chhatramani/Nepal-Legal-Text-Corpus-44laws huggingface dataset:
Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 48 : Disposal of property and liability through division
If the rights related to any property owned by or the burdens related to any liability borne by any person devolve on any other person also by way of lease of any property or any part thereof, the following provisions shall apply:-
(a) Where the rights or burdens are permanent, that first person shall be deemed to have disposed of any part of that property or liability but not to have acquired any new property or liability, and
(b) Where the rights or burdens are temporary or contingent, that first person shall be deemed not to have disposed of any part of that property or liability.
Provided that such person shall be deemed to have acquired a new property or assumed a new liability, as the case may be.

Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 49 : Disposal through allocation of incomes and expenses
1) Any person shall, in the following circumstances, allocate the expenses or incomes made in acquiring, bearing or disposing of any property or liability between properties and liabilities on the basis of the market value at the time of acquisition, bearing or disposal, as the case may be:-
a) Where one or more properties are acquired, or one or more liabilities are assumed at the same time,
b) Where one or more properties or liabilities are disposed of at the same time.
2) If any person who holds ownership of any property or bears any liability disposes of any part of that property or liability, the net expenses or net incomes of that property or liability immediately before the disposal has to be allocated in the portion of the disposed property or liability and in the remaining portion, as the case may be, on the basis of the market value thereof immediately after the disposal.

Securities Act 2063

Chapter 9 Special Provisions Relating to Natural Person

Section 50 : Spouse
1) Both a resident natural person and his/her resident husband or wife may, by giving a notice in writing, choose to be treated as one natural person in any specific income year for tax purposes.
2) The husband or wife out of the spouses who choose the provision contained in sub-section (1) in respect of any income year shall be jointly and severally responsible between each other for the tax payable by them in that year.
3) Notwithstanding anything contained in sub-sections (1) and (2), a resident widow or widower responsible for bearing the dependent shall be deemed as a couple.
Securities Act 2063

Chapter 9 Special Provisions Relating to Natural Person

Section 51 : Tax adjustment for medical treatment
1) Any resident natural person may make a claim for adjustment of tax for medical treatment in any income year for the approved medical expenditure incurred by him/herself or through any other person for him/herself.
2) The tax adjustment amount for medical treatment of a natural person in any income year shall also be computed by adding any amount, if any, referred to in sub-section (4) to the amount to be set by fifteen percent of the approved medical treatment expenditure referred to in sub-section (1).
3) Notwithstanding anything contained in sub-section (2), the amount of tax adjustment for medical treatment claimed by a natural person in any income year shall not exceed the prescribed limit.
4) In the case of any natural person in any income year, the excess amounts as mentioned in clauses (a) and (b), up to the following limit, may be carried forward and be included in the amount referred to in Sub-section (2) in the forthcoming years:-
a) Where the amount referred to in Sub-section (2) exceeds the limit referred to in Sub-section (3), the amount of such excess and
b) The amount to the extent that the person referred to in clause (a) of Section 3 is not allowed to use tax adjustment for medical treatment because of being less the amount of tax payable by that person in that year.
Explanation
: For purposes of this Section, “approved medical treatment expenditure” means the approved medical treatment expenditure as prescribed.

Securities Act 2063

Chapter 10 Special Provisions for Entities

Section 52 : Principles of taxation applicable in respect of entities
1) For purposes of payment of tax, any entity shall be responsible distinctly from its beneficiaries.
2) Distributions to be made by an entity shall be as mentioned in Section 53, and in distribution to be so made, tax shall be imposed on its beneficiaries pursuant to Section 54.
3) The amounts derived by and expenses borne by an entity shall be deemed to have been received or borne by the entity irrespective of whether or not the entity has derived the same or borne expenses for another person.
4) A property under the ownership of an entity and the liability borne by it shall be deemed to be under the ownership or burden of the entity. Such property under ownership and liability borne shall not be deemed to be under the ownership or burden of any other person.
5) Foreign income tax paid by the manager, the beneficiary of an entity or the entity, whosoever, for the income of the entity shall be deemed to have been paid by the entity.
6) Transactions between any entity and its managers and beneficiaries shall be recognised subject to Chapter 7 and Section 45
Securities Act 2063

Chapter 10 Special Provisions for Entities

Section 53 : Distribution by entity
1) The following matters have to be included in the distribution to be made by an entity:-
a) Payment made by the entity to any of its beneficiaries in any capacity or
b) Capitalisation of profits.
2) Notwithstanding anything contained in sub-section (1), any payment referred to in clause (a) of that sub-section shall be deemed to have been distributed only in the following circumstances:-
a) Where the payment exceeds the amount paid by a beneficiary to the entity in exchange for a consideration likely to be obtained from the entity, and
b) Where the following amounts are not included in the payment:-
(1) The amounts included in computing the income of the beneficiary,
(2) The payments from which tax has been deducted finally except for reason of distribution.
3) Only if the distribution of any entity reduces the value of property or liability of that entity, such distribution shall be deemed to be a distribution of profits or return of capital.
4) In any of the following circumstances, a distribution of any entity shall be deemed to be a distribution of profits, subject to Section 55:-
a) Where the distribution is of a type referred to in sub-section (3) and the amount as per the market value of the property exceeds the total amount of capital contribution consisting of the market value of the liability of the entity at the time of distribution and of capitalised profits, as well,
b) Where profits are capitalised.
5) The distribution referred to in sub-section (3) shall be deemed to be a return of capital to the extent of non-distribution of profits.
6) The distribution of any entity shall be deemed to be a dividend of that entity to the extent of non-return of capital.
Explanation:
For purposes of this Section, “capitalisation of profits” means and includes any capitalisation made by issuing bonus shares or similar other interest increasing the paid-up sum of the interest of that entity or crediting the profits to the premium and capital account of that entity.

Securities Act 2063

Chapter 10 Special Provisions for Entities

Section 54 : Tax in dividend
1) On the dividend distributed by a resident body, it shall be as follows:-
a) If the dividend is distributed to the shareholder of any company or partner of any partnership firm, tax shall be imposed on a shareholder of any company as per the mode of final tax deduction and
b) No tax shall be imposed on distribution, if any, made by other entities.
2) The dividend distributed by any non-resident person to any resident beneficiary shall be included in the income of the beneficiary and tax imposed accordingly.
3) Notwithstanding anything contained in sub-section (1), no tax shall be levied on the dividend received after tax deduction if it is distributed.
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4) …………..
5) The incomes referred to in Chapter 8 receivable for the interest of a beneficiary of an entity have to include the amount for capital return made by any entity for that interest.
Provided that the dividend distributed by the entity is not required to be included.
1 Removed by the Financial Act, 2075.
Securities Act 2063

Chapter 10 Special Provisions for Entities

Section 55 : Dissolution of entity
1) A distribution made in proportion to the portion of profit earned by and that of capital contributed by any beneficiary in disposing of the interests in the course of the dissolution of any entity shall be deemed to be the payment of partial dividend and partial capital of that entity if all of the following conditions are fulfilled:-
a) Where any distribution has been made by such entity in respect of cancellation, release or acceptance of the interest in that entity because of,
inter alia
, purchase by the entity of its interest or dissolution of the entity by following the process of law in force,
b) Where, except in cases of full dissolution, the rights of the beneficiaries in the portion of profits of that entity have not been computed in proper portion or could not be computed reasonably, and
c) Where the beneficiary who gets that distribution is not an associated person with the entity after the disposal.
2) Notwithstanding anything contained in sub-section (1), the provisions contained in that sub-section and Section 53 shall not be applicable in cases where any entity purchases the interest of any beneficiary in the entity through the securities market recognised under the law in force and make distribution to that beneficiary.

Securities Act 2063

Chapter 10 Special Provisions for Entities

Section 56 : Transaction between entity and beneficiary
1) If a property is disposed of through transfer of ownership over the property in any manner of distribution between an entity and its beneficiary or in any other manner subject to Section 45, it shall be as follows:-
a) The transferor of the property shall be deemed to have received, from the disposal, an amount equal to the market value of the property immediately before the disposal and
b) The transferee of the property shall be deemed to have incurred cost in a sum equal to that mentioned in clause (a) in acquiring the property.
2) If any liability is disposed of through transfer of the liability between any entity and its beneficiary subject to Section 45, it shall be as follows:-
a) The transferor of the liability shall be deemed to have incurred cost in disposing of the liability in a sum equal to the market value of the liability immediately before the disposal and
b) The transferee of the liability shall be deemed to have received an amount equal to that mentioned in clause (a) in assuming the liability.
3) If any entity distributes dividends except profits as dividends to any beneficiary, the amount of such dividends shall be included in computing the income of the entity.
Provided that provisions may be made to exclude the matters contained in this sub-section in any circumstance as prescribed
Securities Act 2063

Chapter 10 Special Provisions for Entities

Section 57 : Change in control
1) If the ownership of any entity changes by fifty percent or more as compared to its ownership until before the last three years, the entity shall be deemed to have disposed the property under its ownership or the liability borne by it.
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1A) For the purpose of computing change in ownership of fifty percent or more than fifty percent of any entity referred to in sub-section (1), only the following ownership of such entity shall be included:
a) Ownership held by a shareholder holding one percent or more than one percent of the total ownership, and
b) Ownership held by the associated person of a shareholder holding more than one percent of the total ownership of such entity, among shareholders holding less than one percent of the total ownership.
2) If the ownership of an entity is changed, as mentioned in sub-section (1), the entity shall not be allowed to carry out the following acts after such change:-
a) To deduct interest incurred by that entity prior to the change in ownership and carried forward pursuant to sub-section (3) of Section 14,
b) To deduct the loss suffered by that entity prior to the change in ownership, pursuant to Section 20,
c) To carry back a loss suffered after the change in ownership in any income year before such change, pursuant to sub-section (4) of Section 20,
d) To make adjustments pursuant to sub-section (4) of Section 24, if it has been calculated for any amount or expenses pursuant to clause (a) of sub-section (4) of Section 24 prior to the change in ownership, and correction has been made on that amount or expenses pursuant to  sub-section (4) of Section 24 after the change in ownership,
e) To make adjustments pursuant to sub-section (1) of Section 25 if any amount has been calculated pursuant to clause (b) of sub-section (1) of Section 25 prior to the change in ownership, and the right to receive that amount has been relinquished, or in the event of that being a debt claim, such person has written off such amount as a bad debt, after the change in ownership,
f) To subtract, pursuant to Section 36, the loss suffered in disposing any property or liability prior to the change in ownership from the income earned from the disposal of the property or liability after the change in ownership,
g) If the premium has been calculated pursuant to sub-clause (1) of clause (b) of sub-section (4) of Section 60 prior to the change in ownership and such premium has been returned to the insured after the change in ownership to claim for credit accordingly, or
h) To carry forward in the forthcoming year the tax paid in respect of a foreign income prior to the change in ownership, pursuant to sub-section (3) of Section 71.
3) In cases where the ownership of any entity changes in any manner mentioned in sub-section (1) in any income year, the parts before and after the change in ownership in that income year shall be treated as separate income years.
1 Inserted by the Financial Act, 2075.
Securities Act 2063

Chapter 10 Special Provisions for Entities

Section 58 : Provision restricting reduction of dividend tax
1) An arrangement made by any entity upon maintaining all of the following arrangements shall be deemed to have made an arrangement made for reducing dividend tax:-
a) Where the profit of such entity is reserved, current or expected,
b) Where any person who acquires an interest in the entity and the recipient of the interest or his/ her associated person makes any payment to the present or previous beneficiary of the entity or his associated person, irrespective of whether or not it is related to the acquisition of interest and whether or not it is made at the time of acquisition of interest,
c) Where the payment is fully or partly reflected in the profits of the entity, and
d) Where the entity distributes dividends to the recipient of interest after the recipient of interest has acquired interest from the entity and the profits cover the dividends fully or partly.
2) If dividends are distributed by any entity under an arrangement reducing dividend tax made pursuant to sub-section (1), the arrangement shall be deemed to be as follows:-
a) Payment made by the recipient of interest or his/her associated person shall not be deemed as payment made by that person but as distribution by that entity of dividends to the previous or present beneficiary as referred to in clause (b).
b) The dividends distributed by that entity to the recipient of interest shall be deemed as equal to a sum to be set by subtracting the amount of payment said to have been made from the dividends as referred to in clause (a).

Securities Act 2063

Chapter 11 Special Provisions on Banking and Insurance Business

Section 59 : Banking business
1) In computing the income or loss made by any person carrying on a banking business from that business in any income year, it shall be separately computed as if the banking business were a business distinct from any other business carried on by that person.
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1A) Amount up to five percent of the amount of loan due to be recovered kept in the risk-bearing fund by the person operating the banking business, and the amount managed for non-banking property shall be deducted as expenses, subject to the standards prescribed by the Nepal Rastra Bank.
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1B) Amount up to five percent of the amount of loan due to be recovered kept in the risk-bearing fund by a cooperative organisation shall be deducted as expenses.
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1C) If expenses are accounted from the profits where the risk-bearing fund is maintained pursuant to sub-sections (1A) and (1B), the same shall not be remitted, and if the amount held in such fund is capitalised or profit or dividend is distributed, its shall be included in the income in the year in which it is distributed.
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2) ……
3) ……
1 Inserted by the Financial Act, 2075.
2 Removed by the Financial Act, 2075.
Securities Act 2063

Chapter 11 Special Provisions on Banking and Insurance Business

Section 60 : General insurance business
1) In computing the income or loss made by any person carrying on a general insurance business from that business in any income year, it shall be separately computed as if the insurance business were a business distinct from any other business carried on by that person.
2) In computing the income of any person carrying on the insurance business in any income year, it shall be done as follows:-
a) In income, in addition to any other amounts required to be included, the following amounts, as well, have to be included:-
(1) Amounts for premium of insurance including premium for reinsurance received by that person from that business in that year, and
(2) Amounts received in that year from payments referred to in sub-clause (1) of clause (b) for any contract of reinsurance, security, guarantee or compensation.
b) In expenses, in addition to the amounts that can be deducted, the following amounts, as well, maybe deducted:-
(1) Payments made by that person as an insurer in operating that business in that year and
(2) The premiums included pursuant to subclause (1) of clause (a) in computing the income earned from that business in that year or last year and returned to the insured in that year.
3) Sum of the following amounts kept in the risk-bearing fund:
a) Amount up to fifty percent of the net insurance cost shown in the profit and loss account of any year, and
b) Amount up to one hundred and fifteen percent of the remaining amount for payment of claim at the end of any year.
Provided that the amount received as a deduction in expenses in any year pursuant to this sub-clause in the income of the insurance business in a forthcoming income year.
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3) .
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4) 
1 Removed by the Financial Act, 2075.
Securities Act 2063

Chapter 11 Special Provisions on Banking and Insurance Business

Section 61 : Investment insurance business
1) In computing the income or loss made by any person carrying on an investment insurance business from that business in any income year, it shall be separately computed as if the investment insurance business were a business distinct from any other business carried on by that person.
2) It shall be as follows In computing the income of any person carrying on the investment insurance business in any income year, it shall be as follows:-
a) Except the following amounts, other amounts that can be included pursuant to this Act have to be included:
(1) Amounts reinsurance for premium of insurance including premium received by that person in operating that business in that income year, and
(2) Amounts received in that year from payments referred to in sub-clause (1) of clause (b) for any contract of reinsurance, security, guarantee or compensation.
b) Except the following amounts, other amounts that can be deducted pursuant to this Act have to be deducted:
(1) The payments made by any person as an insurer in operating that business and
(2) Premiums referred to in sub-clause (1) of clause (a) returned to the insured.
3) The amounts referred to in sub-clauses (1) and (2) of clause (a) of sub-section (2) and sub-clauses (1) and (2) of clause (b) of sub-section (2) shall not be considered as incomes and expenses for the property or liability of that person.
4) The investment insurance agreement of the investment insurance business of any person shall not be deemed as the property and liability of that person.

Securities Act 2063

Chapter 11 Special Provisions on Banking and Insurance Business

Section 62 : Amount received from insurance
1) For purposes of computing the income of any person, the provisions contained in Section 31 shall apply in respect of the amount received by that person from insurance.
2) Notwithstanding anything contained in sub-section (1), the following provisions shall apply in respect of the profits made from investment insurance:-
a)If a resident person makes payment of such amount, tax shall be imposed on the insured through final tax deduction and
b) If a non-resident person makes payment of such amount, it shall be computed by including that amount in the income of the insured.
Explanation:
For purposes of this Section, “profits made from investment insurance” means the excess sums of payment received by any person for investment insurance in respect of that insurance over the premiums paid by that person.
Securities Act 2063

Chapter 12 Special Provisions on Retirement Saving

Section 63 : Approval of retirement fund
1) If a resident person who desires to hold a retirement fund makes an application to the Department for having the retirement fund, the Department shall give approval as prescribed.
Provided that such funds as the Citizens Investment Trust formed under the Citizen Investment Fund Act, 2047 or the Social Security Fund formed under the Contribution-Based Social Security Fund Act, 2074, if it wishes to maintain a retirement fund, the Employee Provident Fund Act, 2019 or the Retirement Fund formed under the Retirement Fund Act, 2075 operates a retirement fund, it shall not be required to obtain approval for such fund.
2) A natural person who is a beneficiary of the retirement fund may make a claim to have the retirement contribution made to the fund in any income year deducted while computing his income.
3) Notwithstanding anything contained in sub-section (2), the amount claimed by any person for deduction in any income year pursuant to that sub-section shall not exceed the prescribed limit of retirement contribution.

Securities Act 2063

Chapter 12 Special Provisions on Retirement Saving

Section 64 : Tax in retirement fund
1) For purposes of assessing the income of the retirement fund, the amounts to be included or deducted pursuant to this Act shall be included or deducted in computing the income.
Provided that,-
(a) Contributions made to the fund shall not be the income of the fund, and such contributions shall not be included in computation.
(b) Retirement payments shall not be the expenses of the fund and such payments shall not be deducted in computing the income.
(c) Interest of any beneficiary in the retirement fund shall not be a liability of the fund.
2) No tax shall be levied in the income of the retirement fund.
3) If any retirement fund ceases to remain in the form of such fund, such fund has to pay tax at the rate mentioned in sub-section (1) of Section 2 of Schedule I by subtracting the amount referred to in clause (b) from the amount referred to in clause (a).
a) All retirement contributions paid to the fund between the period from the date when the fund got approval as a retirement fund and the date when the recognition ceased to exist and all income amounts treated as taxable incomes in cases where sub-section (2) is not applicable,
b) All retirement payments made by the fund between the period from the date when the fund got approval as a retirement fund and the date when the recognition ceased to exist.