chhatramani/nepal_legal_acts_corpus_english huggingface dataset:
Income Tax Act, 2002

101. Revised Assessment: (1) The Department may make a revised assessment to adjust the tax liability of a person whose tax has been assessed under Section 99 or 100, on a fair basis in accordance with the objectives of this Act.

(2) If the Department deems it appropriate, it may revise a revised assessment made under sub-section (1) as many times as necessary on a fair basis.

(3) When making an assessment under sub-section (1) or (2), the Department must do so within four years from the following dates:-
(a) In case of assessment under Section 99, the date on which the income return was required to be filed,
(b) In case of assessment under sub-section (2) of Section 100, the date on which notice of assessment was given to the person under Section 102,
(c) In case of an assessment under sub-section (1) or (2), the date referred to in clause (a) or (b) relating to the original assessment that was revised under sub-section (1).

(4) Notwithstanding anything contained in sub-section (3), if the assessment of any person has been made incorrectly due to fraud, the Department may revise such assessment at any time. When making such revision, it must be completed within one year of obtaining knowledge of the fraud leading to the incorrect filing or assessment.

(5) Notwithstanding anything contained in sub-section (3), where a Revenue Tribunal or other competent courts have revised an assessment or reduced the assessed tax, the Department shall not revise such assessment to that extent. Provided that if an order for reinvestigation is given, it shall not be deemed to have prevented the revision.

(6) When revising an assessment under this section, the Department shall, by providing a clear written notice of the reasons for such revision to the person, grant a period of Amended by the Finance Act, 2075.fifteen days to submit evidence of clearance in relation to such assessment. Added by the Finance Act, 2081.101A. Assessment of Tax on Unexplained Assets: (1) If a matter regarding the assessment of tax on unexplained assets of any person under Section 28 of the Money Laundering Prevention Act, 2064 is referred to the Department, the Department shall, subject to that section, investigate whether or not a tax offense has been committed.

(2) If, during the investigation under sub-section (1), no tax offense is found, income tax at the maximum rate applicable to the income of that year shall be recovered from such person. 102.
Income Tax Act, 2002

102. Notice of Assessment: The Department shall provide a written notice of the assessment made under sub-section (2) of Section 100 or under Section 101 to the person assessed, specifying the following particulars:-
(a) The assessed tax payable and remaining to be paid by the person referred to in clauses (a) and (b) of Section 3 for the income year or period to which the assessment relates,
(b) The method by which the tax was calculated in the assessment referred to in clause (a),
(c) The reasons why the Department deemed it necessary to make the assessment,
(d) The time within which the assessed tax remaining to be paid must be deposited, and
(e) The time, place, and manner for filing an objection if dissatisfied with the assessment. Chapter 20

Collection, Waiver, and Refund of Tax

103. Security for Tax to be Deducted and Deposited: (1) The person required to deduct tax at source shall give priority to the tax to be deducted under Chapter 17 over any payments required to be made by court order, any other law, or in any other manner.
(2) Regarding the tax deducted under Chapter 17 by a person required to deduct tax at source, the following shall apply:-
(a) The tax deducted by such person, and any property received in lieu thereof, shall be deemed to be held in lien for the Government of Nepal,
(b) The amount of tax so deducted shall not be attached to the debts or liabilities of such person, and
(c) In the event of bankruptcy or dissolution of such person required to deduct tax at source, the amount of tax so deducted shall not be considered part of the assets of the dissolved or bankrupt entity, and upon distribution following such dissolution or bankruptcy, the Department shall have the first claim on the deducted tax or that property. 104.
Income Tax Act, 2002

104. Claim on Property: (1) Notwithstanding anything contained in the prevailing law, if any person fails to deposit tax by the due date, a claim of the Government of Nepal shall be deemed to have arisen on the property of the person who is in tax arrears.
(2) When making a claim on property under sub-section (1), the Department must provide a written notice to the person specifying the following:-
(a) Description of the property claimed,
(b) The extent of the claim as referred to in sub-section (3),
(c) The tax related to such claim, and
(d) Any other matter, if any.
(3) When making a claim on property under sub-section (2), the claim shall arise only to the extent of the tax payable by such person, the interest payable on such tax under Section 119, and the expenses incurred in making the claim and conducting the auction sale.
(4) A claim made under sub-section (2) shall not be effective until the following actions have been taken:-
(a) In the case of buildings and land, until the Department has given notice to register the claim under sub-section (6),
(b) In the case of other tangible property, until the Department has taken possession of such property under sub-section (3) of Section 105, and
(c) In any other case, until the notice under sub-section (2) has been given to the person in tax arrears.
(5) If the person in tax arrears pays the entire amount under sub-section (3) covered by the claim made under sub-section (2) to the Department, the claimed property shall be released.
(6) If the Department makes a claim on any land, property, or building under sub-section (2), it shall inform the concerned Land Revenue Office, and that Office shall attach such land, property, or building so that it is not sold or transferred to anyone.
(7) If a claim on land, property, or building is to be released under sub-section (5), the Department shall notify the Land Revenue Office accordingly. Upon receiving such notification, the Land Revenue Office shall release the attached land, property, or building.
(8) Regarding the expenses incurred under sub-section (3), the Department shall, as soon as possible, notify the person in tax arrears specifying the following:-
(a) The expenses incurred by the Department in relation to the claim and auction sale of the property of the person in tax arrears prior to giving such notice, and
(b) The date by which such expenses must be paid to the Department by the person in tax arrears.
Income Tax Act, 2002

Explanation: For the purposes of this section, "expenses incurred in making the claim and auction sale" means the expenses incurred or to be incurred by the Department as follows:-
(a) Expenses incurred or to be incurred by the Department under this section for creating or releasing a claim on such property, or
(b) Expenses incurred or to be incurred by the Department under Section 105 for taking possession, retaining, and auctioning the claimed property. 105. Auction Sale of Claimed Property: (1) The Department shall issue a notice to the person in tax arrears for the auction sale of the claimed property in the possession of such person.
(2) The notice given under sub-section (1) may be included in or attached to the notice given under sub-section (2) of Section 104. Such notice must clearly specify the following and be given to the person in tax arrears:-
(a) The claimed property, the manner and time of its auction or sale, and
(b) In the case of tangible property, the manner and place where the Department will take possession of such property.
(3) After giving the notice under sub-section (1) or (2) to the person in tax arrears, the Department may:-
(a) Take possession of the tangible property mentioned in the notice at any time,
(b) Enter any premises mentioned in the notice under sub-section (1) at any time for the purpose of taking possession of tangible property, and
(c) In the case of tangible property other than land, property, or buildings, store such property at any place the Department deems appropriate at the expense of the person in tax arrears.
(4) If the Department has given notice under sub-section (1) to the person in tax arrears, it may sell such claimed property by public auction or sell or dispose of such property in any manner it deems appropriate at the following times:-
(a) If the claimed property is land, property, or a building, after thirty days from the date of taking possession under sub-section (3),
(b) If the claimed property is perishable tangible property, after one day from the date of taking possession under sub-section (3),
(c) If the claimed property is tangible property other than that referred to in clause (a) or (b), after ten days from the date of taking possession under sub-section (3), and
(d) If the property is of any other type, after ten days from the date of taking possession under sub-section (3).
(5) From the proceeds of the auction sale under sub-section (4), the expenses incurred in making the claim and auction sale of the property sold shall be deducted first.
Income Tax Act, 2002

After such deduction, the tax payable and the interest payable on such tax under Section 119 shall be deducted. If any amount remains thereafter, such amount shall be refunded to the person in tax arrears.
(6) After adjusting the proceeds from the auction sale under sub-section (5), the Department shall give a written notice to the person in tax arrears detailing the adjustment process.
(7) If, after applying the process under sub-section (5) to adjust the proceeds from the auction sale, the amount is insufficient to fully pay the expenses, tax, and interest referred to in that sub-section, the Department shall initiate proceedings again under Section 104, 111, or this section to recover the remaining amount. Explanation: For the purposes of this section,-
(a) "Claimed property" means the property of the person in tax arrears referred to in sub-section (2) of Section 103 or sub-section (2) of Section 104 by the person required to deduct tax at source.
(b) "Expenses incurred in making the claim and auction sale" means the expenses incurred in making the claim and auction sale under Section 104.
(c) "Person in tax arrears" means the person required to deduct tax at source as referred to in Sections 103 and 104. 106. Restriction on Leaving Nepal: Omitted by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066. (1) If any person fails to deposit tax by the due date, Amended by the Finance Act, 2075.the Department may, by giving written notice to the concerned office of the Government of Nepal, order to prevent such person from leaving the country for up to 72 hours from the date of payment, for the period of notice given to deposit the tax.
(2) If the time limit referred to in sub-section (1) needs to be extended, the Department must obtain prior approval from the concerned High Court.
(3) If the person under sub-section (1) deposits the tax, or if the Department is satisfied that satisfactory arrangements have been made for the deposit of the tax, the Department may withdraw such order by giving notice to the concerned office under sub-section (1). 107.
Income Tax Act, 2002

107. Liability of Officers of an Entity: (1) If any entity fails to comply with any requirement under this Act, every person acting as an officer of that entity at that time shall be held responsible therefor.
(2) If an entity commits an offense by failing to pay tax by the due date, every officer who is currently serving or was in office up to six months prior shall be jointly or severally liable to pay such tax.
(3) Notwithstanding anything contained in sub-sections (1) and (2), these sub-sections shall not apply in the following circumstances:-
(a) Where the entity committed such offense without the knowledge or consent of such person, and
(b) Where such person had taken or applied the same degree of care, diligence, and skill that a person of ordinary prudence would have taken in similar circumstances to prevent such offense.
(4) If any person pays tax under sub-section (2), such person may:-
(a) Recover the amount so paid from the entity,
(b) For the purpose of clause (a), retain in his possession any property, including money, of the entity that is in or may come into his possession, up to an amount not exceeding the amount so paid.
(5) If any person takes possession of any property under clause (b) of sub-section (4), no claim shall lie against such person by the entity or any other person. Explanation: For the purposes of this section, "officer of any entity" means the manager of that entity or any person acting in that capacity. 108.
Income Tax Act, 2002

Explanation: For the purposes of this section, "officer of any entity" means the manager of that entity or any person acting in that capacity. 108. Recovery of Tax from Receiver: (1) Every receiver shall, within fifteen days from whichever is earlier of the date of appointment as receiver or the date of taking possession of any property in Nepal, notify the Department in writing of that fact.
(2) The Department shall give a written notice to the receiver regarding the amount to be deposited by the person in tax arrears.
(3) After receiving the notice under sub-section (2), the receiver shall:-
(a) Sell the necessary portion of the property in his possession and, from the proceeds, after paying any debt having priority over the tax to be deposited under sub-section (2) and subject to clause (c) of sub-section (2) of Section 103, set aside the amount notified by the Department under that sub-section, and
(b) Deposit the amount so set aside with the Department on behalf of the person in tax arrears towards his tax liability.
(4) To the extent that the receiver has failed to set aside any amount under sub-section (3), the receiver shall have a personal liability to deposit with the Department an amount equal to the tax liability payable on behalf of the person in tax arrears. Provided that the receiver may recover the amount so deposited from the person in tax arrears. Explanation: For the purposes of this section,-
(a) "Receiver" means any of the following persons:-
(1) Liquidator,
(2) A person appointed, whether out of court or by a court, as receiver of any property or entity,
(3) A person who takes possession of property under a mortgage,
(4) The direct heir, administrator, or representative of the estate of a deceased natural person, or
(5) Any person acting on behalf of an incapacitated natural person.
(b) "Person in tax arrears" means the person whose property has come into the possession of the receiver. 109.
Income Tax Act, 2002

109. Recovery of Tax from Persons Liable to Pay Amounts: (1) If a person in tax arrears fails to pay the tax by the due date and remains in default, the Department may, by written notice to any of the following payers, order the deposit in the Department of an amount up to the tax payable on behalf of the person in tax arrears, within the date specified in the notice:-
(a) A person who is liable to pay money to the person in tax arrears,
(b) A person who holds money for or on behalf of the person in tax arrears,
(c) A person who holds money on behalf of any third party to be paid to the person in tax arrears, or
(d) A person authorized by a third party to pay such money to the person in tax arrears.
(2) The Department shall give a copy of the notice given to the payer under sub-section (1) to the person in tax arrears.
(3) Notwithstanding anything contained in sub-section (1), the date specified in the notice under that sub-section shall not be earlier than the dates referred to in clauses (a) and (b):-
(a) The date on which such money is payable to the person in tax arrears or the date on which such money is held on his behalf, and
(b) The date on which notice was given under sub-section (2).
(4) The amount deposited by the payer under sub-section (1) shall be deemed to be a payment made to the person in tax arrears. Such amount shall not be claimed from the payer by the person in tax arrears or any other person. 110.
Income Tax Act, 2002

Such amount shall not be claimed from the payer by the person in tax arrears or any other person. 110. Recovery of Tax from Agent of Non-Resident Person: (1) If a non-resident person who is in tax arrears fails to pay tax by the due date and remains in default, the Department may, by written notice to any person holding any property owned by such person in tax arrears, order the payment of tax on behalf of the person in tax arrears from an amount equal to the market value of such property, but not exceeding the tax payable by such person, within the date specified in the notice, in relation to the tax liability of such third party.
(2) If any person pays the tax amount in accordance with the order under sub-section (1), such person may:-
(a) Recover the amount of such payment from the person in tax arrears,
(b) For the purpose of clause (a), take possession of any property, including money, of the person in tax arrears that is in or may come into his possession, up to an amount not exceeding the amount so paid.
(3) If any person takes possession of any property under clause (b) of sub-section (2), no claim shall lie against such person by the person in tax arrears or any other person. 110A. Recovery of Arrears Tax in Installments: Added by the Finance Act, 2075. Before instituting a case under Section 111, if any person makes a written request to pay the arrears amount in installments, the Tax Officer may, for reasonable reasons, approve the payment in installments by granting a reasonable period. 110B. Liability for Tax Payment of Joint Venture: Added by the Finance Act, 2075. Persons involved in a joint venture shall be jointly or severally liable for the payment of the tax liability of the joint venture in which they are involved. 110C. Person Receiving Actual Benefit Liable for Tax Payment: Added by the Finance Act, 2076. If it is proven that the person receiving the actual benefit of a business is different from the person in whose name the business is registered, the liability to pay the tax of such business shall be of the person receiving such benefit. 111. Instituting Case for Non-Payment of Tax: The Department may file a case in the concerned District Court for recovery of tax from a person who fails to deposit tax within the due date. 112.
Income Tax Act, 2002

111. Instituting Case for Non-Payment of Tax: The Department may file a case in the concerned District Court for recovery of tax from a person who fails to deposit tax within the due date. 112. Waiver: (1) If the tax payable by any person is irrecoverable, the Government of Nepal may grant a partial or full waiver of such tax.
(2) Notwithstanding anything contained in sub-section (1), the Government of Nepal may grant a full or partial waiver of the fees and interest imposed under Chapter 22. 113. Tax Refund and Adjustment: (1) If any person has paid tax in excess of his tax liability, the Department may direct that the excess tax amount be deducted from the tax payable by him under this Act. Any balance remaining after such deduction shall be refunded to the concerned person by the Department.
(2) If any person does not need to pay the tax relating to the interest deposited under Section 119, the Department shall refund such interest to the person. Amended by the Finance Act, 2075.(3) If any person applies to the Department in the prescribed manner for a refund under sub-section (1), the Department shall refund such amount within sixty days from the date of application.
(4) A person applying under sub-section (3) must submit such application within two years from the latest of the following dates. If no application is made within that period, the amount under sub-section (1) shall not be refunded:-
(a) The date of expiry of the income year giving rise to the overpayment,
(b) The date on which the overpayment was made, or
(c) The date of the court verdict.
(5) The Department shall give a written notice of its decision regarding the application filed under sub-section (3) to the concerned person.
(6) When the Department refunds any tax amount to any person by court order or otherwise, the Department shall also pay interest at the ordinary rate for the following period:-
(a) If such tax refund relates to the adjustment of excess tax available to any person under Section 93, 94, or 100 for any income year, the period from the date on which the income return was required to be filed under Section 96 to the date of refund, and
(b) In any other case, the period from the date on which such person paid the tax to be refunded to the date of refund.
(7) Tax credits claimable under Section 51 or 71 for any income year shall not be adjusted or refunded under this sub-section.
Income Tax Act, 2002

Provided that tax credits for that year may be adjusted in accordance with the provisions made in sub-section (2) of Section 4, sub-section (4) of Section 51, and sub-section (3) of Section 71. Omitted by the Finance Act, 2081.(8)

Chapter 21

Review and Appeal

114. Decisions Subject to Administrative Review and Procedure: (1) For the purposes of this Act, the following decisions shall be subject to administrative review:-
(a) An advance ruling issued by the Department under Section 76,
Added by the Finance Act, 2075.(a1) A decision made or order given under sub-section (8) of Section 90,
(b) An estimate made by the Department regarding the estimated tax to be deposited by any person, or a decision made for the purpose of estimation, under sub-section (7) of Section 95,
(c) A decision made by the Department to order any person to submit an income return under sub-section (5) of Section 96 or under Section 97,
(d) A decision made by the Department on an application for extension of time to file an income return under Section 98 by any person,
(e) An assessment of tax payable by any person for any income year under Section 100 or 101, or the determination of auction sale expenses under sub-section (5) of Section 105, or the determination of fees and interest payable by any person under Section 122,
(f) A notice given by the Department to a person in the capacity of a receiver under sub-section (2) of Section 108 to set aside an amount as receivable,
(g) A decision made by the Department under sub-section (1) of Section 109 ordering any person holding amounts payable to a person in tax arrears to deposit such amounts with the Department,
(h) A decision made by the Department under sub-section (1) of Section 110 ordering any person to deposit tax on behalf of a non-resident person,
(i) A decision made by the Department on an application filed by any person for a tax refund under sub-section (5) of Section 113, and
(j) A decision made by the Department on an application filed by any person for extension of the time limit for filing an application under sub-section (3) of Section 115.
(2) If the Department has made a decision regarding matters referred to in clauses (d), (i), and (j) of sub-section (1), but fails to notify the applicant of the decision within thirty days of receiving the application under Section 98, sub-section (3) of Section 113, or sub-section (3) of Section 115, it shall be deemed to be a decision to reject the application, and such decision shall be subject to administrative review under sub-section (1).
(3) If the notice of decision under sub-section (2) is not received by the applicant within the prescribed time, and the applicant registers such information with the Department, the Department shall be deemed to have made the decision to reject the application referred to in that sub-section and to have given notice thereof to the person on that date.
Income Tax Act, 2002

115. Application for Administrative Review: (1) A person dissatisfied with a decision subject to administrative review under Section 114 may file an application against such decision with the Department within thirty days from the date of receiving the notice of such decision.
(2) An application under sub-section (1) must clearly state the reasons and grounds for such review.
(3) If the time limit for filing an application under sub-section (1) has expired, and any person files an application for extension within seven days from the date of expiry, the Department may:-
(a) If reasonable cause is shown, extend the time limit for filing an application under sub-section (1) for up to thirty days from the date of expiry, and
(b) Give a written notice of its decision on such application to the applicant.
(4) The filing of an application under sub-section (1) shall not be deemed to affect the implementation of the decision referred to in sub-section (1) of Section 114.
(5) Notwithstanding anything contained in sub-section (4), the Department may stay or otherwise affect the operation of the decision made under sub-section (1) of Section 114 until the application filed by any person under sub-section (1) is disposed of. Amended by the Finance Act, 2076.(6) A person filing an application under sub-section (1) must pay the entire amount of the undisputed tax out of the assessed tax amount and Amended by the Finance Act, 2076.one-fourth of the disputed tax amount.
(7) Regarding an application filed under sub-section (1), the Department may:-
(a) Accept or reject the matters stated in the application in full or in part, and
(b) Give a written notice of its decision on the application to the person. Added by the Finance Act, 2076.(8) If the Department fails to give notice of its decision on the application to the applicant within sixty days from the date of filing the application under sub-section (1), the applicant may appeal to the Revenue Tribunal under Section 116. Added by the Finance Act, 2076.(9) If an appeal is filed under sub-section (8), such person shall, within fifteen days from the date of filing the appeal, give written information to the Department attaching a copy of the appeal petition. 116.
Income Tax Act, 2002

Added by the Finance Act, 2076.(9) If an appeal is filed under sub-section (8), such person shall, within fifteen days from the date of filing the appeal, give written information to the Department attaching a copy of the appeal petition. 116. Appeal to Revenue Tribunal: (1) A person dissatisfied with the decision on an application filed with the Department under Section 115 may file an appeal to the Revenue Tribunal in accordance with the Revenue Tribunal Act, 2031.
(2) A person filing an appeal under sub-section (1) shall, within fifteen days of filing the appeal, register a copy of the notice of appeal with the Department.
(3) The filing of an appeal under sub-section (1) shall not be deemed to affect the implementation of the decision referred to in sub-section (1) of Section 114.
(4) Notwithstanding anything contained in sub-section (1) of Section 114, if the decision subject to administrative review in that sub-section is made by the Director General, an appeal shall lie to the Revenue Tribunal. Added by the Finance Act, 2078.(5) When filing an appeal to the Revenue Tribunal under sub-section (1), the undisputed amount of the assessed tax must be paid, and security deposit or bank guarantee for fifty percent of the disputed tax amount, fees, and penalties must be provided. Added by the Finance Act, 2079.(6) When calculating the deposit amount or bank guarantee under sub-section (5), the twenty-five percent tax amount deposited for administrative review with the Inland Revenue Department shall also be calculated. Added by the Finance Act, 2079.(7) A bank voucher deposited in the deposit account at the Treasury and Comptroller Office in the name of the concerned office, or a bank guarantee for an equivalent amount, must be submitted along with the appeal petition under sub-section (5). Chapter 22

Fees and Interest

117.
Income Tax Act, 2002

Chapter 22

Fees and Interest

117. Fee for Not Maintaining Records or Not Filing Returns or Income Returns: Amended by the Finance Act, 2075.(1) If any person fails to file the following returns, the following fees shall be levied on such person:-
(a) If an income return for any income year is not filed under sub-section (1) of Section 95, Amended by the Finance Act, 2077.a fee of five thousand rupees or an amount equal to zero point zero one percent of the assessable income amount mentioned in the income return, whichever is higher, per return,
(b) If any person required to collect advance tax fails to file a return under Amended by the Finance Act, 2077.sub-section (9) of Section 95A., a fee of one and a half percent per annum of the amount required to be collected as advance tax, for each month and part of a month from the date the return was due to the date the return is filed,
(c) If an income return for any income year is not filed under sub-section (1) of Section 96, in the case of a person referred to in sub-section (4) of Section 4 of this Act, Amended by the Finance Act, 2081.a fee of twelve hundred rupees per return, and if the period is less than one year, at the rate of one hundred rupees per month, and in the case of other persons, a fee at the rate of zero point one percent per annum of the assessable income, calculated without deducting any amounts that could be deducted and including any amounts that should be included, or Amended by the Finance Act, 2081.a fee of twelve hundred rupees per return, and if the period is less than one year, at the rate of one hundred rupees per month, whichever is higher.
Income Tax Act, 2002

Added by the Finance Act, 2082.(d) If an income return for any income year is not filed under sub-section (2) of Section 97, a fee at the rate of zero point one percent per annum of the amount arrived at after deducting income subject to final deduction from the assessable income of such person, or a fee of twelve hundred rupees per return, and if the period is less than one year, at the rate of one hundred rupees per month, whichever is higher.
(2) If any person fails to maintain records required to be maintained under Section 81 for any income year, such person shall be liable to a fee of an amount equal to zero point one percent of the assessable income, calculated without deducting any amounts that could be deducted and including any amounts that should be included, or one thousand rupees, whichever is higher, for the year for which the records were not maintained.
(3) If any agent required to deduct tax at source fails to file a return under sub-section (1) of Section 90, such agent shall be liable to a fee of an amount equal to two point five percent per annum of the tax amount required to be deducted, for each month and part of a month from the date the return was due to the date such return is filed. 118.
Income Tax Act, 2002

118. Interest for Under-Payment of Estimated Tax by Installment Payers: (1) If, for any income year, the amount referred to in clause (b) exceeds the amount referred to in clause (a) in respect of the installment amount to be deposited under Section 94 by any person, interest shall be charged on such excess amount in accordance with sub-section (2):-
(a) The amount of each installment paid by such person in that income year,
(b) The amount that would have been payable as an installment for each installment period if the estimate or revised estimate of the total amount to be paid by installments for that income year were correct, and if not correct, ninety percent of the amount payable as an installment for each installment period of the tax amount required to be deposited by the person referred to in clauses (a) and (b) of Section 3.
(2) A person under sub-section (1) shall be charged interest at the ordinary rate for each month and part of a month from the due date of that installment for that year until the following period:-
(a) In the case of a person whose tax is assessed under sub-section (1) of Section 99, until the date on which the income return was due,
(b) In the case of a person whose first revised assessment under Section 101 is made by the Department due to non-assessment under sub-section (1) of Section 99, until the date of delivery of the notice of such revised assessment under Section 102. Explanation: For the purposes of this section, "amount payable by installments" means, in the case of a person who has submitted an estimate once and does not submit a revised estimate, and in the case where the Department has made an estimate under sub-section (7) of Section 95 due to failure to submit an estimate, the installment amount calculated under sub-section (1) of Section 94, and in the case of a person who submits a revised estimate, and where the Department, not satisfied with the estimate or revised estimate submitted, makes an estimate under sub-section (7) of Section 95, the installment amount calculated in accordance with the provisions of sub-section (5) of Section 95. 119. Interest for Non-Payment of Tax: (1) If any person fails to deposit tax by the specified due date, interest at the ordinary rate for each month and part of a month shall be charged on the outstanding amount for the entire period during which the tax remains unpaid.
(2) For the purpose of calculating the interest payable under sub-section (1), no interest exemption shall be allowed for the extended period granted under Section 98.
Income Tax Act, 2002

Amended by the Finance Act, 2075.(3) The interest payable by a person required to collect advance tax under sub-section (8) of Section 95A., or by a person required to deduct tax at source under sub-section (4) of Section 90, due to non-compliance, shall not be recoverable by such person from the person from whom the advance tax was to be collected or the tax was to be deducted. Added by the Finance Act, 2075.(4) If tax is not paid within the period granted under Section 110A., additional interest at the rate of five percent per annum shall be levied on the outstanding tax and recovered from such person. Amended by the Finance Act, 2081.119A. Fee Levy: (1) If a taxpayer, whether approved or not approved to issue electronic invoices under sub-section (4) of Section 81, is found using software that can delete or alter data, a fee of five hundred thousand rupees shall be levied.
(2) If a person manufacturing, installing, or operating electronic invoice software or equipment under sub-section (4) of Section 81 fails to comply with the procedure issued by the Department, a fee of five hundred thousand rupees shall be levied.
(3) In case of violation of Section 81A., a fee of

129. Department may order to deposit penalty amount: (1) Notwithstanding anything contained elsewhere in this Chapter, if any person, prior to the initiation of court proceedings, admits in writing that he/she has committed any one or more than one offence mentioned in this Chapter other than the offence referred to in Section 126, the Department may order such person to deposit a penalty amount not exceeding the penalty amount leviable for such one or more than one offence.

(2) While issuing an order pursuant to sub-section (1), the Department shall mention in such order the nature of such offence, the penalty amount to be paid, and the date by which the penalty amount must be paid.

(3) An order issued by the Department pursuant to this section shall be final and no appeal shall lie against it. 130. Government of Nepal to be plaintiff: The case under this Chapter shall be instituted by the Government of Nepal as the plaintiff. 131. Investigation and filing of case: (1) The investigation of a case relating to an offence punishable under this Chapter shall be conducted by the designated officer, and the case shall be filed in the concerned District Court within thirty-five days of the completion of such investigation.

(2) While conducting an investigation pursuant to sub-section (1), the investigating officer shall seek the opinion and advice of the government attorney. Chapter-24

Miscellaneous

132.
Income Tax Act, 2002

Chapter-24

Miscellaneous

132. May avail services of expert: The Government of Nepal Amended by the Finance Act, 2075.or the Department may avail the services of a relevant expert for tax examination related work, and the provisions relating to government confidentiality mentioned in Section 84 shall also apply to such expert. 133. Departmental action to be taken: If it is determined that any tax assessment was made negligently, resulting in an increase or decrease in the taxpayer's liability, the Director General may initiate departmental action against the concerned officer who made such assessment or failed to make a revised assessment within the period under sub-section (3) of Section 101, punishable according to the prevailing law relating to his/her service conditions. 134. Identity card of officer: Every officer shall carry an identity card as prescribed, and shall show such identity card to any person who requests to see it in the course of the performance of duty. 135. Powers akin to those of a court: For the purposes of this Act, the Department shall have powers akin to those of a court under the prevailing law in relation to summoning concerned persons, taking statements, examining evidence, and requiring the production of documents. 136. Not liable for acts done in good faith: Notwithstanding anything contained elsewhere in this Act, an officer shall not be personally liable for any act done in good faith in the discharge of his/her duty. 136A. Provision of reward and informer expense: (1) If any person provides information with evidence that a person has evaded or attempted to evade all or part of his/her tax liability, a reward equal to twenty percent of the amount of tax determined based on the evidence submitted by him/her, out of the tax recovered on the basis of such information, may be granted to such person by the decision of the Director General.

(2) If there is more than one person entitled to the reward under sub-section (1), the reward amount shall be distributed proportionately.

(3) Notwithstanding anything contained in sub-section (1), a person providing information about revenue leakage may be given an informer expense up to ten thousand rupees immediately, based on the veracity of the information, according to the procedure prescribed by the Department.

(4) The name, surname, and address of the person providing information under sub-sections (1) and (3) shall be kept confidential. 137. Government of Nepal may issue orders or directives: The Government of Nepal may issue necessary orders or directives to the Department to make tax administration effective. 138. Power to make rules: The Government of Nepal may make necessary rules for the implementation of the objectives of this Act. 139.
Income Tax Act, 2002

143. Repeal, amendment and saving: (1) The Income Tax Act, 2031 and the House and Land Rent Tax Act, 2023 are hereby repealed.

(2) The following Acts are amended as follows: -

(a) Removed by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066

(b) Amendment to the Employee Provident Fund Act, 2019: In clause (b) of Section 18 of the Employee Provident Fund Act, 2019, the words "no tax of any kind shall be levied" are replaced by the words "no tax of any kind other than income tax shall be levied".

(c) Amendment to the Nepal Petroleum Act, 2040: Clause (c) of Section 13 of the Nepal Petroleum Act, 2040 is hereby omitted.

(d) Amendment to Section 29 of the Pension Fund Act, 2042: In Section 29 of the Pension Fund Act, 2042, the words "and no other tax of any kind shall be levied" are replaced by the words "no other tax of any kind other than income tax shall be levied".

(e) Amendment to Section 51 of the Citizen Investment Trust Act, 2047: Section 51 of the Citizen Investment Trust Act, 2047 is hereby repealed.

(f) Amendment to Section 30 of the Nepal Removed by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066 Science and Technology Academy Act, 2048: Section 30 of the Nepal Removed by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066 Science and Technology Academy Act, 2048 is hereby repealed.

(g) Amendment to the Industrial Enterprises Act, 2049:

(1) Clauses (c), (d), (e), (j), (ṭha), (ta), (tha), (da) and (dha) of Section 15 of the Industrial Enterprises Act, 2049 are hereby omitted.

(2) In clause (ca), the words "in income tax, at the rate of thirty, twenty-five and twenty percent respectively for ten years from the date of operation and" are hereby omitted.

(h) Amendment to the Foreign Investment and Technology Transfer Act, 2049: Sub-section (1A) of Section 5 of the Foreign Investment and Technology Transfer Act, 2049 is hereby omitted.

(i) Amendment to the B. P. Koirala Institute of Health Sciences Act, 2049: In the second line of Section 21 of the B. P.
Income Tax Act, 2002

P. Koirala Institute of Health Sciences Act, 2049: In the second line of Section 21 of the B. P. Koirala Institute of Health Sciences Act, 2049, the word "income tax" is hereby omitted.

(j) Amendment to the Tribhuvan University Act, 2049: Sub-section (2) of Section 33 of the Tribhuvan University Act, 2049 is hereby omitted.

(k) Amendment to Section 12 of the Electricity Act, 2049:

(1) In the section heading of Section 12 of the Electricity Act, 2049, the word "income tax" is hereby omitted.

(2) Sub-sections (1), (2), (3), (4), (5) and (6) are hereby omitted.

(l) Amendment to Section 36 of the Pokhara University Act, 2053: Sub-section (2) of Section 36 of the Pokhara University Act, 2053 is hereby omitted.

(m) Amendment to Section 18 of the B.P. Koirala Memorial Cancer Hospital Act, 2053: In sub-section (1) of Section 18 of the B.P. Koirala Memorial Cancer Hospital Act, 2053, the word "income tax" is hereby omitted.

(n) Amendment to the Urban Development Fund Act, 2053: Section 24 of the Urban Development Fund Act, 2053 is hereby repealed.

(o) Sub-section (1) of Section 34 of the Telecommunications Act, 2053 is hereby repealed.

(3) All acts and actions done under the Acts or Sections of Acts repealed or amended pursuant to sub-section (1) or (2) shall be deemed to have been done under this Act.

(4) With respect to provisions relating to the assessment and collection of income tax for income years prior to the commencement of this Act, the provisions of the Income Tax Act, 2031 shall apply. Schedule-1

(Relating to Section 4)

Tax Rates

1.
Income Tax Act, 2002

Schedule-1

(Relating to Section 4)

Tax Rates

1. In respect of a natural person: Amended by the Finance Act, 2079.(1) Tax shall be levied at the following rates on the taxable income of a resident natural person for any income year, subject to sub-sections (2), (4) and (4A) of this Schedule: -

(a) One percent, if the taxable income from employment is up to five hundred thousand rupees,

Added by the Finance Act, 2080.Provided that, in the case of a taxpayer registered as a sole proprietorship firm, income from pension, income of a natural person contributing to a pension fund and a contributory social security fund shall not be subject to tax under this clause.

(b) Where the taxable income exceeds five hundred thousand rupees but does not exceed seven hundred thousand rupees, five thousand rupees on the first five hundred thousand rupees as per clause (a) and ten percent on the taxable income exceeding five hundred thousand rupees,

(c) Where the taxable income exceeds seven hundred thousand rupees but does not exceed ten lakh rupees, twenty-five thousand rupees on the first seven hundred thousand rupees as per clause (b) and twenty percent on the taxable income exceeding seven hundred thousand rupees,

(d) Where the taxable income exceeds ten lakh rupees but does not exceed twenty lakh rupees, eighty-five thousand rupees on the first ten lakh rupees as per clause (c) and thirty percent on the taxable income exceeding ten lakh rupees, and

Amended by the Finance Act, 2080.(e) Where the taxable income exceeds twenty lakh rupees up to fifty lakh rupees, an additional twenty percent on the tax rate applicable under clause (d), and where the taxable income exceeds fifty lakh rupees, an additional thirty percent on the tax rate applicable under clause (d) on the amount of taxable income in excess thereof.
Income Tax Act, 2002

Removed by the Finance Act, 2080

Removed by the Finance Act, 2080.(2) Tax shall be levied at the following rates on the taxable income of any couple opting under Section 50 of the Act for any income year, subject to sub-sections (4) and (4A) of this Schedule: -

(a) One percent, if the taxable income from employment is up to six hundred thousand rupees,

Amended by the Finance Act, 2079.Provided that, in the case of a taxpayer registered as a sole proprietorship firm, income from pension, income of a natural person contributing to a pension fund and a contributory social security fund shall not be subject to tax under this clause.

(b) Where the taxable income exceeds six hundred thousand rupees but does not exceed eight hundred thousand rupees, six thousand rupees on the first six hundred thousand rupees as per clause (a) and ten percent on the taxable income exceeding six hundred thousand rupees,

(c) Where the taxable income exceeds eight hundred thousand rupees but does not exceed eleven lakh rupees, twenty-six thousand rupees on the first eight hundred thousand rupees as per clause (b) and twenty percent on the taxable income exceeding eight hundred thousand rupees,

(d) Where the taxable income exceeds eleven lakh rupees but does not exceed twenty lakh rupees, eighty-six thousand rupees on the first eleven lakh rupees as per clause (c) and thirty percent on the taxable income exceeding eleven lakh rupees,

Amended by the Finance Act, 2080.(e) Where the taxable income exceeds twenty lakh rupees up to fifty lakh rupees, an additional twenty percent on the tax rate applicable under clause (d), and where the taxable income exceeds fifty lakh rupees, an additional thirty percent on the tax rate applicable under clause (d) on the amount of taxable income in excess thereof. Removed by the Finance Act, 2080

Amended by the Finance Act, 2079.(3) The provisions referred to in sub-section (4) shall apply in the following circumstances: -

(a) In relation to a resident natural person, where the income for any income year exceeds five hundred thousand rupees, or in relation to a resident couple opting under Section 50 of the Act, where the income for any income year exceeds six hundred thousand rupees,

(b) The net gain from the disposal of a non-business taxable asset is included in the income of such natural person or couple and in the corresponding calculation of taxable income.