Amendment to Income Tax Act in English 2077/78 by Finance Bill of Fiscal Year 2077/78 (2020-21)

Section Existing Provision (2076/77) New Provision (2077/78) Comment
10(ta) No provision Water and Waste management Industry registered under Water resource act 2049.

Exemption Provided for Water
and Waste Management

11(2) Word: Financial Transaction Financial Transaction Word is repealed

Rebate under this section is not
applicable to cooperative carrying
financial transaction


"Under developed" word is replaced with "Less Developed"
"10 Years from operation of industry"
is replaced with "10 years form teh date of Commercial production
or beginning of transaction


Word: "Special Industry"
"with 1 billion capital and 500+ employee"


"Special Industry" is replaced with "Special Industry and tourism industry except casino" and
"Capital increased to 1 billion and employment to 500" is replaced with " capital increased to
2 billion andemployment provided to 300"

11(3kha) Word: "Petrolium and Natural Gas" Replaced with "Petrolium products, natural gas and fuel"  
11(3ga) Word: "Technology park and biotech park" Replaced with "zoological, geological, biotech park, IT park"  
11(3gha)   Added: "date of commercial production of Hydroelectricity" after "licensed institution"  

3cha) Any entity carried following transaction is
provided rebate as following till 10 years from
the date of commercial operation

Operation of Tram or trolly bus 20% 
Build and operation of rope way, cable car,
overhead bridge 20%
Build and operate raod/bridge/tunne way 52%
Invest and Operate tram/trolly bus 52%

Provision Replaced:
3cha) Any entity carried following transaction is provided rebate as following till 10 years
from the date of commercial operation

a) Operation of Tram or trolly bus 40%

b) Build and operation of rope way, cable car, overhead bridge 40% 

c) Build and operate Road, bridge, tunnel, tunnel way, railway, airport 50%

11(3ja)   3ja) Fruit based brandy, cider and wine production industry in Undeveloped and
underdeveloped rebate is provided 40% and 50% respectively
Under deeveloped are is
added on exemption
11(3ta)   Proviso Clause is removed  

5 years
7 years

Provision relating to Micro and Cottage industry
5 year replaced with 7 Years
7 year replaced with 10 Years

11(3dha)   3dha) Industry established in Special Economic Zone and Indsutrial Zone are provided
tax rebate of 25% for 5 years from operation
11(6)(b) Indsutrial Enterprise Act 2073 Word Replaced with: "Industrial Enterprise Act 2076"  


Word "Section 15 of
Indsutrial Enterprise Act 2073 "
Replaced with "Section 17 of Indsutrial Enterprise Act 2073 "  

Provision replaced:
d1) Salary and wages provided to employee and labour without PAN except for casual labour wage upto 3,000.


Provision Replaced
d2) Invoice without mentioning PAN Number
Provided that

Purchase of agrobased, forest based, animal based produces from Natural person not doing
business and not having PAN is allowed for deduction

47A(6) Word: 2077 Ashad end Replaced with "2078 Ashad End"  
47A(7) Word: 2078 Ashad End Replaced with "2079 Ashad End"  
78A No Provision

78A) Suspension of Permanent Account Number
1) Department can suspend the PAN  in following case

a) Transaction is ceased

b) In case of entity is liquidated, sold or transfered or entity is ceased to exist in any way

c) In case of natural person, Death of natural persion

d) Registered by way of error

2) Provision relating to suspension of PAN shall be as prescribed.


88(1) Proviso Clause    
88(1)(5)(c) VAT refund on electronic payment Deleted  
88(1)(8) 8) At the rate of 2.5 Percent on rent paid on
transportation service.

8) At the rate of 2.5 Percent on rent paid on transportation service.

Provided that, Deduction to be made at 1.5% if service is provided by person registered in VAT.

88(1)(9) No provision 9) Interest paid by resident Bank and Financial Institution on loan disbursed in foreign currency on the
area prescribed by Nepal Rastra Bank at the rate of 10%
88(1)(10) No provision 10) No tds to be deducted on Commission paid for promotion of electronic payment on payment made by
consumer viaelectronic medium under prevailin law through payment card, e-wallet, mobile banking
89(3)(a) Word: Aircraft maintainance and other "Aircraft maintainance and other" deleted  
90(8)   Addition of Phrase at end:
"and fees to be chargable on advace tax deductible under Section 120."
95A(6A) No provision 6A) Resident bank and financial institution shall collect tax at 15% on payment of Fee for language training and
certification examination fee at the time of conversion of currency.
117(1)(b)   Word "Subsection 8" is replaced with "Sub-Section 9"  
  Amendment in Schedule    
Sch.1-1(2)(e) Word: Pension and Contribution based
pension fund
Replaced With:
Pension, Contribution based pension fund, Contribution based Social Security Fund
Sch.1-1(9)   Section Deleted Pension income exemption
Sch 1- 2(3)  

2(3) Tax rate of cooperative shall be applicable as follows:

a) Operated on municipality - 5%

b) Operated on Sub Metropolitan -7%

c) Operated on Metropolitan -10%

Sch 2- 3(2)  

Provision Replaced:
3(2) Industry mentioned in Section 19(2) and Section 11(2b), (3cha), (3tha) and Schedule 2 Section 2(3) are allowed to
charge additional 1/3 accelerated depreciation for Pool ABC, D.



Amendment in Fiscal Year 2076/77

1) Taxation on Presumptive Basis Section 4(4) Tax Rebate of 75% on the applicable tax rate

2) Person paying turnover taxation 50% rebate on applicable tax

3) Person having turnover upto 1 Crore 25% rebate in income tax

4) Hotel and tourism industry rebate on income tax at 20%






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