chhatramani/nepal_legal_acts_corpus_english huggingface dataset:
Commodity Exchange Market Act, 2017

24. Insurance Requirement: A commodity trader shall arrange insurance for the commodity trading business as specified by the Board. Chapter – 5

Clearing and Settlement Business

25. Appointment of a Clearing House: (1) The commodity exchange market shall appoint a clearing house for the purpose of clearing and settlement.

(2) While appointing a clearing house, the commodity exchange market shall enter into an agreement as prescribed with the clearing house, and a copy of the agreement shall be submitted by the commodity exchange market to the Board within fifteen days of making such agreement.

(3) The appointment of a clearing house and other related provisions shall be as prescribed. 26. Transactions Conducted by the Clearing House: (1) The clearing house shall clear and settle transactions purchased or sold pursuant to commodity derivatives on the commodity exchange market.

(2) Other transactions relating to clearing and settlement conducted by the clearing house shall be as prescribed. Chapter – 6

Warehouse

27. Designation of Warehouse: (1) For the purpose of conducting transactions pursuant to Section 28, the commodity exchange market may designate an institution licensed under Section 5 as a warehouse.

(2) While designating a warehouse, the commodity exchange market shall enter into an agreement as prescribed with the warehouse, and a copy of the agreement shall be submitted by the commodity exchange market to the Board within fifteen days of making such agreement.

(3) Other provisions relating to the designation of a warehouse by the commodity exchange market shall be as prescribed. 28. Transactions that a Warehouse may Conduct: (1) A warehouse may conduct the following transactions:-

(a) To store commodities related to transactions conducted on the commodity exchange market or to issue certificates related thereto,
(b) To preserve the commodities stored pursuant to clause (a) and to transfer such commodities after the transaction.

(2) Other provisions relating to the operation of a warehouse shall be as prescribed. Chapter – 7

Functions, Duties, and Powers of the Board

29.
Commodity Exchange Market Act, 2017

Chapter – 7

Functions, Duties, and Powers of the Board

29. Functions, Duties, and Powers of the Board: In addition to the functions, duties, and powers mentioned elsewhere in the prevailing law and this Act, the functions, duties, and powers of the Board shall be as follows:-

(a) To advise the Government of Nepal on matters related to the development of the commodity exchange market and commodity transactions,
(b) To approve long-term and short-term plans and policies for the development of the commodity exchange market,
(c) To conduct feasibility studies related to the operation of the commodity exchange market,
(d) To register commodities and commodity derivatives that can be traded on the commodity exchange market,
(e) To order the closure of the commodity exchange market or suspension of transactions of a licensed institution for a specified period,
(f) To direct the concerned commodity exchange market to list or delist a commodity or to freeze a transaction,
(g) To order the suspension of transactions until a problem in the electronic trading system of the commodity exchange market is resolved or improved, if necessary,
(h) To regularize and systematize the purchase, sale, and transfer of commodities and commodity derivatives registered with the Board,
(i) To regulate and monitor the activities of licensed institutions and parties involved in transactions,
(j) To approve the regulations of licensed institutions,
(k) To direct the concerned licensed institution to make necessary arrangements in its regulations to protect the interests of investors,
(l) To coordinate with other regulatory bodies for the supervision and regulation of commodities or commodity derivatives,
(m) To give necessary directives to improve the financial and managerial aspects of licensed institutions,
(n) To perform other functions as prescribed. 30.
Commodity Exchange Market Act, 2017

30. Board may issue Orders or Directives: (1) The Board may, considering the state of the commodity exchange market and transactions and the interest of investors, issue necessary orders or directives to a licensed institution or a party related to the transaction to do or refrain from doing any act according to this Act or the rules or regulations made under this Act.

(2) If a director, official, or employee of a licensed institution violates this Act or the rules or regulations made under this Act or an order or directive given by the Board thereunder, the Board may order the concerned licensed institution to take necessary action against such director, official, or employee.

(3) Based on the inspection or supervision report submitted pursuant to Section 32, the Board may direct a licensed institution or a party related to the transaction or a director or employee of the concerned institution to do or refrain from doing any act according to this Act or the rules or regulations made under this Act. Chapter – 8

Regulation, Inspection, and Supervision

31. Power of Regulation: (1) The Board shall have full authority to regulate, or cause to regulate, licensed institutions and parties related to transactions conducted through the commodity exchange market.

(2) For the purpose of regulation under sub-section (1), the Board may issue orders or directives or publish notices or circulars on matters it deems necessary. 32.
Commodity Exchange Market Act, 2017

32. Power of Inspection and Supervision: (1) The Board may, at any time, inspect or supervise, or cause to inspect or supervise, whether a licensed institution, while conducting transactions, has complied with this Act or the rules, regulations, or orders or directives issued thereunder.

(2) The Board may, by deputing an expert team or an officer employee of the Board as necessary, conduct on-site inspection and supervision of a licensed institution or off-site inspection and supervision by calling for information, data, documents, records, and details available at the concerned licensed institution.

(3) For the purpose of inspection and supervision under sub-section (2), the Board may form an expert team as necessary, and the facility to be received by the expert team shall be as prescribed by the Board at the time of forming such team.

(4) While inspecting and supervising a licensed institution, the expert team or officer employee of the Board under sub-section (2) may inspect and supervise information, data, documents, records, and details related to the transactions of the concerned licensed institution or make inquiries with the concerned person.

(5) In the course of inspection and supervision of a licensed institution, if the expert team or officer employee of the Board conducting the inspection and supervision deems necessary, it may seal information, data, documents, records, and details related to the transactions of the licensed institution, keep a record thereof, and either retain them itself or have them kept in the custody of the licensed institution.

(6) The expert team or officer employee of the Board shall submit a report of the inspection or supervision to the Board within fifteen days from the date of completion of the inspection or supervision of the licensed institution.

(7) Other provisions relating to inspection and supervision shall be as prescribed. 33. Power to Require Information, Data, and Details: (1) The Board may require any information, data, or details related to transactions from a licensed institution or a person related to the transaction.

(2) In the course of inspection and supervision pursuant to Section 32, the Board or a person authorized by the Board may require any information, data, or details it deems necessary from the concerned licensed institution or person.

(3) It shall be the duty of the concerned licensed institution or person to provide the information, data, or details requested pursuant to sub-section (1) or (2). 34.
Commodity Exchange Market Act, 2017

34. Power to Suspend License: (1) If a licensed institution acts contrary to this Act or the rules or regulations made under this Act, fails to comply with an order or directive given by the Board, acts against the interests of investors, or fails to submit financial and transaction-related details required to be submitted to the Board, the Board may suspend the license of such institution for a specified period.

(2) A licensed institution whose license is suspended under sub-section (1) shall not conduct any transactions during the period of suspension. 35. Provisions Relating to Cancellation of License: (1) The Board shall cancel the license of a licensed institution in the following circumstances:-

(a) If the license term expires without renewal under Section 8,
(b) If infrastructure is not arranged under Section 9,
(c) If the commodity exchange market, commodity trading business, clearing and settlement business, or warehouse ceases operation,
(d) If it becomes insolvent under the prevailing law or is dissolved in any manner, or
(e) If an application is submitted for cancellation of the license.

(2) The Board may cancel the license of a licensed institution in the following circumstances:-

(a) If the conditions specified in the license are violated,
(b) If this Act or the rules or regulations made under this Act are violated,
(c) If the commodity exchange market, commodity trading business, clearing and settlement business, or warehouse is operated in a manner detrimental to the interests of investors,
(d) If an order or directive given by the Board is repeatedly violated,
(e) If financial and transaction-related details requested by the Board are not submitted within the period of suspension, or
(f) If amounts payable under this Act are not paid.

(3) Before canceling a license under sub-section (2), the licensed institution shall be given an opportunity to be heard.

(4) The cancellation of a license under sub-sections (1) and (2) shall not affect any liability arising from the activities conducted by the licensed institution prior to the cancellation. 36.
Commodity Exchange Market Act, 2017

37. Power to Impose Fines: (1) The Board shall impose fines as follows on a person who performs the following acts without obtaining a license under Section 5:-

(a) Operating a commodity exchange market or using the name of a commodity exchange market: from ten lakh rupees to fifty lakh rupees,
(b) Operating a clearing and settlement business or a warehouse: from two lakh rupees to ten lakh rupees,
(c) Operating a commodity trading business: from one lakh rupees to five lakh rupees.

(2) If a licensed institution operates transactions contrary to sub-section (3) of Section 9, the Board shall impose a fine of from fifty thousand rupees to three lakh rupees on such institution.

(3) If a licensed institution fails to provide notices and details or submit reports within the period under Section 48 or 49, the Board shall impose a fine of one thousand rupees per day from the day following the expiry of the period for submitting such notices, details, or reports.

(4) The Board may impose a fine of from one lakh rupees to five lakh rupees on a licensed institution that fails to comply with an order, directive, or prescribed condition given under this Act or the rules made under this Act.

(5) The Board may impose a fine of from fifty thousand rupees to two lakh rupees on a director, official, or employee of a licensed institution who fails to submit information, data, documents, records, and details requested in the course of inspection, supervision, or inquiry by the Board under this Act within the prescribed time.

(6) The Board may impose a fine of from two lakh rupees to ten lakh rupees on a licensed institution that fails to maintain or prepare accounts, books, details, or any other such documents required to be maintained, prepared, or submitted under this Act or the rules or regulations made under this Act.

(7) If a licensed institution causes or causes to cause loss or damage to an investor by acting contrary to this Act or the rules or regulations made under this Act or an order or directive given by the Board, the Board shall impose a fine of from ten lakh rupees to fifty lakh rupees on such licensed institution and also order it to compensate the investor for the amount of such loss or damage.

(8) The Board shall impose a fine of from twenty-five thousand rupees to one lakh rupees on a licensed institution that fails to comply with the code of conduct under Section 60. Chapter – 9

Offenses and Penalties

38.
Commodity Exchange Market Act, 2017

Chapter – 9

Offenses and Penalties

38. Limitation for Filing Complaints: (1) For an offense punishable under this Act, a complaint must be filed within one year from the date of knowledge of the commission or intended commission of such offense.

(2) A case must be filed in the concerned Court within six months from the date of the complaint under sub-section (1). 39. Acts Deemed to Constitute an Offense: If a person performs or causes to perform the following acts, it shall be deemed to constitute an offense under this Act:-

(a) Manipulating the price of a commodity by creating artificial or false transactions or circular trading, or by hoarding a large quantity of a commodity for an unusually long period to prevent others from trading in such derivative, thereby stabilizing, increasing, decreasing, or causing frequent fluctuations in the price,
(b) Influencing the commodity exchange market by directly or indirectly affecting transactions or, with the intent to prevent the purchase or sale of a commodity derivative, acting alone or in collusion with others to increase, decrease, or stabilize the market price of the commodity derivative,
(c) Publishing false, misleading, or incorrect details or details relating to future forecasts, or making promises based on such details, or conducting transactions merely to show active trading in a commodity on the commodity exchange market, or fraudulently concealing any fact or information,
(d) Using deceptive technology with the intent to cause loss or damage to someone or to gain wrongful advantage from someone, or misusing technology with such intent, or devising a scheme or doing any act, or engaging in fraudulent transactions by deceiving someone,
(e) Destroying, falsifying, or hiding any instrument, detail, or record maintained by a person under this Act or the rules or regulations made under this Act,
(f) Causing damage to or misusing the electronic trading system established under Section 44 by a licensed institution with the intent to cause loss or damage to someone,
(g) Aiding or abetting any person to perform the acts mentioned in clauses (a) to (f). 40.
Commodity Exchange Market Act, 2017

40. Penalties: (1) A person committing the following offenses shall be liable to the following penalties:-

(a) A person committing an offense under clause (a) of Section 39 shall be liable to confiscation of the proceeds if identified, a fine equal to the proceeds, and if the proceeds are not identified, a fine of up to five lakh rupees and imprisonment for up to five years.
(b) A person committing an offense under clause (b) of Section 39 shall be liable to confiscation of the proceeds if identified, a fine equal to the proceeds, and if the proceeds are not identified, a fine of up to four lakh rupees and imprisonment for up to four years.
(c) A person committing an offense under clause (c), (d), or (e) of Section 39 shall be liable to confiscation of the proceeds if identified, a fine equal to the proceeds, and if the proceeds are not identified, a fine of up to three lakh rupees and imprisonment for up to three years.
(d) A person committing an offense under clause (f) of Section 39 shall be liable to confiscation of the proceeds if identified, a fine equal to the proceeds, and if the proceeds are not identified, a fine of up to ten lakh rupees and imprisonment for up to one year.
(e) A person committing an offense under clause (g) of Section 39 shall be liable to half the penalty imposed on the principal offender.

(2) If a person commits an offense under Section 39 using a licensed institution, the person committing such offense, director, official, or employee of the licensed institution shall be liable to the penalty under sub-section (1).

(3) If the director, official, or employee of the licensed institution under sub-section (2) cannot be identified, the director, official, or employee who was the head of the licensed institution at the time of the commission of such offense shall be liable to the penalty under sub-section (1). Chapter – 10

Miscellaneous

41. Provisions Relating to Fund: (1) In addition to the amounts received under the prevailing law relating to securities, the Fund of the Board shall consist of the following amounts received by the Board under this Act:-

(a) Amount received as application fee,
(b) Amount received as license fee,
(c) Amount received as license renewal fee,
(d) Amount received as fines, and
(e) Any other amount received under this Act.

(2) The use of the amounts received in the Fund under sub-section (1), its accounting, and audit provisions shall be as provided in the prevailing law relating to securities. 42.
Commodity Exchange Market Act, 2017

42. Appointment of Auditor: (1) If a licensed institution fails to get its accounts audited within the prescribed period, or if an auditor cannot be appointed for any other reason, and if it appears necessary to audit the accounts, books, cash, and inventory assets of such licensed institution, the Board may appoint an auditor and cause the audit to be conducted.

(2) The remuneration of the auditor appointed under sub-section (1) shall be borne by the concerned licensed institution. 43. Provisions Relating to Service Fee or Regulatory Fee: (1) The service fee a licensed institution may charge for providing services shall be as prescribed.

(2) The amount as prescribed of the total service fee received by a licensed institution in a fiscal year under sub-section (1) shall be paid to the Board as a regulatory fee. 44. Establishment of Electronic Trading System: (1) A licensed institution shall establish an electronic trading system to enable its transactions to be conducted electronically.

(2) The electronic trading system shall be secure, suitable, and reliable.

(3) The Board may audit, or cause to audit, the electronic trading system as necessary.

(4) If any type of improvement in the electronic trading system appears necessary, the Board may issue necessary directives.

(5) It shall be the duty of the concerned licensed institution to comply with the directives received under sub-section (4). 45. Special Provisions Relating to Commodity Derivatives: (1) The provisions, conditions, and standards applicable to the trading of commodity derivatives (trading of options) made with special provisions regarding rights and obligations for future purchase or sale of commodities shall be as prescribed.

(2) Until such provisions, conditions, and standards under sub-section (1) are applied, trading of such commodity derivatives (trading of options) shall not be permitted. 46. Permissible Transactions on Foreign Commodity Exchange Markets: A commodity exchange market maker, a businessperson acting as the counterparty of a transaction, or a businessperson conducting business of such nature may, in order to manage the risk they must bear by conducting transactions under this Act, purchase or sell commodity derivatives on foreign commodity exchange markets as prescribed. 47. Approval Required for Transactions in Foreign Currency: If it is necessary to conduct commodity transactions in foreign currency, such transactions shall be conducted only after obtaining approval from the concerned body under the prevailing law relating to foreign exchange. 48. Provision of Notice and Details: A licensed institution shall provide the Board with notices and details relating to its transactions or business, as prescribed, within the time as prescribed. 49.
Commodity Exchange Market Act, 2017

48. Provision of Notice and Details: A licensed institution shall provide the Board with notices and details relating to its transactions or business, as prescribed, within the time as prescribed. 49. Submission of Report: A licensed institution shall, within four months of the end of each fiscal year, prepare and submit an annual report to the Board, including details of its activities and commodity transactions conducted during that fiscal year. 50. Publication of Details: The Board shall publish details of its regulatory, inspection, and supervision activities, whether the licensed institution has complied with orders or directives given by the Board under this Act or the rules, regulations, or directives made under this Act, and the notices and details submitted by the licensed institution to the Board under Section 48, as prescribed. 51. Compliance with Orders or Directives: It shall be the duty of the concerned party to comply with the orders or directives given by the Board under this Act or the rules made under this Act. 52. Recovery of Fines: (1) The amount of the fine imposed under Section 37 shall be paid by the concerned person to the Board within thirty days of such imposition.

(2) If the fine amount is not paid within thirty days, the Board may recover it from the movable and immovable property of such person in the manner of recovery of government dues. 53. Right to Appeal: A party aggrieved by the decision to cancel a license under sub-section (2) of Section 35, or to take action under Section 36, or to impose a fine under Section 37, may appeal to the High Court within thirty-five days from the date of knowledge of such decision of the Board. 54. Government of Nepal as Plaintiff: (1) A case relating to an offense under Section 39 shall be filed with the Government of Nepal as the plaintiff, and such offense shall be deemed to be included in Schedule-1 of this text was transformed by Some Nepal Acts Amending, Consolidating, Adjusting and Repealing Act, 2074 and amended by Some Nepal Acts Amending Act relating to the Civil Code, 2075.the Criminal Procedure Code, 2074.

(2) The Board shall provide necessary assistance to the concerned authority while investigating or prosecuting the offense under sub-section (1). 55. Government of Nepal may Issue Directives: The Government of Nepal may, from time to time, issue necessary directives to the Board on policy matters such as the commodity exchange market, commodity trading business, clearing and settlement business, warehouse operation, development of the commodity exchange market, and protection of the interests of investors, and it shall be the duty of the Board to comply with such directives. 56.
Income Tax Act, 2058 (With amendments made by the Finance Act, 2082)

Great Seal and Published Date
2058.12.19

Amending Acts

1. Finance Ordinance, 2059 2059.03.24 and 2059.09.22
2. Finance Ordinance, 2060 2060.04.01 and 2060.10.01
3. Finance Ordinance, 2061 2061.04.01 and 2061.10.01
4. Finance Ordinance, 2062 2062.04.01 and 2062.10.01
5. Ordinance to Amend Certain Nepal Acts Relating to Revenue, 2062 2062.06.16

Certification and Publication Date

6. Act to Amend Certain Nepal Laws, 2063 2063.06.28
7. Finance Act, 2063 2063.07.20
8. Finance Act, 2064 2064.03.28
9. Finance Act, 2065 2065.06.03
10. Finance Act, 2066 2066.08.10
11. Act to Consolidate the Republic and Amend Certain Nepal Laws, 2066 2066.10.07
12. Finance Act, 2067 2067.11.03
13. Finance Act, 2068 2068.03.28
14. Finance Act, 2070 2070.03.30
15. Finance Act, 2071 2071.03.29
16. Act to Amend Certain Nepal Acts, 2072 2072.11.13
17. Finance Act, 2073 2073.02.15
18. Judicial Administration Act, 2073 2073.05.27
19. Finance Act, 2074 2074.05.02
20. Finance Act, 2075 2075.03.32
21. Act to Amend Certain Nepal Acts, 2075 2075.11.19
22. Finance Act, 2076 2076.03.30
23. Finance Act, 2077 2077.03.15
24. Finance Ordinance, 2078 2078.02.15
25. Finance Act, 2078 2078.06.13
26. Finance Act, 2079 2079.03.31
27. Finance Act, 2080 2080.03.31
28. Finance Act, 2081 2081.04.01
29. Finance Act, 2082 2082.03.30

Act No. 22 of 2058

An Act Made to Amend and Consolidate Laws Relating to Income Tax

Preamble: Whereas it is desirable to make the laws relating to income tax timely by amending and consolidating them to enhance revenue mobilization by making effective the process of revenue collection for the economic development of the country,

His Majesty King Gyanendra Bir Bikram Shah Dev has enacted this Act in the first year of his reign with the consent of Parliament. Chapter-1

Preliminary

1. Short Title, Extent, and Commencement: (1) This Act may be called the "Income Tax Act, 2058."

(2) This Act shall apply throughout Nepal amended by the Finance Act, 2063. and shall also apply to a resident person wherever residing outside Nepal amended by the Finance Act, 2063..

(3) This Act shall come into force immediately. 2.
Provided that this term shall not denote the original tax assessment replaced by the revised tax assessment under Section 101.

added by the Finance Act, 2063.(na1) "Transaction" means a transaction equal to the total amount to be included under Section 7, 8, or 9 for the purpose of calculating income from employment, business, or investment of an income year.

(ta) "Non-resident Person" means a person other than a resident person.

added by the Finance Act, 2063.(da) "Non-business Taxable Asset" means land, building, and an interest or security in any entity other than the following assets:-
 (1) Business assets, depreciable assets, or trading stock,
 (2) A private building of a natural person under the following conditions:-
 (a) Owned continuously for ten years or more, and
 (b) The person has resided in it continuously or intermittently for a total of ten years or more,
 Explanation: For the purpose of this clause, "private building" means amended by the Finance Act, 2076. the building, the land occupied by the building, and additional land equal to the area occupied by the building or one ropani of land, whichever is less.
 (3) An interest in a retirement fund of a beneficiary,
 (4) Land, real estate, and a private building transferred by a natural person for a value less than ten lakh rupees, or
 (5) An asset transferred and disposed of by any means other than purchase and sale within three generations.

amended by the Finance Act, 2076.(dha) "Exempt Organization" means the following entities:-
 (1) Entities registered with the Department as tax-exempt organizations as follows:-
 (a) Public welfare, religious, educational, or charitable organizations established for non-profit purposes,
 (b) Amateur sports organizations formed to promote social or sports facilities without benefits to members,
 (2) A political party registered with the Election Commission,
 Provided that such organization shall not be entitled to tax exemption under this clause if any benefit is provided to any person from the assets or amounts received by such organization, except when work is completed according to the purpose of the exempt organization or when any payment is made for assets or services provided to such organization by any person.

(na) "Trust" means an arrangement where a trustee holds property.
Provided that this term shall not denote a partnership, a body corporate, or an entity mentioned under sub-clause (3) of clause (kha).

(pa) "Trustee" means a natural person, Guthi, or other body corporate who holds property in trust, alone or jointly with other natural persons, Guthis, or other bodies corporate, and the term also denotes the following persons:-
 (1) Executor or administrator of the estate of a deceased person,
 (2) Liquidator, receiver, or trustee,
 (3) A person who acts as guardian, director, controller, or manager of the property of an incapacitated person in a private or official capacity,
 (4) A person who manages property under a private foundation or similar foundation, and
 (5) Any other person in a position similar to those mentioned in sub-clauses (1), (2), (3), and (4).

(pha) "Long-term Contract" means a contract under Section 26 where the lease period of the contract exceeds twelve months.

(ba) "Relative" means husband, wife, son, daughter (including adopted son and daughter), father, mother, grandfather, grandmother, elder brother, younger brother, sister-in-law, daughter-in-law, elder sister, younger sister, mother-in-law, father-in-law, brother-in-law (sala), brother-in-law (jethan), sister-in-law (sali), step-mother-in-law, uncle, aunt, nephew, niece, grandson, and granddaughter of a natural person.

(bha) "Entity" means the following institutions or organizations:-
 (1) A partnership, trust, or company,
 amended by the Finance Act, 2076.(2) repealed by the Finance Act, 2076.
District Coordination Committee,
 amended by the Finance Act, 2076.(3) The Government of Nepal, Provincial Government, or Local Level,
 (4) Any foreign government or its provincial or local governments, or a public international organization established by a treaty, or
 (5) A permanent establishment of an entity or organization referred to in sub-clauses (1), (2), (3), and (4) that is not located in the country where it is resident. amended by the Finance Act, 2076.

(ma) "Interest in an Entity" means the right, including a contingent right, to receive income or capital of an entity.

(ya) "Disposal" means the disposal, including sale or transfer, of any asset or liability as referred to in Section 40.

(ra) "Beneficial Ownership" means the following ownership:-
 (1) Ownership created in relation to an entity based on an interest held directly or indirectly through one or more intermediary entities by a natural person or an entity without any interest of a natural person, or
 (2) Ownership of an asset owned by an entity, determined on the basis of the proportional ownership of persons having beneficial ownership in that entity.

(la) "Lease" means a temporary right of one person to use an asset other than cash assets of another person, and the term also denotes a license, rental agreement, option, royalty agreement, or lessee's interest.

(wa) "Natural Person" means a specific natural person, and for the purposes of this Act, the term also denotes a sole proprietorship owned by a natural person, whether registered or not, and a couple selected under Section 50 to be treated as a single natural person.

added by the Finance Act, 2076.(sha) "Payment for Natural Resources" means a payment amount for any of the following:-
 (1) Payment for obtaining the right to extract water, minerals, or other living or non-living resources from the land, or
 (2) An amount calculated on the basis of the volume or value of natural resources and minerals extracted wholly or partially from the land, whether living or non-living.

(sha) "Market Value" means the normal transaction value of an asset or service in the ordinary course of market dealings between unrelated persons.

amended by the Finance Act, 2076.(sa) "Rent" means all payments, including premium, under the lease and rental of tangible assets, including house rent.
Provided that this term shall not denote payment for natural resources or an amount received as house rent by a natural person other than a sole proprietorship.

(ha) "Payment" means the following actions:-
 (1) Transfer of money or asset of one person to the name of another person and transfer of liability of one person to the name of that other person,
 (2) Where an asset created by one person becomes owned by another person after its creation, or where the burden of a liability of one person is borne by another person,
 (3) Where one person provides a service to another person,
 (4) Where an asset owned by one person is used by another person or made available for use.

(khya) "Distribution of Profit" means the distribution of profit by an entity under Section 53, including capitalization of profit.

(tra) "Unit Trust" means a trust in which a trustee holds property for the benefit of at least twenty persons, and the right of persons to participate in income or capital is divided on a basis determined by the number of units held.

added by the Finance Act, 2076.(tra1) "Contribution-based Retirement Payment" means a payment of an amount deposited in an approved retirement fund from income included in a natural person's income, along with the amount increased on that amount.

(gya) "Employment" means any type of past, present, or future employment.

(kak) "Royalty" means any payment made under a lease of intangible assets, and the term also denotes any payment made for the following purposes:-
 (1) Use, or right to use, copyright, patent, design, model, plan, secret formula or process, or trademark,
 (2) Providing technical knowledge,
 (3) Use, or right to use, cinematographic film, video tape, sound recording, or any other similar medium, or use or provision of industrial, commercial, or amended by the Finance Act, 2076. scientific experience,
 (4) Providing any assistance auxiliary to matters under sub-clauses (1), (2), or (3), or
 (5) Accepting full or partial restriction in relation to matters under sub-clauses (1), (2), (3), or (4). Provided this term shall not denote payment for natural resources.

added by the Finance Act, 2076.(kakha) "Investment" means the act of holding or investing in one or more assets, except as follows:-
 (1) Holding an asset used for personal purposes by the owner,
 (2) Employment or business.
Provided this term shall not denote payment for natural resources.

added by the Finance Act, 2076.(kakha) "Investment" means the act of holding or investing in one or more assets, except as follows:-
 (1) Holding an asset used for personal purposes by the owner,
 (2) Employment or business. Provided that holding a non-business taxable asset shall be considered an investment.

(kaga) "Investment Insurance" means any of the following insurances:-
 (1) Insurance in respect of an event relating to the death of the insured person or a related person of the insured person,
 (2) Insurance in respect of an event relating to personal injury or specific incapacitation of the insured person or a related person,
 Provided that the insurance contract must remain in force for at least five years or have no time limit, and must not be terminable by the insurer before the expiry of five years except in special circumstances specified in the contract.
 (3) Insurance where an amount or series of amounts is payable to the insured in the future,
 (4) Reinsurance of insurance under sub-clauses (1), (2), or (3), and
 (5) Reinsurance of reinsurance referred to in sub-clause (4).

(kagha) "Dividend" means a distribution made by an entity.

(kanga) "Resident Person" means the following persons in relation to an income year:-
 (1) In the case of a natural person,-
 (a) Whose ordinary place of residence is in Nepal,
 (b) amended by the Finance Act, 2063.
Who is present in Nepal for 183 days or more in an uninterrupted period of 365 days, or
 (c) Who is deputed abroad by the Government of Nepal at any time during the income year.
 (2) A partnership firm,
 (3) In the case of a trust, such trust which,-
 (a) Is established in Nepal,
 (b) Whose trustee is a resident person during the income year, added by the Finance Act, 2063. or
 (c) Is controlled during the income year by a resident person or a group of persons involving them, directly or through one or more interposed entities.
 (4) In the case of a company, such company which,-
 (a) Is incorporated under the law of Nepal, added by the Finance Act, 2063. or
 (b) Has its effective management in Nepal during any income year.
 added by the Finance Act, 2063.(4a) The Government of Nepal or Provincial Government,
 amended by the Finance Act, 2063.(5) Rural Municipality, Municipality, or District Coordination Committee,
 (6) Such entity of a foreign government or its provincial added by the Finance Act, 2063. or local government which,-
 (a) Is established under the law of Nepal, or
 (b) Has its effective management in Nepal during any income year.
 (7) An institution or entity established under a treaty, and
 (8) A foreign permanent establishment of a non-resident person in Nepal.

(kacha) "Person" means a natural person or an entity.

(kachha) "Manager" means a person involved in making managerial decisions of an entity, and the term also denotes a trustee of a trust and a person who has ownership in a foreign permanent establishment.

(kaja) "Business" means any type of industry, trade, profession, or other commercial transaction of a similar nature, and the term also denotes past, present, or future businesses of a similar kind. Provided that this term shall not denote employment.

(kajha) "Interest" means the following payments or benefits:-
 (1) Payment under a debt obligation other than principal,
 (2) Benefit obtained through discount, amended by the Finance Act, 2063. premium, swap payment, or similar payment under a debt obligation, and
 (3) Amounts under Section 31 treated as interest in payments made for the use of an asset under an annuity or installment sale or under a financial lease.

(kata) "Trading Stock" means assets owned by a person and sold in the course of the regular business conducted by that person, assets in progress, and inventory of materials to be included in assets. amended by the Finance Act, 2063. Provided that this term shall not denote assets in foreign currency.

(katha) "Business Asset" means any asset used in a business.
Provided that this term shall not denote assets in foreign currency.

(katha) "Business Asset" means any asset used in a business. Provided that this term shall not denote trading stock or depreciable assets of a business.

(kadha) "Distribution" means a distribution made by an entity as referred to in Section 53.

added by the Finance Act, 2063.(kadha1) "Electronic Medium" means computer, fax, email, internet, electronic cash machine, fiscal printer, and the term also denotes other approved means specified by the Department.

(kana) "Remitted Income" means income required to be remitted abroad by a foreign permanent establishment of a non-resident person located in Nepal under Section 68, whether remitted through a bank or paid in any other manner.

(kana) "Foreign Income Tax" means the foreign income tax referred to in sub-section (8) of Section 69 imposed by a foreign country, and the term also denotes final withholding tax imposed by a foreign country.

(kanha) "Foreign Permanent Establishment" means an entity under sub-clause (5) of clause (i). amended by the Finance Act, 2063.

(kata) "Department" means the Inland Revenue Department.

(katha) "Asset in Foreign Currency" means an asset in a foreign currency other than Nepalese Rupees.

(kada) "Permanent Establishment" means a place where a person carries on business wholly or partially, and the term also denotes the following places:-
 (1) A place where a person carries on business wholly or partially through an agent, other than a general agent acting independently in the ordinary course of business,
 (2) A place where the main equipment or main machinery of a person is located, used, or installed,
 (3) One or more places in a country where a person provides technical, professional, or consultancy services through employees or otherwise for more than ninety days in aggregate in any twelve-month period, or
 (4) A place where a person is engaged in a project of construction, installation, or establishment for ninety days or more, and a place where activities related to the supervision of such project are carried out.
amended by the Finance Act, 2063.(5)

(kadha) "Asset" means any type of tangible or intangible asset, and the term also denotes currency, goodwill, technical knowledge, estate, ownership or interest in a foreign branch of a person, the right to earn or receive income in the future, and any part of such asset.

(kana) "Associated Person" means one or more persons or a group of such persons acting according to the intention of another person, and the term also denotes the following persons:-
 (1) A natural person and the relative or partner of such person,
 (2) A foreign permanent establishment and the person having ownership in such establishment, and
 (3) An entity that controls or benefits from fifty percent or more of the income, capital, or voting rights of another entity, either alone or together with any other person or associated entity related to it, or with any other person or entity related to such associated entity.
Provided that the following persons shall not be associated persons:-
 (1) Employees,
 (2) Persons specified by the Department as not being associated persons.

added by the Finance Act, 2063.(kana1) "Adjusted Taxable Income" means the taxable income calculated without deducting any amount under Sections 12, 12a, 12b, and 12c and without deducting under sub-section (2) of Section 14, Section 17, or Section 18, when calculating the taxable income of any person for any income year.

(kapa) "Partnership" means a firm with less than twenty partners, whether registered or not under prevailing law. Provided that this term shall not denote a registered or unregistered sole proprietorship or joint venture.

(kapha) "General Insurance" means insurance other than investment insurance.

(kawa) "Normal Interest Rate" means an annual interest rate of amended by the Finance Act, 2063. fifteen percent.

(kabha) "Approved Retirement Fund" means a retirement fund that has obtained approval from the Department under sub-section (1) of Section 63.

(kama) "Service Fee" means any fee paid to a person at market value for a service provided by that person, and the term also denotes added by the Finance Act, 2063. meeting allowance, management fee, or technical service fee.

(kaya) "Shareholder" means a beneficiary person of a company.

(kara) "Depreciable Asset" means an asset used in a business or investment for earning income, which depreciates in value due to wear and tear, obsolescence, or efflux of time. Provided that this term shall not denote trading stock.

(kala) "Beneficiary" means a person having an interest under clause (ma) in an entity. amended by the Finance Act, 2063.

(kava) "Prescribed" or "as prescribed" means prescribed in the rules made under this Act. Chapter-2

Basis of Taxation

3. Imposition of Tax: The following persons shall be subject to tax levied and collected under this Act for each income year:-
(a) A person having taxable income in any income year,
(b) A foreign permanent establishment located in Nepal of a non-resident person that remits income for any income year under sub-sections (3) and (4) of Section 68, and
(c) A person who receives a payment subject to final withholding in any income year. 3a. 4.
3a. 4. Calculation of Tax and Tax Rate: amended by the Finance Act, 2059.(1) The amount of tax payable by any person referred to in Section 3 for an income year shall be equal to the total amount of tax payable by that person in the capacity of one or more of the persons referred to in clauses (a), (b), and (c) of that section.
(2) When calculating the tax payable by any person under clause (a) of Section 3, the taxable income of that person for that income year shall be subject to the relevant rates specified in Schedule 1. While calculating tax in this manner, any tax credit amount claimed by that person under Section 51 or Section 71 added by the Finance Act, 2063. or both sections shall be deducted.
(3) Notwithstanding anything contained in sub-section (2), the tax payable by a resident natural person under clause (a) of Section 3 who fulfills all of the following conditions shall be equal to the total amount of tax withheld under Section 87 from payments made by the employer to such resident natural person during that income year:-
 (a) The income for that income year includes only income from employment sourced in Nepal,
 (b) All employers during that income year are resident persons, and there is only one employer at a time, and
 (c) added by the Finance Act, 2063. Only the tax credit for medical expenses paid by the employer and the retirement contribution paid by the employer are claimed as deductions, and no deduction is claimed for charitable expenditure under Section 12.
(4) Notwithstanding anything contained in sub-section (2), the tax payable by a resident natural person under clause (a) of Section 3 who fulfills all of the following conditions for any income year shall be equal to the amount specified in sub-section (7) of Section 1 of Schedule 1:-
 (a) The person has only income from business sourced in Nepal during that income year,
 (a1) added by the Finance Act, 2063. Does not claim tax credit under Section 51 for medical expenses and under Section 93 for advance tax withholding,
 (b) amended by the Finance Act, 2063. Taxable income from business is up to three lakh rupees and the business turnover does not exceed thirty lakh rupees,
 (c) added by the Finance Act, 2063.
 (d) added by the Finance Act, 2063.
(4a) added by the Finance Act, 2063.
Taxable income from business is up to three lakh rupees and the business turnover does not exceed thirty lakh rupees,
 (c) added by the Finance Act, 2063.
 (d) added by the Finance Act, 2063.
(4a) added by the Finance Act, 2063. Notwithstanding anything contained in sub-section (2), the tax payable by a resident natural person under clause (a) of Section 3 who fulfills the following conditions for any income year, based on turnover, shall be equal to the amount calculated at the rate specified in sub-section (17) of Section 1 of Schedule 1:-
 (a) The person has only income from business sourced in Nepal during that income year,
 (b) amended by the Finance Act, 2063. Taxable income from business is up to ten lakh rupees and the business turnover exceeds thirty lakh rupees but added by the Finance Act, 2072. does not exceed one crore rupees,
 (c) added by the Finance Act, 2063.
 (d) The income is not from consultancy and specialized services provided by natural persons including doctors, engineers, auditors, legal practitioners, athletes, artists, and consultants.
(4b) added by the Finance Act, 2063. Notwithstanding anything contained in sub-sections (4) and (4a), such person must have opted for this provision to apply for that income year.
(5) When calculating the tax payable by a foreign permanent establishment under clause (b) of Section 3, such establishment shall apply the rate specified in sub-section (6) of Section 2 of Schedule 1 to the income remitted abroad during that income year.
(6) The tax payable by a person under clause (c) of Section 3 shall be equal to the total amount calculated by applying the rates specified in Sections amended by the Finance Act, 2063. 87, 88, 88a, and 89 to each final withholding payment received by that person during that income year. 5. Taxable Income and Classification of Heads of Income: The taxable income of any person for any income year shall be equal to the total amount of determinable income under each of the following heads of income for that year, after deducting added by the Finance Act, 2063. any amount claimed under Section 12, 12a, 12b, 12c, 63, or all of these sections:-
 (a) Business,
 (b) Employment, added by the Finance Act, 2063.
 (c) Investment, and
 (d) added by the Finance Act, 2063. Casual gain. 6. repealed by the Finance Act, 2063.