chhatramani/nepal_legal_acts_corpus_english huggingface dataset:
Amended by the Finance Act, 2076.450(17) When calculating tax on the transaction amount under sub-section (4A) of Section 4 of this Act, Amended by the Finance Act, 2076.451 tax shall be levied as per sub-section (4) of Section 4 of the Act for transactions up to thirty lakh rupees, and on the transaction amount exceeding that, at the following rates:

(a) For a person dealing in goods with a commission or mark-up of up to three percent, including gas, cigarettes, etc., on transaction amounts exceeding thirty lakh rupees up to fifty lakh rupees: zero point two five percent of the transaction amount, and on transaction amounts exceeding fifty lakh rupees up to one crore rupees: zero point three percent,
(b) For a person conducting business other than that mentioned in clause (a), on transaction amounts exceeding thirty lakh rupees up to fifty lakh rupees: one percent of the transaction amount, and on transaction amounts exceeding fifty lakh rupees up to one crore rupees: zero point eight percent,
(c) For a person conducting a service business: two percent of the transaction amount. 2. In respect of an entity: (1) Subject to sub-sections (2), (3), (5) and (7) of this section, Amended by the Finance Act, 2076.452 tax shall be levied at the rate of twenty-five percent on the taxable income of any entity for any income year.

(2) For any income year, tax shall be levied at the rate of thirty percent on the taxable income of any bank, financial institution, general insurance business, Amended by the Finance Act, 2076.453 entity conducting financial transactions, Amended by the Finance Act, 2076.454 telecommunications and internet services, money transfer, capital market business, securities business, merchant banking business, commodity futures market, securities and commodity broker business, entities dealing in cigarettes, bidis, cigars, chewing tobacco, khaini, Amended by the Finance Act, 2076.455 gutkha, pan masala, liquor, beer, or entities conducting petroleum operations under the Nepal Petroleum Act, 2040. Explanation: In the case of petroleum operations, "taxable income" shall mean the taxable income determined in accordance with the procedures specified in the petroleum agreement and this Act and the Rules made under this Act.
Explanation: In the case of petroleum operations, "taxable income" shall mean the taxable income determined in accordance with the procedures specified in the petroleum agreement and this Act and the Rules made under this Act. Amended by the Finance Act, 2076.456(3) A cooperative institution registered under the Cooperative Act, 2074, if it conducts transactions other than exempt transactions, tax shall be levied at the following rates:

(a) If operated within a municipality area: five percent,
(b) If operated within a sub-metropolitan city area: seven percent,
(c) If operated within a metropolitan city area: ten percent,

Provided that, in the case of a cooperative institution conducting savings and credit transactions, tax shall be levied at the following rates:
(1) If operated within a municipality area: ten percent,
(2) If operated within a sub-metropolitan city area: fifteen percent,
(3) If operated within a metropolitan city area: twenty percent. Amended by the Finance Act, 2076.457(3A)

Amended by the Finance Act, 2076.458(3B) Tax shall be levied at the rate of twenty percent on the taxable income of schools and colleges registered and operated under a public trust.

(4) Amended by the Finance Act, 2076.459

(5) Amended by the Finance Act, 2076.460For any income year, tax shall be levied on the taxable income of a trustee receiving or managing the estate of a deceased resident person or a resident natural person who is incapacitated, treating such estate receiver, manager, or trust as a resident natural person, according to sub-section (1) and sub-section (4) of section 1 of this Schedule.

(6) For any income year, tax shall be levied at the rate of Amended by the Finance Act, 2076.461 five percent on income remitted abroad by a foreign permanent establishment in Nepal of any non-resident person.

(7) For any income year, tax shall be levied at the rate of five percent on the taxable income of any non-resident person in respect of income mentioned in Section 70 of this Act. Amended by the Finance Act, 2076.462Provided that, in the case of a non-resident person providing water transport, air transport, or telecommunication services that do not depart from Nepal to arrive in another foreign country, tax shall be levied at the rate of two percent.

(8) Amended by the Finance Act, 2076.463

Schedule-2

(Relating to Section 19)

Determination of Depreciation Deduction

1.
Classification and Grouping of Depreciable Assets: (1) The classification of depreciable assets shall be as follows:

 Class Description of Assets

 "A" Buildings, structures, and other similar constructions of a permanent nature.
 "B" Computers, data processing equipment, furniture, fixtures, and office equipment.
 "C" Automobiles, buses, and minibuses.
 "D" Construction and excavation related equipment and depreciable assets not included elsewhere, including sub-section (3) of Section 17, sub-section (3) of Section 18, and sub-section (3) of this Schedule.
 "E" Intangible assets other than depreciable assets mentioned in Class "D".

(2) Any person shall place a depreciable asset owned by him/her and used for generating income from business or investment in any income year into a pool as follows at the time it first comes into ownership or use, and such pools shall be considered as the person's pools of depreciable assets for that year:

(a) In respect of similar assets owned or used by the person, depreciable assets of Class "A", "B", "C", or "D" shall be considered to be in the same pool as other assets of the same class.
(b) In respect of depreciable assets of Class "E", even though they are assets of the same class, they must be placed in separate pools.

(3) Costs incurred for the exploration, extraction of minerals, and development thereof from natural resources in the course of generating income from a business shall be treated as if they were costs incurred in purchasing assets for the business related to that income. 2.
2. Depreciation Expense: (1) Any person shall be entitled to deduct, for any income year, an expense equal to the depreciation occurring in that year on assets in each of the person's pools of depreciable assets, calculated according to sub-sections (2) and (6) of this section.

(2) A person must calculate the depreciation deduction for assets in a pool for his/her income year using the following formula:

A x B

Where:
"A" means the depreciation base amount of the pool of assets at the end of that income year,
"B" means the depreciation deduction rate applicable to that pool as mentioned in Section 3 of this Schedule.

(3) The depreciation base amount of depreciable assets in Class "A", "B", "C", or "D" at the end of any income year shall be determined by subtracting the amount in clause (c) from the sum of clauses (a) and (b):

Provided that the amount after such subtraction shall not be less than zero:

(a) The amount remaining after deducting the depreciation expense for that pool calculated under sub-sections (2) and (6) from the depreciation deduction base amount of that pool at the end of the previous year.
(b) The amount of expenditure under sub-section (5) of this Schedule 444.
Amended by the First Amendment. or expense added to the pool for assets added to that pool during that year.
(c) Any amount received from the disposal of any asset of that pool during that year.

(4) The depreciation deduction base amount of each depreciable asset under Class "E" at the end of any income year shall be the total sum of the following amounts:

(a) The depreciation deduction base amount of depreciable assets in the pool at the end of the previous income year, and
(b) The amount added to that depreciation deduction base amount during that fiscal year for an asset within that pool under sub-section (5).

(5) The cost incurred for any depreciable asset included in any pool of a person's depreciable assets shall be added to the depreciation base amount of the relevant pool as follows:

(a) At the time the asset is included in the pool under Section 1 of this Schedule or the time the cost for acquiring the asset is incurred, whichever is later, it shall be added taking the first value calculated according to the following formula:

A / 3 x B

For the purposes of this clause, "A" shall have the following value for the following period:
(i) For the period from the beginning of the income year to the end of Poush, the value shall be three,
(ii) For the period between Magh and the end of Chaitra, the value shall be two, and
(iii) For the period from Baishakh to the end of the income year, the value shall be one.
"B" means that cost amount.

(b) The remaining part of the cost shall be added in the income year following the income year in which the first part was added, provided that the pool has not been dissolved in the interim under sub-section (2) of Section 4 of this Schedule.

(6) If the depreciation expense calculated under sub-section (2) of this section from the depreciation deduction base amount of pools of depreciable assets of Class "A", "B", "C", or "D" results in an amount less than two thousand rupees, the entire remaining amount shall be calculated as an additional depreciation expense. 3. Rate of Depreciation: (1) Subject to sub-section (2), the rate of depreciation applicable to each pool mentioned in sub-section (2) of Section 2 of this Schedule shall be as follows:

 Class Rate

 "A" 5 percent
 "B" 25 percent
 "C" 20 percent
 "D" 15 percent
 "E" The rate expressed as a percentage obtained by dividing the cost of the asset at the time of its acquisition by the useful life of the asset, adjusted to the nearest half year. 446.
449. Added by the First Amendment.(4) If a person issues bills and invoices using a fiscal printer and cash machine, he/she may claim the lump sum amount of expenditure on such printer and cash machine as depreciation expense in the same year. 4. Disposal of Depreciable Assets: (1) When calculating income from the disposal of a depreciable asset or assets used in business or investment in that income year, if clause (a) exceeds clause (b), such excess amount shall be included in that income:

(a) The incomes obtained or deemed to be obtained by a person in that income year from the disposal of assets belonging to Class "A", "B", "C", or "D" pools of the person,
(b) The depreciation deduction base amount of the pool at the end of that year, calculated under sub-section (3) of Section 2 of this Schedule without including the income from the disposal.

(2) If a person disposes of all assets in a pool of his/her depreciable assets before the end of any income year, that pool shall be deemed to be dissolved and the following shall apply:

(a) If the amount calculated for the assets in the depreciable asset pool according to the following formula exceeds the depreciation deduction base amount, the person shall be deemed to have received that excess amount for that year:

A – B

Or

(b) If the depreciation deduction base amount of the pool exceeds the amount resulting from the depreciation calculation for the assets in the depreciable asset pool according to the following formula, the person shall be allowed an expense amount equal to that excess in that year:

B – A

Explanation: For the purposes of this section:

(1) "A" means the incomings received or receivable by a person from the disposal of that asset in that year.
(2) "B" means the total of clauses (i), (ii), and (iii):
(i) The reducing balance value of the pool in that year,
(ii) The outgoings for that year added to the depreciation base amount of the pool, and
(iii) The outgoings to be added to the depreciation base amount of the pool in the following year under sub-section (5) of Section 2 of this Schedule.
(3) For the purposes of this Schedule, the reducing balance value of a pool of depreciable assets in any income year means the following amount:

(a) In the case of a pool of Class "A", "B", "C", or "D", the amount after deducting any depreciation calculated for that pool for that year under sub-section (2) and sub-section (6) of Section 2 of this Schedule from the depreciation base amount of that pool at the end of the previous income year,
(b) In the case of a pool of Class 450.
Amended by the First Amendment. "E", the amount after deducting all expenses allowed to the person as a deduction under sub-section (1) of Section 2 of this Schedule for previous income years from the depreciation base amount of that pool at the end of the previous income year.

(1) Provision of the original Act:
(d) "Non-business chargeable asset" means land, buildings, and shares or securities in any entity, excluding the following assets:
(1) Business assets, depreciable assets, or trading stock,
(2) A private building of a natural person meeting the following conditions:
(a) Owned continuously for three years or more, and
(b) Occupied by that person continuously or intermitt

23. Added by the Economic Ordinance, 2061 (with "4(a) His Majesty's Government" inserted, and subsequently substituted by "Government of Nepal" by the Finance Act, 2063), and amended by the Finance Act, 2074, maintaining continuity. 24. Added by the Finance Act, 2074. Before the amendment, the words "(5) Village Development Committee, Municipality or District Development Committee" existed. By the Act to Amend Some Nepal Acts, 2072, the words "(5) Rural Municipality, Municipality or District Assembly" were substituted. 25. Amended by the Finance Act, 2075. Previously, the word "and" appeared. 26. Added by the Economic Ordinance, 2060, and maintained in continuity. 27. Deleted by the Economic Ordinance, 2060 (the words "done or" were removed). 28. Added by the Finance Act, 2064. Subsequently amended and maintained in continuity by the Finance Act, 2067, and further amended by the Finance Act, 2075. 29. By the Economic Ordinance, 2060, "sub-section (4)" was substituted with "sub-section (5)". 30. Deleted by the Finance Act, 2082. Before deletion, the provision added and maintained by the Finance Act, 2081 read: "5. If a person located outside Nepal indicates a digital presence in Nepal, or if a server located outside Nepal transacts data or services in Nepal for at least ninety days in the preceding twelve-month period, that location shall be considered."

31. Added by the Economic Ordinance, 2060, and subsequently maintained in continuity by subsequent Economic Ordinances and Finance Acts, and amended by the Finance Act, 2075. The original added provision: "(a1) "Adjusted taxable income" means the taxable income calculated for any person for any income year without deducting any amount under Section 12 and without making any deduction under Section 17 or 18."

32. Added by the Finance Act, 2080. 33. Where "ten percent" was maintained by the Finance Acts, 2064, 2065, and 2066, but that provision was not continued thereafter, the original Act's provision remains in effect. 34. The word "commission," was deleted by the Economic Ordinance, 2078, and that amendment was confirmed by the Finance Act, 2078.

(176)

35.
Where "ten percent" was maintained by the Finance Acts, 2064, 2065, and 2066, but that provision was not continued thereafter, the original Act's provision remains in effect. 34. The word "commission," was deleted by the Economic Ordinance, 2078, and that amendment was confirmed by the Finance Act, 2078.

(176)

35. Amended by the Finance Act, 2075.

(1) Original Act's provision: "(ka1) 'Beneficiary' means a person having an interest in any body related to the activity."

(2) By the Economic Ordinance, 2059, the words "related to the activity" were deleted; by the Economic Ordinance, 2060, the words "as per clause (ma)" were inserted before the word "interest"; subsequently amended and maintained in continuity by the Finance Act, 2063, and further amended by the Finance Act, 2075. 36. By the Act to Amend Some Nepal Laws, 2063, the following provision was added: "3a. Tax on His Majesty: Income of His Majesty the King, Her Majesty the Queen, His Royal Highness the Crown Prince and other members of the royal family, and income from their personal property, shall be taxable under this Act." This was repealed by the Finance Act, 2065. 37. Amended by the Economic Ordinance, 2060, and maintained in continuity, and further amended by the Finance Act, 2075. Original Act's provision: "(1) The amount of tax payable by any person referred to in Section 3 for any income year shall be equal to the total tax amount payable by such person."

38. Added by the Economic Ordinance, 2060, and maintained in continuity, and amended by the Finance Act, 2075. 39. Amended by the Economic Ordinance, 2060, and maintained in continuity, and amended by the Finance Act, 2075. Original Act's provision: "(ga) Has not claimed to adjust tax on taxable income under Section 51 except for medical treatment expenses paid by the employer and retirement contributions, and has not claimed to deduct expenses under sub-sections (2) and (3) of Section 63 and expenses under Section 12."

40. Added by the Economic Ordinance, 2062, and maintained in continuity, and amended by the Finance Act, 2075. 41.
Added by the Economic Ordinance, 2062, and maintained in continuity, and amended by the Finance Act, 2075. 41. Amended by the Finance Act, 2078.

(1) Original Act's provision: "(kha) The income from business and the turnover of the business do not exceed the limit mentioned in sub-section (6) of Section 1 of Schedule 1, and"

(2) Provision amended by the Economic Ordinance, 2060: "(kha) The income from business does not exceed one hundred fifty thousand rupees and the turnover of the business does not exceed twelve lakh rupees, and"

(3) Provision amended by the Ordinance, 2062: "(kha) The income from business does not exceed one hundred fifty thousand rupees and the turnover of the business does not exceed fifteen lakh rupees, and"

(4) Provision maintained as amended by the Finance Act, 2075: "(kha) The income from business does not exceed two lakh rupees and the turnover of the business does not exceed twenty lakh rupees,"

(5) Provision amended by the Economic Ordinance, 2078: "(kha) The taxable income from business does not exceed three lakh rupees and the turnover of the business does not exceed thirty lakh rupees,"

(177)

42. By the Economic Ordinance, 2078, the words (which before deletion by amendment read: "the person has opted to apply this provision for that income year,") were deleted, and that amendment was confirmed by the Finance Act, 2078. 43. Added by the Finance Act, 2072, and by the Economic Ordinance, 2078, the words "not registered for value added tax" were deleted, and that amendment was confirmed by the Finance Act, 2078. 44. By the Economic Ordinance, 2078, the words "not registered for value added tax" were deleted, and that amendment was confirmed by the Finance Act, 2078. 45.
44. By the Economic Ordinance, 2078, the words "not registered for value added tax" were deleted, and that amendment was confirmed by the Finance Act, 2078. 45. Added by the Finance Act, 2072, and amended by the Finance Act, 2075. (1) Provision added by the Finance Act, 2072: "(4a) Notwithstanding anything written in sub-section (2), a resident natural person under clause (ka) of Section 3 who fulfills the following conditions shall have the tax payable in any income year on the basis of turnover equal to the amount calculated at the rate specified in sub-section (17) of Section 1 of Schedule 1:

(ka) In that income year, the person has only income from a business sourced in Nepal,

(kha) Has not claimed to adjust tax on account of medical treatment expenses under Section 51,

(ga) Has not claimed advance tax deduction under Section 93,

(gha) The annual turnover of the business is more than twenty lakh rupees and less than fifty lakh rupees,

(nga) Not registered for value added tax, and

(cha) The income is not from consultancy and specialist services provided by natural persons including doctors, engineers, auditors, legal practitioners, athletes, artists, and consultants."

46. Amended by the Finance Act, 2078. By the Economic Ordinance, 2078, the phrase originally reading "(kha) The annual turnover of the business is more than twenty lakh rupees and less than fifty lakh rupees," was replaced with the phrase "(kha) The taxable income from business is up to ten lakh rupees and the turnover of the business is more than thirty lakh rupees and less than one crore rupees," and amended accordingly. 47. Amended by the Finance Act, 2080. Previously, the words "less than one crore rupees" appeared. 48. By the Economic Ordinance, 2078, the phrase "(ga) Not registered for value added tax." was deleted, and that amendment was confirmed by the Finance Act, 2078. 49. Added by the Finance Act, 2082. 50. Amended by the Economic Ordinance, 2072, and subsequently maintained in continuity by subsequent Finance Acts, and amended by the Finance Act, 2075. Original Act's provision: Section 88, by the Finance Act, 2060, "Section 88" was substituted with "87, 88 and 89". 51.
49. Added by the Finance Act, 2082. 50. Amended by the Economic Ordinance, 2072, and subsequently maintained in continuity by subsequent Finance Acts, and amended by the Finance Act, 2075. Original Act's provision: Section 88, by the Finance Act, 2060, "Section 88" was substituted with "87, 88 and 89". 51. Amended by the Finance Act, 2078.

(1) In the original Act, the words "Section 12 or Section 63" appeared.

(178)

(2) By the Finance Act, 2060, after the words "Section 12 or Section 63," the words "or both sections" were inserted.

(3) By the Finance Act, 2066, the words "Section 12, 12a. or 63 or all three sections" were substituted by amendment.

(4) By the Finance Act, 2074, the words "Section 12, 12a., 12b., 6dha or all these sections" were substituted by amendment.

(5) By the Finance Act, 2075, the words "Section 12, 12a., 12b., 63 or" were inserted. 52. By the Finance Act, 2076, the word "and" was deleted. 53. Amended by the Finance Act, 2075. 54. Added by the Finance Act, 2066. By the Finance Act, 2074, the "and" in clause (kha) was deleted, and instead of clause (ga), "(ga) "investment, and" was inserted, creating a new clause (gha), and subsequently amended by the Finance Act, 2075. 55. Amended by the Finance Act, 2068, and continued by subsequent Finance Acts, and amended by the Finance Act, 2075.

(1) Original Act's provision: "6. Assessable Income: Subject to this Act, for any person, in any income year, the following income from any business, employment or investment shall be considered assessable income:-

(ka) In the case of a resident person, income from that person's employment, business or investment during that year, wherever the source of income may be, and

(kha) In the case of a non-resident person, income from employment, business or investment during that year where the source of income is in Nepal. Provided that assessable income shall not include any income exempted under Section 11 or 64."

By the Economic Ordinance, 2059 (2059.9.22), after the words "Section 11 or 64" the words "or both" were inserted by amendment, and that provision was continued until the Finance Act, 2066.

(2) Provision maintained by the Finance Act, 2068: "6.
Assessable Income: Subject to this Act, for any person, in any income year, the following income from any business, employment, investment or windfall gain shall be considered assessable income:-

(ka) In the case of a resident person, income from that person's employment, business, investment or windfall gain during that year, wherever the source of income may be, and

(kha) In the case of a non-resident person, income from employment, business, investment or windfall gain during that year where the source of income is in Nepal. Provided that assessable income shall not include any income exempted under Section 11 or 64 or both."

(179)

56. By the Economic Ordinance, 2060, maintained in continuity, and amended by the Finance Act, 2075. In the original Act, the words "shall be deemed and calculated" appeared. 57. Amended by the Economic Ordinance, 2060. In the original Act, the word "treaty" appeared. 58. Amended by the Finance Act, 2074. Original Act's provision: "(nga) Allowance paid by the Government of Nepal to widows, elderly or disabled persons,". 59. Amended by the Finance Act, 2082. Before the amendment, the word "province" appeared. 60. Deleted by the Finance Act, 2074. Original Act's provision: "(3) Amount earned by Nepal Rastra Bank in accordance with its objectives, or" was added by the Finance Act, 2067, but the amendment by the Finance Act, 2074 did not continue it, resulting in the sub-section not being amended:

"(4) Amount earned by the Securities Board of Nepal in accordance with its objectives."

61. Added by the Finance Act, 2064 and amended by 2074. Original provision: "(jha) Any type of income of the Government of Nepal"

62. Added by the Finance Act, 2074. 63. Amended by the Finance Act, 2077. Provision added by the Finance Act, 2074: (ta) Amount earned by the Securities Board of Nepal in accordance with its objectives. 64. Deleted by the Finance Act, 2081. The previously existing words "Amount earned by drinking water and sanitation consumer institutions registered under the Water Resources Act, 2049, in accordance with their objectives," were deleted. 65. Added by the Economic Ordinance, 2078, and that addition was confirmed by the Finance Act, 2078. 66. Added by the Economic Ordinance, 2078, and that addition was confirmed by the Finance Act, 2078. 67. Amended by the Finance Act, 2080. The previously existing words "or the relevant body of the Government of Nepal" were deleted. 68.
66. Added by the Economic Ordinance, 2078, and that addition was confirmed by the Finance Act, 2078. 67. Amended by the Finance Act, 2080. The previously existing words "or the relevant body of the Government of Nepal" were deleted. 68. Amended by the Finance Act, 2080.

(1) Provision maintained by the Finance Act, 2079: "Provided that income derived from operating an agricultural business registered as a firm, company, partnership or organized institution, a business of dehydrating vegetables, and a cold storage business shall be granted one hundred percent tax exemption on the tax payable on such income."

(2) Provision added by the Finance Act, 2078: "Provided that income derived from operating an agricultural business registered as a firm, company, partnership or organized institution shall be granted fifty percent tax exemption on the tax payable on such income."

69. Amended by the Finance Act, 2075.

(1) Original Act's provision: "(2) No tax shall be levied on the income of a cooperative institution registered and operating under the Cooperative Act, 2048, engaged in businesses such as agriculture or forest-based sericulture and silk production, fruit farming and fruit processing, animal husbandry, dairy industry, poultry farming, fish farming, tea farming and processing, coffee farming and processing, herb farming and processing, vegetable seed production, beekeeping, honey production, rubber farming, fruit farming and production, community forestry, agroforestry and other commercial forestry-related businesses, agricultural and forest-based industries, cold storage established for vegetable storage, and trading of agricultural seeds, pesticides, fertilizers, and agricultural implements (except those operated by mechanical power), and community-based savings or credit cooperative institutions in municipalities designated by the department where necessary infrastructure has not been developed, and rural community-based savings and credit cooperative institutions or associations. No tax shall also be levied on the dividend distributed by such institution or association."

(180)

(2) Provision maintained by the Finance Act, 2063: "(2) No tax shall be levied on the income of a cooperative institution registered and operating under the Cooperative Act, 2048, engaged in businesses such as agriculture or forest-based sericulture and silk production, fruit farming, production and processing, animal husbandry, dairy industry, poultry farming, fish farming, tea farming and processing, coffee farming and processing, herb farming and processing, vegetable seed production, beekeeping, honey production, rubber farming, fruit farming and production, community forestry, agroforestry and other commercial forestry-related businesses, agricultural and forest-based industries, cold storage established for vegetable storage, and trading of agricultural seeds, pesticides, fertilizers, and agricultural implements (except those operated by mechanical power), and rural community-based savings or credit cooperative institutions and rural community-based savings and credit cooperative institutions or associations.
No tax shall also be levied on the dividend distributed by such institution or association."

(3) Provision additionally maintained by the Finance Act, 2064: "(2) No tax shall be levied on the income of a cooperative institution registered and operating under the Cooperative Act, 2048, engaged in businesses such as agriculture or forest-based sericulture and silk production, fruit farming, production and processing, animal husbandry, dairy industry, poultry farming, fish farming, tea farming and processing, coffee farming and processing, herb farming and processing, vegetable seed production, beekeeping, honey production, rubber farming, community forestry, agroforestry and other commercial forestry-related businesses, agricultural and forest-based industries, cold storage established for vegetable storage, and trading of agricultural seeds, pesticides, fertilizers, and agricultural implements (except those operated by mechanical power), and rural community-based savings and credit cooperative institutions or associations. No tax shall also be levied on the dividend distributed by such institution or association. Explanation: "Rural community" means an area other than a municipality area and the village development committees adjoining that area."

(4) Provision additionally maintained by the Finance Act, 2065: After the words "agricultural seeds" the words "animal feed, fodder," were inserted.

(5) Provision maintained by the Finance Act, 2074: "(2) No tax shall be levied on the income of a cooperative institution registered and operating under the Cooperative Act, 2048, engaged in businesses such as agriculture or forest-based sericulture and silk production, fruit farming, production and processing, animal husbandry, dairy industry, poultry farming, fish farming, tea farming and processing, coffee farming and processing, herb farming and processing, vegetable seed production, beekeeping, honey production, rubber farming, community forestry, agroforestry and other commercial forestry-related businesses, agricultural and forest-based industries, cold storage established for vegetable storage, and trading of agricultural seeds, animal feed, fodder, pesticides, fertilizers, and agricultural implements (except those operated by mechanical power), and savings and credit cooperative institutions or associations operating in the area of a rural municipality. No tax shall also be levied on the dividend distributed by such institution or association."

71. Amended by the Finance Act, 2077, which amended the provision of 2076, replacing the previously existing words "savings and credit cooperative" with the words "cooperative engaged in financial transactions."

72.
No tax shall also be levied on the dividend distributed by such institution or association."

71. Amended by the Finance Act, 2077, which amended the provision of 2076, replacing the previously existing words "savings and credit cooperative" with the words "cooperative engaged in financial transactions."

72. Added by the Finance Act, 2071, and amended by the Finance Acts, 2074 and 2075, and maintained.

(1) Added provision: "(2a) Interest of up to twenty-five thousand rupees annually earned from deposits made in microfinance institutions based in rural communities, rural development banks, postal savings banks, and cooperatives under sub-section (2) shall be exempt."

(2) Provision maintained by the Finance Act, 2074: "(2a) Interest income of up to twenty-five thousand rupees annually earned from deposits made in microfinance institutions operating in the area of a rural municipality, rural development banks, postal savings banks, and cooperatives under sub-section (2) shall not be taxed."

73. Added by the Finance Act, 2076. 74. Added by the Finance Act, 2082. 75. Deleted by the Finance Act, 2080. Provision added by the Finance Act, 2076: "(ga) A person who has received a facility under clause (ka) or (kha) shall also receive any other tax exemption facility available under this section."
76.
81. Added by the Finance Act, 2079. 82. Added by the Finance Act, 2077. 83. Amended by the Finance Act, 2077. Previously, the words "achieving a capital of one billion rupees and providing to more than five hundred" appeared. 84. Added by the Economic Ordinance, 2062. Subsequently maintained with amendments by subsequent Economic Ordinances and Finance Acts, and amended by the Finance Act, 2075.

(1) Provision added by the Economic Ordinance, 2062: "(3a) Tax on income from export for any person in any income year shall be levied as follows:-

(ka) Fifty percent of the tax applicable to the income of a special industry established in an export promotion zone or special economic zone designated by His Majesty's Government by notification in the Nepal Gazette.

(kha) Twenty-five percent of the tax applicable to the income of an information technology-based industry established within an information technology park designated by His Majesty's Government by notification in the Nepal Gazette.

(ga) Seventy-five percent of the tax applicable to the income under sub-section (12) of Section 1 of Schedule 1 and sub-section (3) of Section 2 of Schedule 1, excluding the income referred to in clauses (ka) and (kha)."

(2) Provision amended by the Finance Act, 2063: "(3a) Income tax payable on the income of an industry established in a special economic zone shall be fully exempt for five years from the date of commencement of the industry, and fifty percent of the income tax payable for subsequent income years shall be exempt."

(3) Provision amended by the Finance Act, 2064: "(3a) Tax on the income of an industry established in a special economic zone and tax on dividends distributed by such industry shall be exempt as follows:-

(ka) One hundred percent of the income tax payable for five years from the date of commencement of operations for an industry established in a special economic zone located in a Himalayan district and a hilly district designated by the Government of Nepal, and fifty percent of the income tax payable for subsequent income years,

(kha) One hundred percent of the income tax payable for five years from the date of commencement of operations for an industry established in a special economic zone located in other areas, and fifty percent of the income tax payable for subsequent income years,

(ga) One hundred percent of the tax on dividends distributed by an industry established in a special economic zone for five years from the date of commencement of operations, and fifty percent for the subsequent three years,

(gha) Fifty percent of the income tax payable on income derived by foreign investors of an industry established in a special economic zone from foreign technology or management service fees and royalties."

(4) Provision added by the Finance Act, 2072, clause (nga), continued until the Finance Act, 2074: "(nga) One hundred percent dividend tax on capitalization of retained profits into shares for the capacity expansion of the same industry, for special industries and industries related to the tourism sector."

85.
By the Finance Act, 2068, the words "excluding the area referred to in clause (ka)" were inserted. 86. Added by the Finance Act, 2082. 87. Amended by the Finance Act, 2077. Before the amendment, the words "petroleum and natural gas" appeared. 88. Added by the Finance Act, 2063.

(1) Provision added by the Finance Act, 2063: "(3ga) Twenty-five percent of the tax applicable to the income of an information technology-based industry established within an information technology park designated by the Government of Nepal by notification in the Nepal Gazette shall be exempt."

(2) Provision maintained as amended by the Finance Act, 2067: "(3ga) Fifty percent of the tax applicable to the income of an industry related to software development, data processing, cyber cafes, and digital mapping established within a technology park, biotechnology park, and information technology park designated by the Government of Nepal by notification in the Nepal Gazette shall be exempt."

(3) The provision maintained as amended by the Finance Act, 2067, was further amended and maintained by the Finance Act, 2075. 89. Amended by the Finance Act, 2077. 90. Amended by the Finance Act, 2067. Before the amendment, the words "information technology-based" appeared. 91. Amended by the Finance Act, 2082. Previously, "twenty-five percent" was amended to "fifty percent" by the Finance Act, 2067, which was maintained. 92. Amended by the Finance Act, 2078.

(1) Provision added by the Finance Act, 2066: "(3gha) A federal entity licensed to generate, transmit, or distribute electricity that commercially commences generation, generation and transmission, generation and distribution, or generation, transmission, and distribution of hydropower by the month of Chaitra 2075 shall receive a full income tax exemption for the first seven years from the date of commencement, and a fifty percent income tax exemption for the subsequent three years. Such facility shall also be available for electricity generated from solar, wind, and biomass.
Such facility shall also be available for electricity generated from solar, wind, and biomass. Provided that for a licensee who has already commenced commercial production at the time of the commencement of this sub-section, the provision in effect at the time of obtaining the license shall remain."

(2) By the Finance Act, 2068, the proviso in this sub-section was amended as follows:-

"(ka) A hydropower project that commences construction within Bhadra 7, 2071, and commercially commences hydropower generation by the month of Chaitra 2075, shall receive a full income tax exemption for the first ten years and a fifty percent income tax exemption for the subsequent five years.

(kha) For a licensee who has already commenced commercial production at the time of the commencement of this sub-section, the provision in effect at the time of obtaining the license shall remain."

(3) Provision before amendment by the Finance Act, 2078:

"(3gha) A person or entity licensed to commercially generate, transmit, or distribute hydropower by the month of Chaitra 2080 shall receive a full income tax exemption for the first ten years from the date of commercial commencement of hydropower generation, and a fifty percent income tax exemption for the subsequent five years. Such facility shall also be available for electricity generated from solar, wind, and biomass. Provided that for a licensee who has already commenced commercial production at the time of the commencement of this sub-section, the provision in effect at the time of obtaining the license shall remain."

93. Amended by the Finance Act, 2080, substituting "2084" for "2083". By the Finance Act, 2079, "2083" was substituted for "2082". 94. Provision maintained as amended by the Finance Act, 2080.

(1) Previously existing provision: "Provided that for reservoir and semi-reservoir hydropower projects above forty megawatts that achieve financial closure by the month of Chaitra 2085, a full income tax exemption for the first fifteen years and a fifty percent income tax exemption for the subsequent six years."

(2) By the Finance Act, 2079, the word "2082" was substituted.

(3) By the Finance Act, 2079, the word "forty" was substituted for "two hundred". 95. Added by the Finance Act, 2067, and maintained as amended by the Finance Act, 2075; the provision before amendment by the Finance Act, 2076 read: "(3nga) There shall be a twenty-five percent exemption on the tax rate applicable to income derived from the export of goods manufactured by a productive industry."

96. Amended by the Finance Act, 2081. Previously, the word "export" appeared. 97.
Amended by the Finance Act, 2081. Previously, the word "export" appeared. 97. Amended by the Finance Act, 2080.

(1) Provision before amendment: "On income derived from the export of goods manufactured in Nepal, an additional fifty percent on the tax remaining after exemption under clause (ka) or (kha)."

(2) By the Economic Ordinance, 2078, ("twenty-five percent" was substituted with "thirty-five percent"), and that amendment was confirmed by the Finance Act, 2078.

(3) Provision maintained by the Finance Act, 2076: "(ga) On income derived from the export of goods manufactured by a productive industry, an additional twenty-five percent on the tax remaining after exemption under clause (ka) or (kha)."

98. Added by the Finance Act, 2067, and subsequently maintained with amendments by subsequent Finance Acts, and further amended by the Finance Act, 2075. Thereafter, the provision amended by the Finance Act, 2076, was further amended by the Finance Act, 2077.

(1) Provision added by the Finance Act, 2067: "(3cha) There shall be a forty percent exemption on the tax rate applicable to income derived from the construction and operation of roads, bridges, airports, tunnels, or from investment and operation in trams and trolleybuses."

(2) Provision amended by the Finance Act, 2076: "(3cha) Tax on income derived from the following activities by any entity shall be exempted as follows:-

(ka) Twenty percent for operating trams or trolley buses,

(kha) Twenty percent for constructing and operating ropeways, cable cars, railways, tunnels, or sky bridges,

(ga) Forty percent for constructing and operating airports,

(gha) Fifty-two percent for constructing and operating roads, bridges, or tunnels,

(nga) Fifty-two percent for investment and operation in trams or trolley buses."

99. Added by the Finance Act, 2067. By the Finance Act, 2073, the words "ten percent" in this sub-section were substituted with "fifteen percent," and the provision was maintained as amended by the Finance Act, 2075. 100. Added by the Finance Act, 2067, and subsequently maintained with amendments by subsequent Finance Acts, and amended by the Finance Act, 2077. Provision added by the Finance Act, 2067: "(3ja) An industry established in a very developed area producing fruit-based brandy, cider, and wine shall receive a forty percent income tax exemption for ten years from the date of commencement of operations."

101. Added by the Finance Act, 2067. Subsequently maintained by subsequent Finance Acts, and further amended by the Finance Act, 2075. 102. Added by the Finance Act, 2067. Subsequently maintained by subsequent Finance Acts, and further amended by the Finance Act, 2075. 103.
Added by the Finance Act, 2067. Subsequently maintained by subsequent Finance Acts, and further amended by the Finance Act, 2075. 102. Added by the Finance Act, 2067. Subsequently maintained by subsequent Finance Acts, and further amended by the Finance Act, 2075. 103. Amended by the Finance Act, 2080.

(1) Added by the Finance Act, 2071, and by the Finance Act, 2073, the word "rupees" was inserted after the words "two billion," and the provision was maintained as amended by the Finance Act, 2075.

(2) By the Finance Act, 2077, the proviso in sub-section (3ta) reading "Provided that if an existing industry or airline company in operation increases its current installed capacity by at least twenty-five percent, achieving two billion rupees, the income derived from such capacity expansion shall receive a full exemption for five years and a fifty percent exemption on the income tax rate for the subsequent three years" was deleted.

(3) Provision before amendment by the Finance Act, 2080: "(3ta) An industry related to the tourism sector established with a capital investment of more than two billion rupees, or an airline company operating international flights, shall receive a full income tax exemption for five years from the date of commencement of operations, and a fifty percent exemption on the income tax rate for the subsequent three years."

104. Added by the Finance Act, 2075. 105. Amended by the Finance Act, 2081. Previously, the words "special industry" appeared. 106. Deleted by the Finance Act, 2082. Before deletion, the provision added and maintained by the Finance Act, 2081 read: Explanation: For the purpose of this sub-section, "information technology industry" means an industry related to technology parks, information technology parks, biotechnology parks, software development, data processing, digital mapping, business process outsourcing, data mining, and cloud computing. 107. Added by the Finance Act, 2075. 108. Amended by the Finance Act, 2080. The previously existing words "as a company" were replaced with the words "a company."

109. Added by the Finance Act, 2075. 110. Added by the Finance Act, 2075. 111. Added by the Finance Act, 2075. 112. Amended by the Finance Act, 2077. Before the amendment, the words "five years" appeared. 113. Amended by the Finance Act, 2077. Before the amendment, the words "two years" appeared. 114. Amended by the Finance Act, 2076. 115. Amended by the Finance Act, 2080. Added by the Finance Act, 207

१४७ Added by Finance Act, २०६४ and continued by subsequent Finance Acts, with amendment sustained by Finance Act, २०७५.

१४८ The restrictive phrase was removed by Finance Act, २०६४. Original provision: "Provided that such loan liability must have been incurred for the purpose of generating income from business or investment."

१४९ Amended by Finance Ordinance, २०५९.