Self-assessment Nepal

Detailed Guide to Income Tax Act of Nepal 2058 (2002): Rules, Rates, Exemptions

The Income Tax Act of Nepal, 2058 (2002), serves as the cornerstone of Nepal’s taxation framework. This comprehensive legislation governs the assessment, collection, and administration of taxes on income earned by individuals, businesses, and foreign entities operating within Nepal. The Act categorizes income into employment, business, and investment, with detailed guidelines on taxable income, allowable deductions, exemptions, and non-deductible expenses. Notable features include progressive tax rates, tax holidays for special industries, deductions for social security payments, and clear provisions for business loss carryforwards. It also promotes compliance via self-assessment and encourages development through tax incentives in key sectors like agriculture, IT, and infrastructure. Designed to ensure fairness and efficiency in tax administration, the Income Tax Act plays a crucial role in Nepal’s fiscal strategy and economic growth. Discover the full legal breakdown, eligibility, and benefits in this detailed guide.