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

Chapter-7 Quantification, Allocation and Characterisation of Amounts

Section 27 : Quantification of amounts
1) Any payment has to be quantified equal to the following amount:
a) In the case of a payment made by way of transferring property by any person to another person, amount equal to the market value of the transferred property,
b) The amount to be determined as prescribed for the payment made for the provision of the following matters or the amounts to be determined pursuant to clause (e) where there is no provision for determining the amount:-
(1) A motor vehicle used or made available for use for personal purposes of the recipient of payment in full or in part or
(2) A building made available for the recipient of payment.
c) The amount which remains by deducting the contributions of the recipient of payment from the expenditure made by the person making payment for the provision of the following:-
(1) The services of a caretaker of the house, cook, driver, gardener or other domestic assistant,
(2) Any food, drinking or entertainment, or
(3) Services like water, electricity, and telephone installed in the residence of the recipient.
d) If the interest paid by any person who has to receive payment in any income year for a loan is less than the amount of interest to be paid as per the prevailing interest rate, the amount to the extent of such a less,
e) In respect of a payment except the payment referred to in clauses (a), (b), (c) and (d), if a third person receives payment instead of the recipient of payment, the amount equal to the value of benefit derivable generally.
2) The time when payment is earned, received, made, borne or otherwise worked out for tax purposes in respect of clauses (a) and (e) of sub-section (1) shall be the time when the quantification of amounts has been made.

Securities Act 2063

Chapter-7 Quantification, Allocation and Characterisation of Amounts

Section 28 : Conversion in money
1) If the income of a person and the amounts to be included and deducted in assessing the income has been quoted in other currencies except Nepali rupees, such amounts have to be converted into Nepali rupees.
2) If the amounts to be included or deducted in computing the income of any person in any income year have been quoted in other currency except Nepali rupees, such currency has to be converted into Nepali rupees as per the exchange rate prevailing at the time when the amount was received, expended, paid, or otherwise worked out for tax purposes.
3) Notwithstanding anything contained in sub-section (2), if the Department has, by issuing a notice in writing, given permission for purposes of that sub-section, any person may apply the average exchange rate prescribed by the Department.

Securities Act 2063

Chapter-7 Quantification, Allocation and Characterisation of Amounts

Section 29 : Indirect payments
If any person gets an indirect benefit from the payments made by the payer or a person associated with him or her or specifies other person to receive the payment, the Department may, by issuing a notice in writing, treat such other person or specified person as the recipient of the payment.
Securities Act 2063

Chapter-7 Quantification, Allocation and Characterisation of Amounts

Section 30 : Investment under joint ownership
Any person shall allocate the amounts to be included or deducted in computing the income for purposes of computing the income earned from the investment under joint ownership with other persons on the basis of the proportion of the respective interests of the joint owners in that investment.

Securities Act 2063

Chapter-7 Quantification, Allocation and Characterisation of Amounts

Section 31 : Characterisation of payment for compensation
If any person or his associated person has received any compensation amount for the following matters, including payments for insurance, at the time of receipt of the amount for the compensation, such amount has to be included, as the case may be, in computing the income earned from employment, business or investment:-
(a) Compensation for any income earned or likely to be earned by that person from any business or investment or for any amount to be included in the computation of that income or
(b) Compensation for any loss suffered or likely to be suffered by that person from any business or investment or for any expenses to be deducted in the computation of that income.
Provided that,
1) The amount of payment of compensation for physical damage of the resident individual from personal accident shall not be included in the income and such expenses in treatment of damage from such accident shall not be claimed for tax adjustment pursuant to Section 51.
2) The compensation amount to be received for the death of a natural person in the income.
Securities Act 2063

Chapter-7 Quantification, Allocation and Characterisation of Amounts

Section 33 : Price transferring and other arrangements between associated persons
1) If any provision is made between the associated persons and the provision is operated as per arm’s length, the Department may, by issuing a notice in writing, distribute, appropriate or allocate the amounts to be included or deducted in computing the income between those persons in such a manner as to reflect the taxable income or the payable tax that could be set for them.
2) In carrying anything mentioned in sub-section (1), the Department may do as follows:-
a) To re-characterise any income, loss, amount or source and type of payment or
b) Where various expenses, including main office expenses, which any person had to incur to operate any business have yielded benefits to the associated person or persons, to allocate such expenses between the associated persons on the comparative basis of the turnover of the business.

Securities Act 2063

Chapter-7 Quantification, Allocation and Characterisation of Amounts

Section 34 : Division of income
1) If any person attempts to divide his income with another person and it appears that it will anyhow lessen the payable tax, the Department may, in order not to allow such less in liability, have the amounts to be included or deducted in computing the income of each person adjusted by giving a notice in writing.
2) The transfer of the following amounts by one or more interposed entities directly or indirectly between persons and associated persons as mentioned in sub-section (1) and circumstances where attempts are made to divide income to lessen the tax required to be paid by the persons or associated persons by virtue of that transfer shall also be included:-
a) The amounts to be received and expenses to be incurred, or
b) The amounts to be received or used from any property by the transferee of that property or expenses incurred or payment made by that person for the acquisition of ownership of that property.
3) In determining whether or not any person has attempted to divide any income pursuant to sub-section (2), the Department shall take the market value of any payment made for the transfer as the basis.

Securities Act 2063

Chapter-7 Quantification, Allocation and Characterisation of Amounts

Section 35 : General rule against tax avoidance
For purposes of ascertaining the tax liability pursuant to this Act, the Department may carry out the following:
(a) To re-characterise any arrangement or any part of such arrangement made or attempted to be made as a part of a tax avoidance scheme,
(b) To disregard any arrangement or any part of such arrangement that does not show any substantial effect or
(c) To re-characterise any arrangement or any part of such arrangement that does not show any substantial element.
Explanation: For purposes of this Section, “tax avoidance scheme’ means any arrangement with a main objective to have avoidance of tax liability or to lessen the tax liability.
Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 37 : Profit and loss made from property and liability
1) The profit derived by any person from the disposal of any property or liability has to be computed, considering it to be the extent that the sum of the income derived from that property or liability exceeds the sum of the outgoings for that property or liability at the time of disposal.
2) The loss suffered by any person from the disposal of any property or liability has to be computed, considering it to be the extent that the sum of the outgoings for that property or liability exceeds the sum of the income earned from that property or liability at the time of disposal.

Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 38 : Expenses and net expenses for property and liability
1) The following expenses shall be included in the expenses for the property or liability of any person subject to this Act:-
a) In respect of any property, the expenses made by that person in acquiring that property, inclusive of the following amounts:-
(1) The related expenses made in the construction and production of that property, and
(2) Any amount required to be included in the computation of the income of that person as a result of the acquisition of such property.
b) The expenses made by that person in obtaining the ownership of that property or liability, inclusive of the expenses incurred in the alteration, improvement, repair and maintenance of the property or liability, and the expenses in the repair and maintenance of the property,
c) The expenses made by him in the disposal of the property or liability and
d) Casual expenses made by him in acquiring the property or bearing liability and disposing of such property or liability.
Provided that the expenses referred to in clauses (a), (b), (c), (d), and (e) of sub-section (1) of Section 21 and the expenses that are allowed to be deducted in the assessment of income are not required to be included in such expenses.
2) The net expenses for any property or liability at any particular time shall be so computed as to consider the amounts to the extent of the excess of the sum of all expenses for that property or liability than the sum of all incomes for that property or liability at that time.
3) The amount of expenses to be deducted in computing the income as referred to in Chapter-6 and 7 shall be deemed as if they were made in respect of the expenses for any property or liability and shall be applicable in respect of the expenses referred to in sub-section (1).
Provided that Section 26 shall not apply to the above-mentioned provision.
Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 39 : Income and net income for property and liability
1) The following amounts shall be included in the incomes for the property or liability of any person subject to this Act:-
a) The amounts received, in respect of the liability, by that person bearing the liability,
b) The amounts to be received by that person in acquiring the property or in respect of bearing the liability, including the amounts acquired by altering or lessening the value of the property or increasing the liability and
c) The amounts received or to be received by that person in respect of the disposal of that property or liability.
Provided that the amount exempted from tax, taxable amount, payment subject to tax deduction finally or the amounts to be included in the income in assessing the income of that person shall not be included in such income.
2) The net incomes for any property or liability at any time shall include the amounts to the extent of the excess of the incomes for that property or liability than the sum of all expenses for that property or liability at that time.
3) The amount to be included in the income in computing the income as referred to in Chapter-6 and 7 shall be deemed as if they were made in respect of the incomes for any property or liability and shall be dealt with pursuant to sub-section (1).
Provided that Section 26 shall not apply in respect of the above-mentioned provision.
Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 40 : Disposal of property or liability
1) If the ownership of any person over any property ceases, he shall be deemed to have disposed of that property. The disposal of the property has to include acts such as distribution of the property by the owner of the property, an amalgamation of the property in other property or liability, sale of the property in instalments or lease out to any other person under a financial lease, cancellation, destroy, loss, expiration or surrender of the same.
2) If the burden of liability of any person ceases, he shall be deemed to have disposed of that liability. The disposal of liability has to include acts such as settlement, cancellation, release and completion of the liability or amalgamation of liability in other liability or property.
3) Notwithstanding anything contained in sub-sections (1) and (2), any person shall be deemed to have disposed of any property or liability in the following circumstances:-
a) In respect of a natural person, immediately before the death of that person,
b) In respect of any property, if the sum of the incomings for that property exceeds the sum of the outgoings for that property,
c) In respect of any property subject to debt claim,-
(1) If it has become a bad debt as per the standards as prescribed in respect of a debt claim of a bank or financial institution and
(2) If, in any other circumstance, that person has reasonably believed the debt claim as non-recoverable.
Provided that the person has to have already pursued all proper measures to recover that debt claim.
d) If any person has started using a business asset, non-business taxable assets, depreciable property or stock-in-trade in a manner to alter the type thereof immediately before the use of the altered form of that property,
e) In the circumstances referred to in Section 57 in respect of any entity and
f) Immediately before that person has become a non-resident person, except the land or building situated in Nepal.
4) If any person disposes of any property by leasing it under a financial lease pursuant to sub-section (1), the lessee of that property shall be deemed to have acquired the ownership of that property at the time of disposal.
5) The following provisions shall apply for purposes of computing the profits derived by any person from the disposal of the property or liability:-
a) The amounts of net expenses for any property under ownership of any person at the time of commencement of this Act shall be deemed to be equal to the market value of the property prevailing at that time,
b) The amounts of net incomes for liability of any person at the time of commencement of this Act shall be deemed to be equal to the amount as per the market value of the liability prevailing at that time.
Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 41 : Disposal along with retention of property or liability
If any person disposes of any property or liability in any manner referred to in clauses (c), (d), (e) and (f) of sub-section (3) of Section 40, the following provisions shall apply:-
(a) In respect of property,-
(1) That person shall be deemed to have received the amount equal to the market value of that property at the time of disposal for the disposal, and
(2) When that property is re-disposed, the net outgoings made for that property until the time of disposal pursuant to this Section shall be deemed to be equal to the amount receivable.
(b) In respect of liability,-
(1) That person shall be deemed to have spent the amount equal to the market value of that liability at the time of disposal for the disposal and
(2) When that liability is re-disposed, the incomings derived for that liability pursuant to clause (1) until that time shall be deemed to be equal to the amount of expenses.

Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 42 : Disposal through instalment sale or financial lease
If any person disposes of any property by way of instalment sale or lease under a financial lease to any other person, the following provisions shall apply:-
(a) The person who has disposed of the property shall be deemed to have received the amount equal to the market value of that property at the time of disposal for the disposal, and
(b) The person who has acquired the property through disposal shall be deemed to have incurred cost in a sum equal to clause (a).
Provided that this provision shall not be applicable where the provision of Section 45 applies.

Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 43 : Transfer of property to husband, wife or former husband, wife
If any natural person who is a divorcee or lives apart upon having partition share disposes of property by transferring it to her husband, his wife or former husband, wife, and that husband, wife or former husband, wife makes a choice in writing to have this Section enforced, the following provisions shall apply:
(a) That person shall be deemed to have obtained, for disposal, the amount equal to the net expenses incurred immediately before the disposal and
(b) The person who has acquired the property through transfer shall be deemed to have incurred cost in a sum equal to clause (a).

Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 44 : Transfer of property after death
If the ownership of any property is disposed of through transfer to any other person because of the death of any natural person, the following provisions shall apply:
(a) That person shall be deemed to have obtained, for disposal, the amount equal to the market value of that property prevailing at the time of disposal and
(b) The person who has acquired the property through transfer shall be deemed to have incurred cost in a sum equal to clause (a).
Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 46 : Involuntary disposal of property or liability with substitution
1) If any person, no later than one year of the involuntary disposal of any property in any mode out of the modes mentioned in sub-section (1) of Section 40, acquires ownership over other property of similar type in lieu of that property and makes a request in writing to have this Section applied, it shall be as follows:-
a) That person shall be deemed to have received, for the disposal, an amount equal to the sum of the following amounts:
(1) Net expenses for that property immediately before the disposal and
(2) If the amount derived from the disposal exceeds the expenses incurred in acquiring the substituted property, the amount of such excess and
b) The person shall be deemed to have incurred expenses in a sum equal to the sum of the following amounts in acquiring the substituted property.
(1) Net expenses for the disposed of property immediately before the disposal, and
(2) If the expenses incurred in acquiring the substituted property exceed the amount derived from the disposal, the amount of such excess.
2) If any person, no later than one year of the involuntary disposal of any liability in any mode out of the modes mentioned in sub-section (2) of Section 40, bears other liability of similar type in lieu of that liability and makes a request in writing to have this Section applied, it shall be as follows:-
a) That person shall be deemed to have incurred expenses, for the disposal in a sum to be set by subtracting the amount mentioned in clause (2) from the amount mentioned in clause (1):
(1) Amount for net incomes for that liability immediately before the disposal and
(2) If the expenses incurred in making that disposal exceed the amount in assuming the substituted liability, the amount of such excess expenses and
b) The person shall be deemed to have received a sum equal to the sum of the following amounts in acquiring the substituted liability:
(1) Net incomes for the disposed liability immediately before the disposal, and
(2) If the amount derived in assuming the substituted liability exceeds the expenses incurred in making the disposal, the amount of such excess.
(3) The circumstances where involuntary disposal is created after substitution of one security of any entity for another security as a result of a change in the security of the interest in the entity or restructuring of the entity shall be as prescribed.
Securities Act 2063

Chapter 8 Assessment of Net Profit from Property and Liability

Section 47 : Disposal upon amalgamation of property and liability
1) If, as a result of the acquisition of any property or bearing of any liability by any person, any other property under the ownership of, or any other liability is borne by, that person ceases or is amalgamated, and thus disposal takes place, then the following provisions shall apply:
(a) Where net expenses were incurred for the amalgamated property or liability immediately before disposal, that person:
(1) shall be deemed to have received an amount equal to the net expenses in respect of the disposal of the amalgamated property or liability,
Provided that such amount shall not exceed the amount received by that person for the amalgamated liability.
(2) shall be deemed to have incurred expenses in a sum equal to that amount in holding ownership or bearing liability of the amalgamated property.
(b) Where net incomes were earned for the amalgamated liability in respect of the amalgamated liability, immediately before the disposal of the liability, that person:
(1) shall be deemed to have incurred expenses in a sum equal to net incomes for the disposal of the amalgamated liability,
Provided that in the case of the amalgamated property, that amount shall not exceed the amount spent by that person in acquiring that property.
(2) shall be deemed to have received an amount equal to that amount in holding ownership of or bearing liability of the amalgamated property.
2) Without prejudice to the matters contained in subsection (1), that sub-section shall also apply to the following circumstances:
(a) If that person carries out an act of acquisition or sale of any property,
(b) If that person acquires the property leased, and
(c) If the guaranteed liability is transferred by the transferee.