Core rule: Schedule 1 allows a resident natural person deductions for qualifying investment/life insurance, health insurance and insurance of the person's own private building. For FY 2083/84, the respective annual ceilings are NPR 40,000, NPR 20,000 and NPR 10,000. Each deduction is limited to the eligible premium actually paid.
Example: qualifying annual premiums are NPR 45,000 for life insurance, NPR 12,000 for health cover and NPR 8,000 for the taxpayer's own building. The deductions are NPR 40,000, NPR 12,000 and NPR 8,000: NPR 60,000 in total, not NPR 65,000.
Check the statutory policy category and resident-insurer requirements for health and building cover. Keep premium receipts and policy details. The private-building ceiling increased from NPR 5,000 to NPR 10,000 under Finance Act 2083.