensure correct computation of taxes and timely refund, it is of paramount importance that the information submitted in FORM PIT-2 is correct and complete.
• Non-declaration,mis-declaration and under declaration of income or deductions and non-compliance shall result in fines and penalties as per Chapter 5 and recovery measures as per Chapter 6 of the Income Tax Act of the Kingdom of Bhutan,2001.