Deduction for Natural Person

1. Retirement Contribution to an Approved Retirement Fund

In case natural person makes contribution to an approved retirement fund,
the following amounts whichever is lower is allowed for deduction
Actual contribution to retirement fund,
One third of assessable income,
Up to Rs. 300,000
If natural person makes contribution in Social Security Fund
established as per Social Securities Act 2074, the facilities of
maximum limit will be Rs. 500,000 instead of Rs. 300,000.

2. Donation
Donation given to a tax-exempt organization (TEO) the following
amounts whichever is lower is allowed for deduction:
5% of adjusted taxable income (after deducting contribution to approved
retirement fund)
Or Actual donation
Or Maximum Rs. 100,000

3. Contribution to Prime Minister Relief Fund or National

Reconstruction Fund
In case a person makes any contribution during an income year in Prime
Minister Relief Fund or National Reconstruction Fund, the actual
contributed amount can be deducted while calculating taxable income.

4. Contribution to Corona Relief Fund established by Nepal

Government
The amount contributed by a person to the Corona Infection Prevention
Control and Treatment Fund established by Nepal Government and State
Government shall be allowed as deductible expenses while calculating
Income Tax.
Deduction facilities to Entity
1. Donation
a. Donation to tax exempt organization
 Donation given to a tax-exempt organization (TEO) the following
amounts whichever is lower is allowed for deduction:
5% of Assessable Income
Or Actual donation
Or Maximum Rs. 100,000

b. Donation given by company for protection and promotion

Donation given by a company for the work of protection and
promotion ancient, cultural and religious heritage, and building public
physical infrastructure for the development and promotion of sports
activities in Nepal on pre-approval of IRD is allowed as:
10% of assessable income
Or, actual donation
Or, Maximum Rs. 10,00,000
whichever is lower from above three

c. Donation to prime minister relief fund and National

reconstruction fund
In case a person contributes during an income year in Prime Minister
Relief Fund or National Reconstruction Fund, the actual contributed
amount can be deducted while calculating taxable income.

d. Contribution to Corona Relief Fund established by Nepal

Government
The amount contributed by a person to the Corona Infection Prevention
Control and Treatment Fund established by Nepal Government and State
Government shall be allowed as deductible expenses while calculating
Income Tax.

Approved Retirement Fund provision in Income Tax

Citizen Investment Trust established under Citizen Investment Trust Act 2047,
Employee Provident Fund established under Provident Fund Act 2019, Social
Security Fund established under Social Security Fund Act 2074, Retirement
fund maintained by Pension Fund established under Pension Fund Act 2019 and
IRD approved retirement fund are the approved retirement fund.
Example: Nabil retirement fund, Siddhartha Retirement fund, NCC Retirement
fund etc.