Section 67 : Source of income, loss, profit and payment:

a) The amounts with source in Nepal included in computing the income,

b) The amounts with source in Nepal deducted in computing the income.

2) In cases where in the loss suffered from any employment, business or investment of any person, the amounts mentioned in clause (a) exceed the amounts mentioned in clause (b), the amounts to the extent of such excess shall be deemed to have source in Nepal.

a) The amounts with source in Nepal to be deducted in computing the income of the business or investment,

b) The amounts with source in Nepal included in computing the income.

3) The amounts to be included in computing the income shall be deemed to have source in Nepal in the following circumstances:-

a) The net profits referred to in clause (c) of Subsection (2) of Section 7 or clause (b) of Sub-section (2) of Section 9 to be set by subtracting the loss suffered from the disposal of the property or liability with source in Nepal from the profit made from the disposal of the property or liability with source in Nepal,

b) In cases where a property situated in Nepal or a liability to be borne in Nepal is included, the profits and amounts to be included in computing the income as mentioned in clause (d) of Sub-section (2) of Section 7 or clause (c) of Sub-section (2) of Section 9,

c) Received payments with source in Nepal, subject to clauses (a) and (b).

4) In cases where a property situated in Nepal or a liability to be borne in Nepal is included, the source of profit or loss made or suffered from the disposal of the property or liability shall be deemed to have source in Nepal.

5) In cases where the following amounts are included in the amounts deducted in assessing the income, the source of such amounts shall be deemed to be in Nepal:-

a) The amount that can be deducted as cost expenditure mentioned in Sub-section (1) of Section 15 in respect of the properties situated in Nepal,

b) The expenses referred to in Sub-section (1) of Section 16 in respect of the properties situated in Nepal, and the expenses to the extent allowed to be deducted pursuant to Section 19, and

c) The payments with source in Nepal, subject to clauses (a) and (b).

6) The following payments shall be deemed to have source in Nepal:-

a) Dividends paid by a resident entity,

b) Interest paid by a resident person,

c) Payment for natural resources made in respect of the natural resource derived from the land situated in Nepal or calculated with reference to such source,

d) Rent paid for the use of any property situated in Nepal,

e) Royalty received by any person for having allowed any one to use any property situated in Nepal or accepting the right to use the property or the restriction on the use of such property,

f) Amount for the general insurance paid by any person in respect of insurance against risks in Nepal and premium paid to that person for general insurance,

g) Payments received by any person as follows by operating inland, sea or air transport or charter service business in Nepal except as a result of transshipment:

(1) The carriage of departing passengers, or

(2) The shipment of mail, livestock or other direct movable property.

h) Payments received by a person who carries a business of dispatching information or news through means of communication such as wire, radio, optical fiber or satellite in respect of dispatch of news or information through networks established in Nepal, irrespective of whether or not such news or information is originated in Nepal,

i) Payments in the following circumstances inclusive of service charges of the kinds not mentioned in clauses (g) or (h) for doing employment or rendering service or accepting restriction in those acts:

      (1) Where the acts are carried out in Nepal irrespective of the place of payment, or

     (2) Where Government of Nepal is to make payment irrespective of the place of such acts.

j) Annuities, amount for investment insurance and retirement pension paid by a resident person, which does not fall under clause (i), and any premium or other payment paid to the resident person in order to ensure such amounts,

k) Gifts received in respect of a business or investment operated from the property situated in Nepal, and

l) The following payments except those mentioned in clauses (a), (b), (c), (d), (e), (f), (g), (h), (i), (j) and (k), above:-

   (1) Payments made in respect of disposal of the property situated in Nepal or in respect of acquiring liability to be borne in Nepal, or

   (2) Payments made in respect of activities carried out in Nepal.

7) Any income, loss, amount, profit or payment except the one which is deemed to have source in Nepal as mentioned in the abovementioned Sub-sections, and the references to Nepal given in this Act shall be applicable as if they were used in the case of any particular foreign country for purposes of ascertaining as to which country such income, loss, amount, profit or payment has source in.

Explanation: For purposes of this Section,-

(a) "Property situated in Nepal" means the land or buildings situated in Nepal and the property other than land or building of a resident person situated in any foreign country or if the person is associated with a controlled foreign entity pursuant to Section 69, inclusive his interest in that entity.

(b) "Liability to be borne in Nepal" means the liability of a resident person.