What do you mean by “Non chargeable business assets”?

Non-chargeable business assets refer to those assets used in a business that do not qualify for depreciation or amortization under Nepal’s Income Tax Act, 2058 (amended). These assets are either permanent in nature (e.g., land) or exempted by law (e.g., goodwill arising from business revaluation). Unlike chargeable assets (e.g., machinery, vehicles), their value does not diminish over time, so no tax deduction is allowed for their wear and tear. Key examples include:

• Land (Section 20(1)(a) explicitly excludes it).
• Goodwill (unless separately acquired and amortized over 5 years).
• Intangible assets like trademarks or patents (if not capitalized separately).

The Income Tax Regulations, 2082, clarify that such assets must be capitalized in the balance sheet but not depreciated, ensuring no tax benefit is claimed for their use. This distinction is critical for accurate tax computation and compliance.