Inserted by the Finance Act, 2076.(8) If a person has obtained full tax exemption on business or investment income in any income year, the loss incurred in such income year shall not be allowed to be carried forward to subsequent income years. 21. Non-deductible expenses: (1) Notwithstanding anything contained elsewhere in this Act, the following expenses or amounts shall not be deductible by a person for the purpose of calculating income from any business, employment, or investment in any income year:-

(а) Expenses of a domestic or personal nature,

(b) Tax payable under this Act and fines and similar charges paid for violation of any law or any rule or regulation made under such law to the government of any country and any local authority thereof,

Inserted by the Finance Act, 2076.Inserted by the Finance Act, 2077 Tax paid to the provincial government and local level shall be deductible as an expense.

(c) Expenses incurred by a person to the extent of receiving amounts exempt under Section 10 or expenses incurred to receive amounts that have been finally taxed,

(d) Expenditure on account of payments mentioned in sub-section (2),

Inserted by the Finance Act, 2076.(1) Except for wage payments of up to three thousand rupees of a casual nature, the remuneration and wage expenses distributed to employees and workers who have not obtained a Permanent Account Number,

Inserted by the Finance Act, 2077.(2) Expenses on account of invoices exceeding two thousand rupees where the Permanent Account Number is not mentioned,

Provided that for the purchase of agricultural, forest, animal, and other household goods directly from a natural person not engaged in commercial transactions, such purchase expense shall be valid even if the seller has not obtained a Permanent Account Number.

(e) Distribution of profits made by an entity, deleted by the Finance Act, 2076

Inserted by the Finance Act, 2076.(1) Remuneration exceeding twenty-five thousand rupees per month per person for which payment has not been made through a bank, or

(f) Any other amounts not specifically stated as non-deductible in clauses (a), (b), (c), (d), (e), and (f), except as provided under this Chapter or Chapters 6, 7, 10, 11, 12, or 13, as amended by the Finance Act, 2076.

(2) A person with an annual turnover exceeding twenty lakh rupees in any income year shall not be entitled to deduct any cash payment exceeding fifty thousand rupees in a single instance in that income year, except in the following circumstances:-

(а) Payment made to the Government of Nepal, constitutional bodies, corporations owned by the Government of Nepal, or banks or financial institutions,

(b) Payment to a farmer or producer of primary agricultural produce, and even if such produce has undergone primary processing, the amount paid to the farmer for processing done by the farmer himself/herself,

(c) Payment on account of retirement contribution or retirement payment,

(d) Payment made in a location where banking services are not available,

(e) Payment made on a day when banking services are closed, or payment where there is an unavoidable compulsion to pay in cash, or

(f) Amount deposited into the bank account of the payee.

(3) Subject to the provisions of Sections 14, 15, 16, 17, 18, 19, 20, and 71, no amount on account of capital expenditure or foreign income tax shall be deductible.