(1) Tax shall be levied by the following rate on the taxable income of any resident natural person in any income year, subject to Sub-sections (2) and (4) of this Schedule:-

(a) No tax shall be levied on the taxable income not exceeding Fifty -five Thousand Rupees,

(b) Where the taxable income is more than Fifty-five Thousand Rupees but less than One Hundred thirty Thousand Rupees, Fifteen percent on the taxable income of more than Fifty-five Thousand Rupees, and

(c) Where the taxable income is more than One Hundred thirty Thousand Rupees, Rs.11,250.00 on the taxable income up to One Hundred Thirty
Thousand Rupees and Twenty-Five percent on the taxable income exceeding One Hundred Thirty Thousand Rupees.

(2) Tax shall be levied by the following rates on the taxable income of any spouse making a choice pursuant to Section 50 in any income year, subject to Sub-sections (4) of this Schedule:-

(a) No tax shall be levied on the taxable income not exceeding Seventy-Five Thousand Rupees,

(b) Where the taxable income is more than Seventy- Five Thousand Rupees but less than One Hundred Fifty Thousand Rupees, Fifteen percent on the
taxable income exceeding Seventy-Five Thousand
Rupees, and
(c) Where the taxable income is more than One Hundred Fifty Thousand Rupees, Rs.11,250.00 on the taxable income up to One Hundred Fifty
Thousand Rupees and twenty-five percent on the taxable income exceeding One Hundred Fifty Thousand Rupees.

(3) The provision contained in Sub-section (4) of this Schedule shall apply in the following circumstances:-
(a) In the case of a resident natural person, where the income is more than Fifty-five Thousand Rupees in any income year or in the case of a resident spouse who has not made a choice referred to in Section 50, , where the income is more than Seventy-Five Thousand Rupees in any income year, and

(b) Where the net profit derived from the disposal of non-business taxable property is included in the computation of the income and corresponding taxable income of that natural person or spouse.

(4) Tax shall be levied by the following rate on the following person, subject to Sub-section (3) of this Schedule:-
(a) Tax shall be levied by the rate referred to in Subsection (1) or (2) of this Schedule on the amount whichever is higher out of the following amounts, as if only it were the taxable income of that natural person or spouse:

(1) The amount remaining balance after subtracting the amount of profit from the
total taxable income of that natural person or spouse, or

(2) Fifty-five Thousand Rupees, in the case of a natural person, or Seventy-Five Thousand
Rupees, in the case of a spouse.

(b) Tax shall be levied by ten percent on the remaining
amount of the taxable income.

Provided that, tax shall be deducted only by six percent on the provident fund or gratuity paid
from an approved retirement fund.

(5) For the natural persons residing in the remote areas specified by Government of Nepal, a maximum sum of thirty Thousand Rupees may, for the remote allowance, be added, as prescribed, to the threshold of non-taxable amount of Fifty -five Thousand Rupees and Seventy-Five Thousand Rupees mentioned in Sub-sections (1), (2), (3) and (4) of this Schedule.

(6) The threshold as referred to in Sub-section (4) of Section 4 of this Act shall be an income of One Hundred Thousand Rupees and a turnover equivalent to one million rupees.

(7) The amount of tax pursuant to Sub-section (4) of Section 4 of this Act shall be as follows:-

(a) In the case of a natural person carrying on a business in the municipal corporation or submunicipal corporation area, two Thousand Rupees,

(b) In the case of a natural person carrying on a business in the municipal area, one thousand five hundred rupees,

(c) In the case of a natural person carrying on a business in any other place, one Thousand Rupees.

(8) Tax shall be levied by twenty-five percent on the taxable income of a non-resident natural person in any income year.

(9) Notwithstanding anything contained elsewhere in this Section, in cases where any resident natural person has a pension income, tax shall be computed pursuant to this Section only on the amount remaining balance after subtracting an additional twenty-five percent of the amount mentioned in clause (a) of Sub-section (1) for the natural person or in clause (a) of Sub-section (2) for the spouse from the taxable income.

2. In the case of entity: 

(1) Tax shall be levied by twenty-five percent on the taxable income of any entity in any income year, subject to Subsections (2), (3), (4), (5) and (7) of this  Section.

(2) Tax shall be levied by thirty percent on the taxable income of any bank, financial institution, an entity carrying on general insurance business or petroleum works pursuant to the Nepal Petroleum Act, 2040(1983), in any income year.

Explanation: "Taxable income", in the case of petroleum works, means the taxable income assessed in accordance with the procedures mentioned in the petroleum agreement and this Act and the Rules framed under this Act.

(3) Tax shall be levied by twenty percent on the taxable income of any entity earned in any income year as follows from the source in Nepal:

(a) In cases where the entity is fully involved throughout any year in the operation of a special industry mentioned in Section 11 of this Act,

(b) In cases where the entity,-
(1) Builds and operates any road, bridge, tunnel, ropeway or sky-bridge, or
(2) Operates any trolley bus or tram.

(4) In cases where, in any income year, any entity carries on projects such as to build, operate any public infrastructure project and transfer it to Government of Nepal and building power-house, generation and transmission of electricity, tax shall be levied by twenty percent on the taxable income of that entity.

(5) In the case of the money of any deceased resident person or the taxable income of the trust of a disabled resident person, tax shall be levied on such money or taxable income pursuant to Sub-sections (1) and (4) of Section 1 of this Schedule as if the money or trust resident were a natural person.

(6) Tax shall be levied by ten percent on the income sent abroad by any non-resident person's foreign permanent establishment situated in Nepal in any income year.

(7) Tax shall be levied by five percent on the taxable income of any non-resident person in respect of the income mentioned in Section 70 in any income year.