(1) The industries registered under this Act shall be provided with the following income tax exemptions, facilities or concessions:-
(a) There will be twenty percent discount on the tax rate on income earned from manufacturing industries.
(b) If you invest and operate construction industries such as roads, bridges, tunnels, ropeways, railways, trams, trolleybuses, airports, industrial structures and infrastructure complexes, there will be a 40% discount on the income tax rate.
(c) Manufacturing industries other than fruit-based brandy, cider and wine manufacturing industries established in very underdeveloped, underdeveloped and underdeveloped areas mentioned in Schedule-10 for ten years from the date of commencement of commercial production or business shall be subject to income tax rates of ninety, eighty and eighty respectively. You will get seventy percent discount. But fruit-based brandy, cider and wine production industries established in highly underdeveloped areas will get forty percent income tax exemption for ten years from the date of commencement of business.
(d) Manufacturing industries that are established with a capital investment of more than one billion and provide direct employment to more than five hundred throughout the year will be fully exempted from income tax for five years from the date of commencement of business and fifty percent of the tax incurred for the next three years will be exempted from income tax. However, if such industries that are currently operating increase their capacity by at least twenty-five percent and raise their capital to one billion and provide direct employment to more than five hundred people throughout the year, the income received from such capacity increase will be fully exempted from income tax for five years, and fifty percent of the tax levied for the next three years will be exempted from income tax.
(e) The person or entity that has received the permission to start commercial production, transmission or distribution of hydroelectric power up to the year 2080 Chaitra will get a full income tax exemption for the first ten years and a fifty percent income tax exemption for the next five years. Electricity produced from solar, wind and biological materials will also get such a facility. But start commercial production at the commencement of this ActIn the case of a person who has received a license that has expired, the provisions of the time when the license was obtained will be applied.
(f) A person engaged in petroleum, natural gas and fuel exploration and mining business, if he conducts business until the month of Chaitra, 2075, he will get a full income tax exemption for the first seven years from the date of operation of the business and fifty percent income tax exemption for the next three years.
(G) Industries related to the tourism sector established with a capital investment of more than two billion, and industries related to the tourism sector such as hotels and resorts with infrastructural facilities established in areas other than metropolitan cities and sub-metropolitan cities with a capital investment of more than five million, will be fully exempted from income tax for five years from the date of commencement of business. There will be a fifty percent discount on the income tax rate for the year. However, if such industries that are currently operating increase their capacity by at least twenty-five percent of the current connected capacity and reach two billion capital, the income obtained from such capacity increase will be completely exempted from income tax for five years and fifty percent exemption from the income tax rate for the next three years.
(h) Government of Nepal will get a fifty percent discount on the income of the software development, data processing, cyber cafe, digital mapping industries established within the designated technology parks, biotech parks and information technology parks by publishing a notice in the Nepal Gazette.
(i) The following industries employing the following number of Nepali citizens will be provided with the following discount facilities:-
(1) Fifteen percent of the tax levied on the income of the manufacturing industry, information and communication technology industry that provides direct employment to three hundred or more Nepali citizens throughout the year,
(2) Twenty-five percent of the tax levied on the income of that year for manufacturing industries and information and communication technology industries that provide direct employment to twelve hundred or more Nepali citizens throughout the year,
(3) At least fifty percent of the Nepali citizens employed under subsection (1) or (2) are women, Dalits or disabled.If there are persons with a disability, an additional fifteen percent in the tax levied on the income of such industry for that year.
(j) If the goods produced by the manufacturing industry are exported, there will be a twenty-five percent discount on the tax rate on the income received.
(k) The industry will be allowed to deduct for income tax purposes the expenses incurred for the long-term welfare or welfare of its workers and employees, such as housing arrangements, life insurance, health facilities, education and training, child care centers and sports and exercise for physical fitness.
(l) In the same year, up to fifty percent of the adjusted taxable income of the business will be allowed to be deducted from the expenses incurred on methods and equipment that have minimal impact on the environment including pollution prevention and control or reprocessing or reuse of wasted items. Expenditure exceeding the adjusted taxable income limit of the business can be capitalized and deducted at the beginning of the next income year.
(D) All the expenses invested in devices or equipment that help reduce energy consumption by increasing energy efficiency will be allowed to be deducted for income tax purposes.
(d) To increase the productivity of the industry, he can deduct up to fifty percent of the adjusted taxable income of all the businesses run by that person from the expenses incurred for the enhancement of entrepreneurship, research and development and creation of new technology. Expenditure exceeding the limit of adjusted taxable income can be capitalized at the beginning of the next income year and deducted.
(n) The industry may deduct the expenses incurred for market promotion, survey and advertisement related to the business for the purpose of income tax.
(p) The industry may deduct for the purpose of income tax the expenses for the protection of the physical property of the industry and the premium paid for its insurance. (h) The industry will be allowed to deduct the expenses incurred in protecting the industrial property under the registered intellectual property in Nepal for income tax purposes.
(d) Revenue derived from export of intellectual property created and registered in Nepal by an industryTwenty-five percent discount will be given on the rate of income tax on the lotty income.
(D) An industry will get a fifty percent discount on the income tax rate on the income received from the transfer or sale of the intellectual property created by it.
(N) An industry may pay the fee incurred during registration abroad for the protection of intellectual property acquired by it as prescribed by the Government of Nepal.
(c) An industry will be allowed to deduct one lakh rupees from the amount donated or gifted to an exempt organization or five percent of the adjusted taxable income of that industry for the income tax purpose.
(f) In a particular case, the Government of Nepal may, by publishing a notice in the Nepal Gazette, determine that the amount spent or donated by any industry for the purpose of income determination may be fully or partially deducted.
(2) Notwithstanding anything written in sub-section (1), the tobacco industry, liquor industry and katha or kutch industry shall not get any of the mentioned exemptions and facilities. However, according to the prevailing law, the expenses incurred by such industries for the long-term benefit or welfare of their workers and employees, prevention and control of pollution, reprocessing of wasted items, expenses on methods and equipment that have minimal impact on the environment, and help to reduce energy consumption by increasing energy efficiency. Actual expenses incurred for business promotion including expenses invested in mechanical equipment, research and development expenses will be allowed to be deducted.
(3) In relation to the same income, the industry that can get more than one exemption according to this section will get only one exemption of its choice.