️How can individuals with only employment income obtain tax clearance?

If a person has only employment income from a Nepal-based source in a given year, has had only one employer at a time, all employers are resident individuals, and they are not claiming deductions other than employer-paid retirement contributions or medical expense tax credits, they do not need to file an income statement.

Individuals who do not meet all of the above conditions must file an income statement.

If a person has income from both employment and business, they must declare both sources of income in their income statement.

Individuals with employment income who are not required to file an income statement must obtain a letter from their employer stating their annual income, tax calculation, and TDS deductions and submit it to the tax office.

Along with this letter, they must submit an application for tax clearance, including an income and tax calculation statement in the prescribed format provided by the tax office.

If the individual cannot personally visit the tax office to collect the tax clearance certificate, they must provide an authorization letter along with the application, allowing someone else to collect it on their behalf.

The application must include proof of TDS deductions, contributions to insurance and retirement funds, and other deductible expenses.

If the submitted calculations are error-free and there are no outstanding tax dues, the tax officer will issue the tax clearance certificate.

If an individual has employment income along with taxable non-business assets (such as income from the sale of land, buildings, or shares), they must file an income statement. (This does not increase their tax liability.)

Regardless of the above conditions, individuals earning an annual salary of more than NPR 4 million must fill out the D04 form and submit an income statement.