7. Tax Rates

- The taxable income of a resident individual for an
income-year will be taxed at the following rates:

Up to Rs.100, 000 -
Not taxable

From Rs.100,000 - upto Rs.1,75,000- @ 15 %

Above Rs.
1,75,000 - @ 25% plus Rs.11250.

- The taxable income of a couple, if
they chose to be treated as a couple will be taxed at the following rates;


Up to Rs.125,000 - Not taxable

From Rs.125,000 - upto
Rs.2,00,000- @ 15 %.

Above Rs. 2,00,000 - @ 25% plus Rs.11250.

-
Any individual or couple having pension income can enjoy 25 percent of the
normal exemption limit as an additional basic exemption.

- Any
individual working in prescribed remote area is entitled to deduct prescribed
amount as remote area allowance from taxable income.

- Any individual is
entitled to deduct the following amount from taxable amount, if he is having
investment insurance policy :
"Rs. 10,000 or 7% of insured amount or the
actual premium paid, which ever is less."

- Special duty on taxable
income is reduced to 1.5%.

- For the purposes of the Act, net gains from
the disposal of non-business chargeable assets will be taxed at the rate of 10
percent.

- The presumptive tax for individuals conducting small
businesses (who have a turnover of Rs.1.5 million or an income of Rs.150, 000)
in the Metropolitan or Sub-Metropolitans, Municipalities and anywhere else in
Nepal amounts to Rs 2,000 Rs. 1,500 and Rs.1, 000 respectively.

- The
taxable income of a non-resident individual is taxed at the rate of 25 percent.


- The taxable income of an entity will be taxed at the rate of 25
percent unless prescribed otherwise.

- The taxable income of a bank, or
financial institution, or general insurance business, or an entity conducting
petroleum work under Petroleum Act, 2040 for an income-year is taxed at the rate
of 30 percent.

- Gain from Lump sum retirement payment made by an
approved retirement fund or HMG/N is taxed at the rate of 6 percent as a final
withholding tax.Gain is calculated by deducting 50 percent of the payment or Rs.
500,000 whichever is higher from the total lump sum payment.

- The
taxable income derived by an individual from special industry or export business
will be taxed at the rate of 20 percent.

- The taxable Income derived by
an entity engaged in an industrial enterprise or export business or derived from
operating any road, bridge, tunnel, ropeway, or flying bridge. Construction
business or any trolley bus or tram manufacturing business is taxed at the rate
of 20 percent.

- The taxable income of an entity engaged in power
generation, transmission, or distribution is taxed at the rate of 20 percent.


- The taxable income of an estate of a deceased resident individual or
trust of an incapacitated resident individual will be taxed at the normal tax
rate as though the estate or trust was a resident individual.

- The
repatriated income of a foreign permanent establishment of a non-resident person
situated in Nepal will be taxed at the rate of 10 percent.

- The taxable
income of a non-resident person deriving income from providing shipping, air
transport or telecommunication services in Nepal will be taxed at the rate of 5
percent.

- The taxable income of an entity wholly engaged in the
projects conducted by any entity so as to build public infrastructure, own
operate and transfer it to the HMG/N in power generation, transmission, or
distribution for an income-year shall be taxed at the rate of 20 percent.