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Taxation is a powerful tool for mobilizing the internal resources of any country whether it is developing or developed one.In developing countries where financial resource gap is increasing seriously leading the economy to the state of external dependency, taxation only becomes sustainable and non-inflationary internal remedy to overcome this problem of financial resources gap and deficit financing.Because of poor internal resource mobilization capability, Nepal has been facing a serious resources gap for many years and this trend seems to be continued in future if suitable measures are not taken in time properly.For the remedy of external dependency and growing resource gap problem, internal revenue base should be strengthened through the mobilization additional financial resources internally specially through income taxation.This book tries to analyze the concept of income tax,its contribution on Nepalese GDP,total or total tax revenue with international comparison.Similarly,itanalyses the productivity i.e.elasticity and buoyancy of income tax in Nepal. This book may be useful to students, teachers, policy makers and others who are interested in this topic.