Section 16 : Repair and maintenance expenses

1) When computing the income of any business or investment in any income year, a person may deduct all expenses incurred in the repair and maintenance of the depreciable property owned and used in that year to earn income from that business or investment.

2) Notwithstanding anything contained in Sub-section (1), in deducting the expenses allowable under that sub-section, it shall not exceed seven percent of the depreciation base amount of the group of property remaining at the end of that income year.

Provided that no such limit shall be applicable to repair and maintenance expenses incurred in the testing of an aeroplane pursuant to the standards determined by the Civil Aviation Authority of Nepal by the person providing air transport service.

3) Any excess expense or part thereof on repair and maintenance which is not deductible because of the limit referred to in sub-section (2) may be added to the depreciation base amount of the group of the concerned property in the beginning of upcoming income year.