Income Tax Act 2058

Schedule I (Relating to Section 4)

Rates of Tax
1. In the case of a natural person:
(1) Tax shall be levied by the following rate on the taxable income of any resident natural person in any income year, subject to sub-sections (2) and (4) of this Schedule:-
(a) Where the taxable income from employment is up to four hundred thousand rupees, one percent,
(b) Where the taxable income is more than four hundred thousand rupees but less than five hundred thousand rupees, four thousand rupees up to four hundred thousand rupees pursuant to clause (a), and ten percent on the taxable income of more than four hundred thousand rupees,
(c) Where the taxable income is more than five hundred thousand rupees but less than seven hundred thousand rupees, fourteen thousand rupees up to five hundred thousand rupees pursuant to clause (b), and twenty percent on the taxable income of more than five hundred thousand rupees
(d) Where the taxable income is more than seven hundred thousand rupees but less than twenty lakh rupees, fifty-four thousand rupees up to seven hundred thousand rupees pursuant to clause (c), and thirty percent on the taxable income of more than seven hundred thousand rupees,
(e) Where the taxable income is more than twenty lakh rupees, additional twenty percent tax to the rate of tax under clause (d), to the extent of the taxable income that so exceeds.
Provided that the tax referred to in clause (a) shall not be levied on the income earned by way of pension, in the case of a taxpayer registered as a sole trading firm, and on the income of an individual making a contribution to a pension fund or contributory social security fund
(2) Tax shall be levied by the following rates on the taxable income of any couple making a choice pursuant to Section 50 in any income year, subject to sub-sections (4) of this Schedule:-
(a) Where the taxable income from employment is up to four hundred fifty thousand rupees, one percent,
(b) Where the taxable income is more than four hundred fifty thousand rupees but less than five hundred fifty thousand rupees, four thousand five hundred rupees up to four hundred fifty thousand rupees pursuant to clause (a), and ten percent on the taxable income of more than four hundred fifty thousand rupees,
(c) Where the taxable income is more than five hundred fifty thousand rupees but less than seven hundred fifty thousand rupees, fourteen thousand rupees up to five hundred fifty thousand rupees pursuant to clause (b), and twenty percent on the taxable income of more than five hundred fifty thousand rupees,
(d) Where the taxable income is more than seven hundred fifty thousand rupees but less than twenty lakh rupees, fifty-four thousand rupees up to seven hundred fifty thousand rupees pursuant to clause (c), and thirty percent on the taxable income of more than seven hundred fifty thousand rupees,
(e) Where the taxable income is more than twenty lakh rupees, additional twenty percent tax to the rate of tax under clause (d), to the extent of the taxable income that so exceeds.
Provided that the tax referred to in clause (a) shall not be levied on the income earned by way of pension, in the case of a taxpayer registered as a sole trading firm, pension fund and on the income of an individual making a contribution to a contributory pension fund.
(3) The provision contained in sub-section (4) of this Schedule shall apply in the following circumstances:-
(a) In the case of a resident natural person, where the income is more than four hundred thousand rupees in any income year or in the case of a resident couple who has not made a choice referred to in Section 50,  where the income is more than four hundred fifty thousand rupees in any income year, and
(b) Where the net profit derived from the disposal of non-business taxable property is included in the computation of the income and corresponding taxable income of that natural person or couple.
(4) Tax shall be levied by the following person as follows, subject to sub-section (3) of this Schedule:-
(a) Tax shall be levied by the rate referred to in sub-section (1) or (2) of this Schedule on the amount whichever is higher out of the following amounts, as if only it were the taxable income of that natural person or couple:
(1) The amount remaining balance after subtracting the amount of profits from the total taxable income of that natural person or couple,
(2) Four hundred thousand rupees in the case of a natural person, or four hundred fifty thousand rupees in the case of a couple.
(b) Tax shall be levied by ten percent on the remaining amount of the taxable income.
Provided that,
(1)Tax shall be levied at the rate of two and half percent if the ownership of disposed non-business taxable assets (land and house) is of five years or more than five years.
(2) Tax shall be levied at the rate of five percent if the ownership of disposed non-business taxable assets (land and house) is of less than five years.
(3) Tax shall be levied on the profit earned from the disposal of interest having ownership over for more than three hundred sixty-five days at the rate of five percent and seven and half percent for having ownership over for less than three hundred sixty-five days for a resident individual in entity enlisted in the Securities Board of Nepal.
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(4A) Notwithstanding anything contained elsewhere in this section, section 95A of a resident natural person who is not engaged in the conduct of business. Income tax is levied at the rate of five percent under sub-section (6B) (6C) (6D).
(5)For a natural person working in such remote area as specified by the Government of Nepal, a maximum sum of fifty thousand rupees for the remote allowance shall be deducted as prescribed from the taxable income, and tax shall be computed only on the remaining pursuant to this Section.
(6) For an employee working in a diplomatic mission of Nepal situated abroad, seventy-five percent amount of the foreign allowance shall be deducted from the taxable income, and tax shall be computed on the remaining pursuant to this Section.
(7) The amount of tax pursuant to sub-section (4) of Section 4 of this Act shall be as follows:-
(a) In the case of a natural person carrying on a business in the Municipal Corporation or Sub-Municipal Corporation area, seven thousand five hundred rupees,
(b) In the case of a natural person carrying on a business in the municipal area, four thousand rupees,
(c) In the case of a natural person carrying on a business in any place other than that mentioned in clauses (a) and (b), two thousand five hundred rupees.
(8) Tax shall be levied by twenty-five percent on the taxable income of a non-resident natural person in any income year.
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(9)………..
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(9A) Notwithstanding anything contained elsewhere in this Section, if any individual has income from a pension, tax shall be calculated in the amount remained after deduction of twenty- five percent amount shall be deducted from the amount as mentioned in clause (a) of sub-section (1) for individual or clause (a) of sub-section (2) for a couple. Provided that the ceiling of such deducted amount shall not exceed the prescribed amount.
(10) Notwithstanding anything contained elsewhere in this Section, where any resident individual is a person with a disability, tax shall be computed pursuant to this Section only on the
amount remaining balance after subtracting from the taxable income an additional fifty percent of the amount mentioned in clause (a) of sub-section (1) for the individual or in clause (a) of sub-section (2) for the couple.
(11) Notwithstanding anything contained elsewhere in this Section, where any resident individual is a woman earning income only as remuneration, such individual shall get ten percent
exemption from the tax amount to be paid by him or her.
(12) Notwithstanding anything contained elsewhere in this Section, where any resident individual has made investment insurance, tax shall be computed only in the amount that remains
after deduction of the annual premium or twenty-five thousand rupees, whichever is lesser, from the taxable income.
(13) Notwithstanding anything contained elsewhere in this Section, the following annual tax shall be recovered from the owner of a rented motor vehicle at the time of registration and renewal of the vehicle through the Department of Transport Management:
Type of motor vehicle
Annual tax payable per vehicle
(1) Car, jeep, van, microbus
(a) up to 1300 cc
Rs. 5,500
।-
(b) from 1301 cc to 2000 cc
Rs. 6,000।-
(c) from 2001 cc to 2900 cc
Rs. 6,500।-
(d) from 2901cc to 4000 cc
Rs. 8,000।-
(e) from 4001 cc to all the above
Rs. 9,000।-
(2) Mini truck, minibus, water tanker
Rs. 8,000।-
(3) Mini tipper
Rs. 9,000।-
(4) Truck, bus
Rs. 10,500।-
(5) Machinery equipment such as dodger, excavator, loader, roller, crane
Rs. 15,500।-
(6) Oil tanker, gas bullet, tipper
Rs. 15,500।-
(7) Tractor
Rs. 2,500।-
(8) Power tiller
Rs. 2,000।-
(9) Auto rickshaw, three-wheeler, tempo
Rs. 6,000।-
(10) An electric vehicle
(a) Up to 50 KW
Rs. 3,000।-
(b) 50 KW to 125 KW
Rs. 4,000।-
(c) 125 to 200 KW.
Rs. 6,000।-
(d) More than 200 KW
Rs. 7,500।-
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(14).
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(15)…
(16) Notwithstanding anything contained elsewhere in this Section, where any resident individual has procured health insurance from any insurance company, tax shall be computed in
accordance with this Section, only in the amount that remains after deducting the annual premium paid for such insurance or twenty thousand rupees, whichever is lesser, from the taxable income.
(16A) Notwithstanding anything contained elsewhere in this Section, if any resident individual has insurance of his or her private building having his or her ownership with resident
insurance company, tax shall be calculated in an amount remaining after the deduction of the paid annual premium of five thousand rupees, whichever is less, from the taxable income.
(17) In computing tax for transaction turnover pursuant to sub-section (4a) of Section 4A. of this Act, tax referred to in sub-section (4) of Section 4 of this Act shall be levied on the amount of up to thirty lakh rupees, and tax shall be levied at the following rate on the transaction turnover exceeding that:
(a) For a person conducting a transaction of goods, including gas, cigarette by adding up to three percent commission or price, 0.25 percent of the transaction turnover of more than thirty lakh rupees and up to fifty lakh rupees and 0.3 percent of the transaction turnover of more than fifty lakh rupees and up to one crore rupees,
(b) for a person conducting a business other than that mentioned in clause (a), one percent of the transaction turnover of more than thirty lakh rupees and up to fifty lakh rupees and 0.8 percent of the transaction turnover of more than fifty lakh rupees and up to one crore rupees ,
(c) for a person conducting a service business, two percent of the transaction amount.
2. In the case of entity:
(1) Tax shall be levied by twenty-five percent on the taxable income of any entity in any income year, subject to sub-sections (2), (3), (4), (5) and (7) of this  Section.
(2) Tax shall be levied at the rate of thirty percent on the taxable income of any bank, financial institution, an entity carrying on general insurance business or telecommunication and internet service, money transfer, capital market business, securities business, merchant banking business, commodity futures market, securities and commodities broker business, conducting transaction of cigarette,
bidi
, cigar, chewing tobacco, powder tobacco,
gutkha
,
panmasala
, liquor, beer or petroleum works pursuant to the Nepal Petroleum Act, 2040, in any income year.
Explanation:
“Taxable income”, in the case of petroleum works, means the taxable income assessed in accordance with the procedures mentioned in the petroleum agreement and this Act and the Rules framed under this Act.
(3) Tax shall be levied at the following rate on the turnover, except tax-exempt turnover, of a cooperative registered under the Cooperatives Act 2074 :
(a) If being operated in the area of a Municipality, seventy-five percent of the rate of applicable tax,
(b) If being operated in the area of a Sub-Municipal Corporation, seven percent,
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(3A) ………….
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(3B) Tax will be levied at the rate of twenty percent on the taxable income of schools and colleges registered and run under the Public Group.
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(4) ……
(5) Tax shall be levied pursuant to sub-sections (1) and (4) of Section 1 of this Schedule on the taxable income of a person acquiring or taking care of the property of any deceased resident
person, or of a trust of a resident individual with a disability as if such person acquiring or taking care of such property or such trust was a resident natural person.
(6) Tax shall be levied by five percent on the income sent abroad by any non-resident person’s foreign permanent establishment situated in Nepal in any income year.
(7) Tax shall be levied by five percent on the taxable income of any non-resident person in respect of the income mentioned in Section 70 in any income year.
Provided that tax shall be levied at the rate of two percent in the case of a non-residential person providing water transport, air transport or telecommunication service that does not so depart or transmit from Nepal as not to reach another foreign country.
1 Inserted by the Financial Act, 2079.
2 Removed by the Financial Act, 2077.
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Inserted by the Financial Act, 2078.
4 Removed by the Financial Act, 2076.