Income Tax Act 2058

Chapter 18 Instalment and Advance Tax

Section 95A: To collection advance tax
1) The entity operating commodity future market service shall collect advance tax at the rate of ten percent on the profit and benefit acquired by the person doing trade under the commodity futures market from such business.
2) If any person other than a resident entity doing transaction on the sale and purchase of securities being registered under the prevailing law derives benefits from the disposal of interest in any resident entity, advance tax shall be collected on such benefit computed pursuant to Section 37, as follows:
a) In the case of benefit acquired from the disposal of interest of an entity enlisted in the Securities Board Of Nepal, at the rate of five percent of the profit amount having ownership over for more than three hundred sixty-five days, seven and a half percent for having ownership over for less than three hundred sixty-five days for a resident individual, ten percent of the profit for a resident entity and twenty-five percent of the profit for others, by the entity working for securities exchange market,
b) In the case of benefit acquired from the disposal of interest of an entity not listed in the Securities Board of Nepal, at the rate of ten percent of the profit for a resident individual, fifteen percent of the profit for a resident entity and twenty-five percent of the profit for others, by the entity whose interest has been disposed of.
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2A) In computing benefit pursuant to clause (a) of sub-section (2), it shall be computed on the basis of weightage average cost of the interest owned by that person in the entity of which interest is to be disposed on that date.
3) While recording the share by the Company Registrar’s Office upon disposal of interest pursuant to clause (b) of sub-section (2), it shall record only after the submission of evidence of payment of advance tax in profit amount.
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4) 
5) The Land Revenue Office shall collect advance tax as follows at the time of registration on capital gain earned from the disposal of land or private building of any individual:
a) If the disposed non-business taxable asset (land and building) has the ownership of five years or more at the rate of two and a half percent,
b) If the disposed non-business taxable asset (land and building) has the ownership of fewer than five years, at the rate of five percent.
6) If, except as mentioned in sub-section (5), land or building owned by any other person is disposed of, the Land Revenue Office shall withhold tax at the rate of one and a half percent of the price of disposal at the time of registration.
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6A) The resident bank or financial institution providing the facility of foreign currency exchange to the students going abroad for study for fees of language examination or aptitude examination shall collect advance tax at the rate of fifteen percent at the time of providing such service of exchange for a fee of such examinations.
6B) Any individual resident not involved in the operation of business receiving payment in foreign currency for providing software or similar kind of electronic service outside Nepal, the concerned bank, financial institution or money transfer institution shall collect advance tax at the rate of one percent of the amount received at the time of payment of such amount.
6C) Any individual resident not involved in the operation of business receiving payment in foreign currency for providing consultancy service outside Nepal, the concerned bank, financial
institution or money transfer institution shall collect advance tax at the rate of one percent of the amount received at the time of payment of such amount.
6D) Any individual resident not involved in the operation of business receiving payment in foreign currency for uploading audio-visual material in social network, the concerned bank, financial institution or money transfer institution shall collect advance tax at the rate of one percent of the amount received at the time of payment of such amount.
7) Tax shall be withheld at the customs point at the rate of two point five percent for any such ox, buffalo, goat, sheep, or mountain goat under Chapter 1 of the Custom Classification, live, fresh and frozen fish under Chapter 3; such fresh flowers under Chapter 6, such fresh vegetables, potato, onion, dry vegetables, garlic, baby corn under Chapter 7 and such fresh fruits under Chapter 8 and two and a half percent for such meat under Chapter 2, such milk products, eggs, honey under Chapter 4, such barley, millet, sorghum (
Junelo
), rice, beaten rice under Chapter 10, such refined wheat flour, wheat flour under Chapter 11, such herbal medicines, sugarcane under Chapter 12 and such vegetation products under Chapter 14 as are imported
for business purposes.
However, one and half percent advance income tax will be levied on the import of goods subject to Value-Added Tax.
8) Even though the person or entity responsible for the collection of advance tax pursuant to sub-sections (1), (2), (5), and (6) does not collect it, the tax shall be deemed to have been collected at the time required for such collection.
9) The person paying the advance tax shall submit the details in the mode and format as prescribed by the Department within twenty-five days of the expiration of each month.
10) The amount collected as advance tax or amount considered as collected under sub-section (8) shall be paid to the Department within the time limit as mentioned in the same Section
along with the details mentioned in sub-section (9).
11) The person responsible for depositing advance tax and the person responsible for collecting tax shall be, jointly and individually, responsible for depositing such amount in the Department in the following circumstances:
a) If the person required to collect advance tax does not collect the tax and
b) If the person required to collect advance tax does not deposit the amount collected under sub-section (8) in the Department pursuant to sub-section (10).
12) The person required to deposit advance tax under sub-section (11) shall deposit such tax within twenty-five days of expiration of the date mentioned in sub-section (9).
13) If the person required to deposit advance tax has deposited the advance tax in the Department pursuant to sub-section (10) without collecting the advance tax, the amount equal to such
deposited tax, he or she shall collect and recover such amount from the person required to deposit such tax.
14) The person required to deposit tax shall be allowed to deduct the advance tax deposited pursuant to this Section from annual tax liability.
1 Inserted by the Financial Act, 2076.
2 Removed by the Financial Act, 2079.