Salary is distributed to the employees of government offices against the service rendered by them. The salary is distributed after making a deduction of provident fund, income tax, provident fund loan and citizen investment trust.
This note has information about the distribution of salary in government offices and deductions made on it.
Salary is distributed to the employees of government offices against the service rendered by them. The salary is distributed after making a deduction of provident fund, income tax, provident fund loan and citizen investment trust.
This note has information about the distribution of salary in government offices and deductions made on it.
Things to Remember
Salary is distributed to the employees of government offices against the service rendered by them.
The government determines the amount of salary of each level of employee.
The salary is distributed after making a deduction of provident fund, income tax, provident fund loan and citizen investment trust.
Each employee of government offices should contribute some amount as income tax from their taxable income.
The Income Tax Act has given certain exemption limit of income for tax purpose.
The employees of government offices deposit their provident fund in the account of provident fund office.
Employees’ Provident Fund is the amount collected by deducting from the salary of a permanent employee of government offices, company and corporations.
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Distribution of Salary and Its Deductions
Salary is distributed to the employees of government offices against the service rendered by them. The government determines the amount of salary of each level of employee. The salary is distributed after making a deduction of provident fund, income tax, provident fund loan and citizen investment trust.
Employees' Provident Fund
Employees’ Provident Fund is the amount collected by deducting from the salary of a permanent employee of government offices, company and corporations. The government deducts 10% amount from their salary, contributes equal amount from their salary, and contributes an equal amount which creates the bigger funds. Such fund is collected and mobilized by an office which is called employee provident fund office. This office invests the collected fund in various productive sectors and provides a loan to the concerned employees at a reasonable rate of interest.
The following journal voucher is passed while distributing salary by deducting the employees’ provident fund: Dr. BE Salary Cr. Employee Provident Fund Cr. Nepal Rastra Bank (Being salary distributed after deducting employees’ provident fund)
The following journal voucher is passed while deducting the amount of provident fund: Dr. Employee Provident Fund Cr. Nepal Rastra Bank (Being the amount of income tax deposited in the account of concerned office)
Income Tax
Each employee of government offices should contribute some amount as income tax from their taxable income. The Income Tax Act has given certain exemption limit of income for tax purpose. An employee has to pay income tax on the income over the exemption limit.
The following journal voucher is passed while deducting income tax from the amount of salary: Dr. BE Salary Cr. Income tax Cr. Nepal Rastra Bank (Being salary distributed after deducting income tax)
The following journal voucher is passed while deducting the amount of income tax: Dr. Income tax Cr. Nepal Rastra Bank (Being the amount of income tax deposited in the account of concerned office)
Provident Fund Loan
The employees of government offices deposit their provident fund in the account of provident fund office. They are given a facility to take a loan out of their provident fund deposit. Such a loan can be repaid on an installment basis by making a deduction from their monthly salary.
The following journal voucher is passed while deducting provident fund loan from the amount of salary: Dr. BE Salary Cr. Provident Fund Loan Cr. Nepal Rastra Bank (Being salary distributed after deducting provident fund loan)
The following journal voucher is passed while deducting the amount of provident fund loan: Dr. Provident Fund Loan Cr. Nepal Rastra Bank (Being the amount of provident fund loan deposited in the account of concerned office)
Citizen Investment Fund
Citizen Investment Fund is a voluntary deduction which can be made at a certain rate. The amount collected by way of voluntary deduction is invested in productive sectors. While distributing salary, such deduction is deposited in the office of citizen investment fund.
The following journal voucher is passed while deducting citizen investment fund from the amount of salary: Dr. BE Salary Cr. Citizen Investment Fund Cr. Nepal Rastra Bank (Being salary distributed after deducting citizen investment fund)
The following journal voucher is passed while deducting the amount of citizen investment fund: Dr. Citizen Investment Fund Cr. Nepal Rastra Bank (Being the amount of citizen investment fund deposited in the account of concerned office)
The District Police Office, Chitwan, distributed the total salary for the month of Marga, amounting to Rs. 4,00,000 on 12th Poush after deduction of provident fund of Rs. 90,000, income tax of Rs. 20,000, provident fund loan of Rs. 15,000 and citizen investment fund of Rs. 15,000. The deductions were deposited in the concerned offices on the same day.
Required: Journal Voucher
Government of Nepal
District Police Office
Journal Voucher
AGF No. 10
JV No.
Date: 09-12
Code No.
Particulars
LF
BH No.
Debit Rs.
Credit Rs.
Dr. B.E. Salary
21111
4,00,000
Cr. Provident fund
90,000
Cr. Income tax
20,000
Cr. Provident fund loan
15,000
Cr. Citizen investment fund
15,000
Cr. Nepal Rastra Bank
15,000
(Being salary distributed after deducting provident fund, income tax, provident fund loan and citizen investment fund)
Receipt No:
Amount received:
Submitted by: Mr. ABC
Post: Accountant
Date: 09-12
Cheque No:
Cheque amount: Two lakh sixty thousand only.
Approved by: Mr. XYZ
Post: Office head
Date: 09-12
Government of Nepal
District Police Office
Journal Voucher
AGF No. 10
JV No.
Date: 09-12
Code No.
Particulars
LF
BH No.
Debit Rs.
Credit Rs.
Dr. Provident fund
90,000
Cr. Nepal Rastra Bank
90,000
(Being provident fund deposited in the concerned office
Receipt No:
Amount received:
Submitted by: Mr. ABC
Post: Accountant
Date: 09-12
Cheque No:
Cheque amount: Ninety thousand only.
Approved by: Mr. XYZ
Post: Office head
Date: 09-12
Government of Nepal
District Police Office
Journal Voucher
AGF No. 10
JV No.
Date: 09-12
Code No.
Particulars
LF
BH No.
Debit Rs.
Credit Rs.
Dr. Income tax
20,000
Cr. Nepal Rastra Bank
20,000
(Being income tax deposited in the concerned office.)
Receipt No:
Amount received:
Submitted by: Mr. ABC
Post: Accountant
Date: 09-12
Cheque No:
Cheque amount: Twenty thousand only.
Approved by: Mr. XYZ
Post: Office head
Date: 09-12
Government of Nepal
District Police Office
Journal Voucher
AGF No. 10
JV No.
Date: 09-12
Code No.
Particulars
LF
BH No.
Debit Rs.
Credit Rs.
Dr. Provident fund loan
15,000
Cr. Nepal Rastra Bank
15,000
(Being provident fund loan deposited in the concerned office
Receipt No:
Amount received:
Submitted by: Mr. ABC
Post: Accountant
Date: 09-12
Cheque No:
Cheque amount: Fifteen thousand only.
Approved by: Mr. XYZ
Post: Office head
Date: 09-12
Government of Nepal
District Police Office
Journal Voucher
AGF No. 10
JV No.
Date: 09-12
Code No.
Particulars
LF
BH No.
Debit Rs.
Credit Rs.
Dr. Citizen investment fund
15,000
Cr. Nepal Rastra Bank
15,000
(Being citizen investment fund deposited in the concerned office
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