Updated Income Tax rates in Nepal for 2077/2078 (2020-21) including tax rates and rules for Individual and Couple and businesses. The tax threshold slabs for the Fiscal year 2077/78 is updated as per the Budget speech.

Tax slab for Resident Natural Person (Individual and married couple). To calculate your tax liability add all the personal incomes and check for the slabs to find out rates.

For example if you are unmarried and you earn Nrs 5,50,000 per year, your tax is calculated as:
4,00,000*1%=Rs 4000 Plus
1,00,000*10%= Rs. 10000 Plus
50,000*20%= Rs 10000
Total Tax= 4000+10000+10000= Nrs . 24000

*This is the Social Security Tax to be deposited in a separate revenue account (11211) provided for this purpose. However, tax payer registered as sole proprietorship or on pension income or on income from contribution based pension fund shall not attract social security tax i.e. 1%. And if the taxpayer is depositing amount in the Social Security Fund (SST) then for those taxpayer Social Security Tax is not applicable

Some important notes related to Income Tax rules for resident natural person. Please click the arrow next to the image to view the next image

Income tax applicable for Corporations. To calculate the corporate income tax you need to find out the profit after deducting all the allowable expenses and deductables from the gross profit. Below is the chart of corporate income tax in Nepal for FY 2077/78 (2020-21).

By Finance Act 2019-20, tax rates of special industry, entities involved in the operation business of road, bridge, tunnel, ropeway, railway, or sky bridge; operation of trolleybus and tram; export business, construction of infrastructures and construction, production, and distribution of electricity has been removed from the Schedule -1 of the Income Tax Act, 2058. Normal tax rate applicable to the above entities is 25%. However, these entities can avail various concessions given under Section 11 of the Act.

Please check the comment section for discussions and solutions.

*This information is not updated for FY 2076/77. Please use the facts and figures below for comparisons and referral purpose only.

Notes:

1. Natural person working at remote areas are entitled to get deduction from taxable income to a maximum of Rs. 50000.

2. Natural person with pension income included in the taxable income shall be entitled to deduct from taxable income an additional 25% of the amount prescribed under first tax slab.

3. An incapacitated natural person shall be entitled to get a deduction from taxable income an additional 50% of the amount prescribed under first tax slab.

4. A Resident natural person who has procured life insurance and paid premium amount thereon shall be entitled to a deduction of actual annual insurance premium or Rs. 20000 whichever is less from gross taxable income.

5. A Resident natural person who has procured Health Insurance and paid premium amount thereon shall be entitled to a deduction of actual annual insurance premium or Rs. 20,000 whichever is less from gross taxable income.

6. In case of the employee employed at the foreign diplomatic of Nepal only 25% of the foreign allowances are to be included in the income from salary.

7. In case of the employee posted outside Nepal is getting foreign allowance will get 75% rebate of such allowance.

8. In case of the female employee whose taxable income is only from employment than 10% rebate is allowed on tax liability.

9. In case of individual having income from export, tax rate of 15% is applicable in place of 25%.

10. The limit of 7% of Depreciable Base is not applicable on the repair and improvement expenses incurred for assets located at earthquake affected areas prescribed by GON, in case the person desires to apply this provision. This facility is allowed until FY 2073/74.

11. Productive industries, except tobacco and alcohol industries are eligible to get 50% discount on land registration fee.

12. Special Industries related with manufacturing, tourist services, electricity production and distribution listed on NEPSE and industries mentioned on section 11(3ga) shall be provided with concession of 15% on applicable tax rate. This budget has included Agricultural, Forestry and Mineral Industries also in to the category of Special Industries.

B. Income Tax Rates in Nepal For Non-Resident Person

S. N.Nature of transactionFY 2072/73FY 2073/74
    
1Income earned from normal transactions.25% flat rate25% flat rate
    
a.Income  earned  from  providing  shipping,  air  transport  or5%5%
 telecommunication  services,  postage,  satellite,  optical  fiber  
 project.  
b.Income   earned   providing   shipping,   air   transport   of2%2%
 Telecommunication services through the territory of Nepal.  
    
c.Repatriation by Foreign Permanent Establishment.5%5%
   

A. Income Tax Rates of Nepal For Resident Person

There has been a change in the Income Tax Rates applicable to the Resident Person from the Budget this year.  Details of the same has been provided below.

Income tax rates for F/Y 2076/2077 (Individual)

Income tax rates for F/Y 2076/2077 (Couple)

Income tax rate comparisons for FY 2075/76 and 2076/77

 Particulars FY 2075/76 FY 2076/77 
            
  Rs.  Tax RateRs.    Tax Rate 
  Assessed as Individual       
 First Tax Slab350,000  1%400,000  1% 
 Next 100,000 10%100,000    10% 
 

Next

Next

200,000

13,5000

 

20%

30%

200,000

above 600,000

 

20%

30%

 
 Balance Exceeding20,00,000  36%20,00,000    36% 
  Assessed as Couple       
       
 First Tax Slab400,000  1%450,000  1% 
 Next100,000  10%100,000  10% 
 Next

200,000

13,00,000

  

20%

30%

200,000

Above 550,000

  

20%

30%

 
 Balance Exceeding20,00,000  36%20,00,000  36% 
    
    
    
          

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Muna Tiwari

Hy I have my BBS exam of TAX. At exam time do we have imply new tax rate while calculating tax liability?? if we imply old tax rate and calculate tax rate i will get marks or not??

Prem

For new course new tax rate have been used for solving tax numerical , if u are new course use the tax rate as your course prescribed otherwise don’t go against the system the course has prescribed for the student. laslty you can’t get marks too.

I’m a past student of Account in Master level.

Roshan

Hi. I want to know how the 1% SST is calculated , using what formula on excel sheet

Gunraj Giri

Apply the tax rate of fiscal year 2073/74 for currently.

rupesh

muna tiwari, if you are preparing bbs exam you have to follow the rules of syllabus in which year prepared ie. if you taking exam of 2075 you must follow the rules of tax act of fy 2075/76.

S. GAUTAM

WHAT DO WE CALL THE 1% TAX THAT IS COMPULSORILY DEDUCTED OUT OF ANY LEVEL OF INCOME? BESIDES CALLING IT INCOME TAX, I THINK THERE IS SOME OTHER SPECIFIC TERM USED TO DENOTE IT.

santosh

its social security tax

Kaushal agrawal

Its Social Security Tax(SST)

Abiskar Shrestha

it is social security tax.. and it is only applicable to natural persons derriving income from employment to the extent of his employment income….i.e SST for business and investment income is 0

Susan

1% tax is termed as Social Security Tax or SST in short form.

Yk subba tumbapo

Hi ,
i am dk Tumbapo ,
I Have small of Khoisan why much income tax charge in Nepal ,
nothing Devilment Nepal KTM why is very dirty .
but income tax start charge 1% to 35% so why not Devilment Nepal country ,

Raj

Ask Devilmaster – Pradeep Dhungana 980100100

Ashish Shrestha

our so call Ministers want to collect bigger budget to do nothing,
its development not devilment?????

उमाकान्त दाहाल

आयकर कसरी अनलाइन दाखिला गर्ने

YAJUSH RAJ POKHAREL
Jigmy Lama

If the annual salary of a married man is say, NPR. 13,00,000/- and also pays for Insurance NPR. 1,00,000/- per annum, how much tax will he have to pay per month? Is there a calculator available online for this?

Nabaraj

Hello Lama
You can get tax calculator in IRD website.

YAJUSH RAJ POKHAREL

In this case, the first thing we need to assess is if the individual’s spouse is in employment else where, and is also paying income tax from the place of employment then the basic exemption limit would be NRS 350000, if not the basic exemption limit would be NRS 400000. Regarding insurance the amount of deduction is the insurance amount paid or 20000 whichever is less. Accordingly, in the above case income tax liability is calculates as follows.

Annual salary 13,00,000
Less:-Insurance 20000
Taxable Salary 1280000

Case 1
Upto 350000 @1% 3500
Next 100000 @15% 10000
Balance 830000 @25% 207500
TOTAL TAX LIABILITY NRS 221000
Case 2
Upto 400000 @1% 4000
Next 100000 @15% 10000
Balance 780000 @25% 195000
TOTAL TAX LIABILITY 209000

REGARDING INCOME TAX CALCULATOR YOU CAN FIND IT IN INLAND REVENUE DEPARTMENT WEBSITE.

THANK YOU,

Chiranjeevee Pokhrel

Dear YAJUSH RAJ POKHAREL Sir,

Your calculation to 15% on 1,00,000 sounds wrong. It should be Rs.15,000 instead of Rs.10000. Isn’t it?

What about both husband and wife earn Rs.4,00,000 per annum each. In total, is the exemption, Rs.8,00,000 for married?
Is it like:
Upto 400000 @1% 4000 (from husband side)
Upto 400000 @1% 4000 (from wife’s side)
Total=Rs.8,000 per year.
Right?

Or like,
Gross Salary of Husband + Gross Salary of Wife =4,00,000 + 4,00,000 = 8,00,000
Upto 400000 @1% 4000
Next 100000 @15% 15000
Balance 300000 @25% 75000
TOTAL TAX LIABILITY NRS 94000

94,000 or 8,000 ???

Rishi Ram Pathak

Tax Liability =90000
Social Security Tax=4000
Above are difference title as per IT Act, So we should be called as Tax Liability=90000 and Social Security tax =4000

YAJUSH RAJ POKHAREL

Hello Chiranjivee Pokhrel sir , yes my calculation of tax @ 15 % on 100000 is wrong it should be 15000 instead of 10000, pardon me for my typing mistake.

Regarding your other question if both husband and wife are working person then they are assessed as individual and income tax calculation has to be done individually for husband and wife with ceiling limit of 350000 (as per recent tax slab).

Hope this was useful.

Thank you

Biplav

As per sec 1 (2) of schedule 1 the limit of 400000 is based on the couple option taken as under sec 50 and according to income tax act SST of 1% on 400000 is calculated on total income earned by couple so it is best to use sec 1 (1) instate of taking couple option which will reduce your tax and the main theme of tax is minimum tax is tax thus separate calculation of husband and wife by using the limit of 350000 is done treating them as individual.

Bikash Rai

well answered.appreciate

SS Rijal

I think 9,500.00

lalan

Yes, Please contact me.
9849753713

Pinky Dangi

The tax has to be deducted from the basic salary or Gross salary? One married woman’s monthly basic salary is 50,000. Her Dearness allowance is 9500 and communication allowance is 500. Her Monthly Provident Fund is 5000 (10% of basic salary). She is paying 14355 to life insurance. Please tell me how much is her monthly tax calculation that to be deducted from her salary for 7 months until June 2018 (Fiscal year)?

YAJUSH RAJ POKHAREL

Tax on salary income , i.e Tax deducted at source (TDS) on salary is deducted from the gross salary and not basic salary. Following is the calculation of tax liability (assuming the assessee is assessed as individual)

Basic Salary (50000*7)= 350000
Add:- DEARNESS ALLOWANCE (9500*7) 66500
ADD:-COMMUNICATION ALLOWANCE(500*7) 3500
GROSS ANNUAL SALARY 420000

LESS;-DEDUCTIONS
1. PROVIDENT FUND (5000*7) 35000
2. INSURANCE PREMIUM 14355

NET TAXABLE ANNUAL SALARY 370645

TDS@1% ON FIRST 350000 3500
TDS @ 15% ON 20645 3096.75

GROSS TAX LIABILITY 6596.75

FURTHERMORE THERE IS PROVISION OF 10% REBATE TO FEMALE (ONLY IF ASSESSED AS INDIVIDUAL) ASSESSES ON THE GROSS TAX LIABILITY(6596.75), ACCORDINGLY,

GROSS ANNUAL TAX LIABILITY 6596.75
LESS;- REBATE @ 10% 659.675

NET TAX LIABILITY (ROUNDING OFF TO NEAREST RUPEE) 5937
MONTHLY TDS (5937/7) 848

HOPE THIS IS USEFUL

THANK YOU

Sunaina

Hello sir, can you please reference the source where is this provision of 10% rebate to fermale and from when it was effective from? is this still relevant?

Tapan Pradhan

Hello,
Is there a different tax payment rule for part time employees or its the same?
Thank you.

rupa

I want to know if employee join a job in the middle of Fiscal year, can we provide fully exemptions for example
staff join on Jan 2017 can we deduct 20000 Insurance premium from his total taxable income, and what would be about exemption of remote allowance

YAJUSH RAJ POKHAREL

it is irrelevant as to when the employee as joined for new employment. full insurance amount 0f 20000 is allowed as deduction . in case of people working in remote areas there is deduction of upto 50000 from taxable income(after all deductions). the act does not specify anything about remote allowance.

Sangam

Hello sir can u please provide me your email address

Biplav

yes u can deduct the full 20000 as insurance premium under zero rated but in case of remote allowances it has a general practice of reducing as per the month basis for eg if worked for 6 month than (remote allowance amt * 6/12)

ramesh Kumar Chhetri

Please make me clear about INCOME taxes, the income taxes will be deducted from total basic salary or, from gross amount ? like considering below.
food allowance = ?
Remote Allowance = ?
Accommodation allowance = ?
others allowance = ??????

YAJUSH RAJ POKHAREL

AS PER NEPAL INCOME TAX ACT 2058, TDS ON SALARY INCOME IS ALWAYS CALCULATE ON GROSS SALARY AND NOT BASIC SALARY.

aayush

is there ceiling for insurance premium up to 20000? If premium is more than 20000? do we need to pay tax ?

Biplav

As per fiscal year 2075/76 its limit is 25000 and if it exceed the amount remaining amount is liable for tax

Naresh Bdr Rana Bhat

is there any tax rebate for donations paid to temple trust? please help my number is 9864475762 call me and let me know

Sunil Rai

After staff service retirement services money in nepali upadan rakam amount also we should paid tax to government of nepal.

Sita

can female employee enjoy tax rebate on social security tax as well??

Pushkar

No

Himanshu

Hi I want to understand the calculation of Income tax in case an employee leaves the organization after 4 months 15 days of working.

Anita

Can we deduct donation for non resident person while calculating taxable income?

purushottam thapa

HI, Can anyone plz tell me the set off of carry forward and cary backward of losses?

Madhav

if someone do accounting in any office for specific period like 2 month that while what is tds rate ? can we show as salary and pay tds@1% as SST or not ? what is the tds rate ?

Biplav

As per sec 87 the total salary that is received in the year is to b calculated and tax is liable on that amount for eg if u work 5 months in one company and 4 month in next and u did not work for 3 months than the total salary is taken on account and what ever is already paid as tax on monthly basis is reduced and exceed amount is to b filed

Prakash

WHAT THE #### IS THIS??
NEITHER GOVERNMENT DOES WELL NOR LET THE PUBLIC EARN MORE.
#### YOU NEPAL GOVERNMENT.

Niranjan Adhikari

Yes … I second your thought. This is shit ! Government is literally suckling the blood of citizen. Ir-responsible Fellows !!

sarita

Ahely ko house rent ko tax 5% rate ho??

Sita

Who do you pay the 5% rent tax ?
A home owner or local corruption district office?

How do the Nepali Government keep records of any individuals income? Isn’t only the government employees and big businesses incomes are reported?
How would Nepali government know how much money farmers or small shopkeepers/ businesses make ?

Santosh pandey

What about Donation provision?
In case of individual and entity..

Biplav

As per sec 12 its limit is lower of
100000 or
5% of ATI (adjusted taxable income) or
actual donation paid
this is for both individual and entity

The donation is also given as per sec 12A (sport and heritage protection)
-only for company
-only if donation for infrastructure
-in case of heritage if for repair
condition is lower of following
1000000 or
10% of assessable income
actual amount

and sec 12B (donation to PM relief fund full exemption) for both individual and entity

Subodh Dahal

Is Remittance free from income tax ?

durga raj maharjan

what is details of new INCOME TAX ACCORDING TO 10,20 & 30 % RULE FOR new fiscal year 2075-076?

Gopal

is this tax rate continues in f.y. 75/76 also?

sitaram

Swikrit abakas kosh bata ghatauna paune rakam ko upper limit chai kati hola ni ?

Kumar sanu

Please provide me tax details of Indian employee and employer .

Race Shakya

On what kind of expenses TDS is levied. How to know?

Sanjib Silwal

where can I find this Provision?

Pushkar

How much tax shall be applied in staff bonus?

Binod Yadav

Life Insurance premium upto 25,000 is deductible

Sunaina

Can you please mention where is this clause “8. In case of the female employee whose taxable income is only from employment than 10% rebate is allowed on tax liability.”. How can we get such rebate? Being a female, I am eligible for this criteria. If this is really true.

Sagar Lamsal

By the amendment of income tax mannal 2073, all female deriving income only from employment is eligible of female tax credit @ 10%.
for more, please go though this link :
http://camunchnepal.com/a-dilemma-over-female-tax-credit-and-its-clarification/

Suraj

Please explain about TDS in salary and commission!

Laxman KC

Hi Good Morning,
My comment is related :
4. A Resident natural person who has procured life insurance and paid premium amount thereon shall be entitled to a deduction of actual annual insurance premium or Rs. 20000 whichever is less from gross taxable income.
: In Fiscal Year 2075/76, Deduction of actual annual insurance premium or Rs.25,000.00 whichever is less form gross taxable income.

Guru Shrestha

आन्तरिक राजस्श्व कार्यलयमा कर बुझाउदा तलबमा लाग्ने १ % सामाजिक सुरक्षा कर र अन्य लाग्ने १०%, २०% र ३६% कर सबै एकै शीर्षक जम्मा गर्दा फरक पर्छ कि पर्दैन ?
पर्ने भए कुन कुन रकम कुन कुन शीर्षकमा जम्मा गर्नु पर्ने हो, सुझाब पाउन।

lalit Shrestha

सामाजिक सुरक्चा मा १% -११२११ मा र
र बाकि सबै पारिश्रमिक कर ११११२ मा

lalit Shrestha

What will be the rental Tax for vehicle hire for NGO
(Red plate and Black plate)

Ashish Thapa

remote ares, please define?

shreeram Prasad Dash

what is the revenue title of tds on freight which we shoul be paid to government of nepal.

shreeram Prasad Dash

what is the revenue title of tds on freight which apply by fy 2075-2076

Makar Limbu

How about the pension will that be taxed as well?

reeju

is festival ( dashain) bonus liable for tax?

Sagar Lamsal

yes, it is consider as income from employment under section 8(2) of income tax Act 2058.

ashish shakya

what will be the provision for TDS if an employer is not able to pay its staff salaries for some years (say 3 years) and pays all salaries due at end of fourth year, will TDS be levied on each year salary total or total of four years sum as a whole at the time of receiving the salary.

Sumi

Do Dashain bonus is also calculated in your total annual income and increase your tax slab after receiving Dashain bonus?

Dipanjal

I wanna know this too… What they answer you?

Kamal Khadka

Of course included.

Navinbhatt

What is the tax rate in retirement payment from Government of Nepal?

gagan

10% rebate is only for single woman but not married woman right???

Phurba Sherpa

suppose you are running a hotel business and your sales revenue is +30 lakh. How to figure the tax liability if the EBT is around 10lakh??

Dipanjal

8. In case of the female employee whose taxable income is only from employment than 10% rebate is allowed on tax liability
K Vanna khojeko ho? K yahabaat Sabai Nepali Mahila le 10% discount parcha tax ma???

Kamal Khadka

That mean the female who opt for couple option is not eligible for this rebate.. Others are eligible for this rebate for those whose income is solely based on employment and not any other.

Kamal Khadka

This above provision is further ammended and as per the income tax manual 2073 BS.All the women are eligible for the tax credit of 10% on total tax liability.

Akarshan Pradhan

Namaskar! is it correct to pay 15% from Upadan amount?

Roshan Timilsena

hlw sir i am also bbs third year back student so i forget all terms and condition due to the taxation rules so plzz provide me which have you learn about change in tax rules change ni economic year 2075/2076 plzzz sirr

suman

fixed assets Rs 5K below xa bhane vat bill ma kati % ho and PAN bill ma kati % ?
1.5% on vat 1% on PAN thik ho?

Hira

Pasal ma saman kharid garda kti ammount dekhi vat start hunx hola? 1700/ 1800 ammount ko lagi 13 % vat lagaaunu kattiko jayej ho ?

Pradeep Bhatt

Dear Hira ji
VAT vaneko kati price ma laagne ra kati price ma nalaagne vanne hudain. yo harek goods haru ma impose vaako hunxa… farak yati ho ki tapaai VAT ma register vaako pasal baat saman kinnu hunxa wa VAT ma register navaako pasal baat. VAT vaneko manufacturer baat carry over hudai ultimate consumer ma impose garine tax ho.

Thanks and Regards

Nishi

Suppose my yearly salary is 480000, how much tax i have to pay.

JAY

20 %

Binod Chaudhary

Wages ma kati Tax lagxa si

Safik

Monthly salary 31500
Festival bonus 30000
Leave enhancement 40000
Plz tax calculation for yearly..
How much sst & 10% tax

Prajwol Dangol

Is SST Recoverable?

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