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If you earn, run a business, or move money in Nepal, your tax bill just changed. The Finance Minister's budget speech of 29 May 2026 (Jestha 15, 2083 BS) rewrote the personal income tax structure — raising the tax-free threshold to NPR 10 lakh and cutting the top rate from 39% to 29%. We've broken down every rate that applies to FY 2083/84, with side-by-side comparison to FY 2082/83 so you know exactly what shifts on Shrawan 1, 2083.
Tax rate in Nepal for FY 2083/84 (mid-July 2026 to mid-July 2027) follows new unified slabs: 1% up to NPR 10 lakh, 10% on the next 5 lakh, 20% on the next 10 lakh, 27% on the next 15 lakh, and 29% above 40 lakh. Corporate tax stays at 25% (general) or 30% (banks, insurance, tobacco). VAT remains 13%, with a new 10% discount for digital payments.
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What Changed in FY 2083/84 — Five Headline Reforms
The 2083/84 budget delivered the biggest personal income tax overhaul in years. Most workers in Kathmandu and the Bagmati Province pay less under the new structure, especially salary earners between NPR 5 lakh and NPR 25 lakh. Here are the five changes that matter to most readers.
- Tax-free threshold raised — from NPR 5 lakh (single) / 6 lakh (married) up to NPR 10 lakh for everyone.
- Single and married slabs unified — the separate joint-filer schedule is gone. One table for all individuals.
- Top rate cut — from 39% on income above 50 lakh down to 29% on income above 40 lakh.
- Real estate capital gains tiered — short, medium, and long-hold rates of 5%, 7.5%, and 10% replace the older flat structure.
- Digital-payment VAT discount — a 10% billing discount on VAT for purchases made through electronic payment channels.
Personal Income Tax Slabs — FY 2083/84 vs FY 2082/83
Nepal's individual income tax follows progressive slabs. The first tier is technically a 1% Social Security Tax (SST), which is waived if you contribute to the Social Security Fund (SSF). All figures below are in Nepali Rupees (NPR).
FY 2083/84 Slabs (Effective Shrawan 1, 2083 BS — Mid-July 2026)
| Annual Taxable Income (NPR) | Tax Rate |
|---|---|
| Up to 1,000,000 (10 lakh) | 1% (SST — waived for SSF contributors) |
| 1,000,001 – 1,500,000 (next 5 lakh) | 10% |
| 1,500,001 – 2,500,000 (next 10 lakh) | 20% |
| 2,500,001 – 4,000,000 (next 15 lakh) | 27% |
| Above 4,000,000 (above 40 lakh) | 29% |
Single filers and married couples use the same table. The earlier higher threshold for joint filers has been removed.
FY 2082/83 Slabs (Still Applicable Until Mid-July 2026)
| Income (NPR) | Single Rate | Married Rate |
|---|---|---|
| Up to 500,000 / 600,000 | 1% SST | 1% SST |
| Next 200,000 | 10% | 10% |
| Next 300,000 | 20% | 20% |
| Next slab to 2,000,000 | 30% | 30% |
| 2,000,001 – 5,000,000 | 36% | 36% |
| Above 5,000,000 | 39% | 39% |
Women's rebate: Under FY 2082/83 rules, a woman filing individually under her own PAN receives a 10% rebate on the computed tax. The 2083/84 budget did not explicitly extend this rebate — check the Finance Act 2083 gazette before filing.
Worked Example — How Much Less Do You Pay in 2083/84?
Consider a salaried professional in Kathmandu earning NPR 15 lakh per year, contributing to SSF (so the 1% SST is waived).
| Year | Tax Calculation | Total Tax (NPR) |
|---|---|---|
| FY 2082/83 (single) | 0% on 5L + 10% on 2L + 20% on 3L + 30% on 5L | 2,30,000 |
| FY 2083/84 | 0% on 10L + 10% on 5L | 50,000 |
That's a saving of NPR 1,80,000 — nearly 78% lower — on the same income. Higher earners save proportionally less but still benefit from the top-rate cut from 39% to 29%.
In our experience helping clients prepare notarized salary certificates and income proofs for embassies and banks, most professionals don't realise how dramatically their post-tax take-home has shifted. If you're submitting income documents abroad, request a fresh certificate after Shrawan 1, 2083.
Corporate and Business Tax Rates
The 2083/84 budget left corporate rates largely unchanged. Nepal's standard corporate income tax structure continues to be tiered by sector.
| Entity / Sector | Tax Rate |
|---|---|
| General companies | 25% |
| Banks and financial institutions | 30% |
| Insurance companies | 30% |
| Telecom and internet service providers | 30% |
| Cigarettes, tobacco, alcohol, beer | 30% |
| Petroleum business | 30% |
| Special industries (manufacturing) | 20% |
| IT and export-oriented businesses | ~20% effective (with 75% export rebate on IT) |
| Rural agricultural cooperatives | 0% (exempt) |
| Urban cooperatives | 5% – 10% (tiered by municipality class) |
For business registration, branch licensing, or foreign investor compliance, supporting documents — such as board resolutions, MoA/AoA, and shareholder declarations — must be notarized before submission to the Office of Company Registrar or the Department of Industry. Certified notarization in Nepal typically completes within the same business day for routine corporate filings.
Capital Gains Tax — Shares, Property, and Long-Term Assets
Listed Securities (NEPSE)
| Investor Type | Holding Period | Rate (FY 2082/83) |
|---|---|---|
| Individual | More than 365 days | 5% |
| Individual | 365 days or less | 7.5% |
| Institution / entity | Any | 10% |
FY 2083/84 change: Capital gains tax on listed securities is now treated as a final tax. You no longer reconcile it on the annual income return, which simplifies filing for retail investors.
Unlisted Shares
- Individuals: 10%
- Entities: 15%
Land and Buildings — Individuals
| Holding Period | Rate (FY 2082/83) | Rate (FY 2083/84 — tiered) |
|---|---|---|
| More than 5 years | 5% | 5% |
| 3 to 5 years | 7.5% | 7.5% |
| Less than 3 years | 7.5% | 10% |
| Personal residence occupied >10 years | Exempt | Exempt |
Property transfer requires a notarized deed of transfer, citizenship copies of both parties, and a land valuation certificate from the Malpot office in Kathmandu District.
VAT in Nepal — Rate, Registration, and 2083/84 Changes
Value Added Tax (VAT) in Nepal is a flat 13% on most taxable supplies. This rate did not change in the 2083/84 budget, but several new rules apply.
- 10% VAT discount at billing — for purchases settled via digital payment channels (mobile wallets, IPS, QR, card).
- 5% VAT on electricity consumption above 50 units per month.
- 5% VAT on ride-hailing platform services.
- Automated VAT refund process — the IRD has streamlined export VAT refunds through the taxpayer portal.
Registration threshold (per the Finance Act 2081, still in force): NPR 50 lakh annual turnover for goods, NPR 30 lakh for services. Confirm against the gazetted Finance Act 2083 once published.
TDS — What Gets Withheld at Source
Tax Deducted at Source (TDS) is collected by the payer on certain categories of payment, then deposited with the IRD on your behalf. The rates below reflect FY 2082/83 and continue into FY 2083/84.
| Payment Type | TDS Rate |
|---|---|
| Salary | As per personal slab |
| Rent paid to a natural person | 10% |
| Consultancy/service fee — PAN-only recipient | 15% |
| Consultancy/contractor — VAT-registered recipient | 1.5% |
| Bank interest (resident individual) | 5% |
| Dividend (resident or non-resident) | 5% (final) |
| Commission to insurance agent | 15% |
| Royalty | 15% |
| Lottery / windfall gain | 25% |
| Repatriated profit (foreign parent) | 5% |
TDS becomes applicable once cumulative payments to one party exceed NPR 50,000 in a fiscal year. From FY 2083/84, all deductors must file eTDS through the IRD Taxpayer Portal.
Taxes for Freelancers, Consultants, and Small Businesses
Self-employed professionals in Kathmandu — translators, photographers, IT consultants, designers — face a choice between two registration modes.
- PAN-only: The client withholds 15% TDS on your gross fee. You file an annual return and reconcile against the personal income tax slabs.
- VAT-registered: You charge 13% VAT on invoices, file monthly VAT returns, and the client withholds only 1.5% TDS.
For very small operators, two alternative schemes exist.
- Presumptive Tax (D-01) — natural-person businesses with turnover up to NPR 30 lakh and net income up to NPR 3 lakh pay a fixed amount: NPR 7,500 in a metropolitan area, NPR 4,000 in a sub-metropolitan area, NPR 2,500 in a municipality, and NPR 1,500 in a rural municipality.
- Turnover-Based Tax (D-02) — natural persons with turnover between NPR 30 lakh and 1 crore pay 0.25% to 2% of turnover depending on the activity (trading, services, manufacturing).
Choose the structure that fits your turnover and document-handling capacity. Many freelancers serving foreign clients also need authorized document translation in Nepal for invoices, NOCs, and remittance declarations.
Document Authentication for Tax Filings and Cross-Border Income
Whether you're filing for a foreign tax credit, claiming exempt status as an NRN, or preparing audited statements for a foreign investor, certain documents must be notarized — and often translated and attested by the Ministry of Foreign Affairs (MOFA) in Kathmandu.
Common tax-related documents that require notarization in Kathmandu: salary certificates for embassy visa filings, business income statements for foreign loan applications, NRN income declarations, attested copies of citizenship and PAN, and translated audit reports for cross-border investors.
Notarized translations of tax certificates are accepted by Australian, UAE, US, and UK consulates for visa, residency, and bank account applications. Build a buffer of two extra business days into your timeline when the document chain involves MOFA attestation.
Filing Deadlines, PAN, and Common Penalties
- Income tax return filing: By Poush end (mid-January) for the prior fiscal year.
- VAT return: Monthly, within 25 days of the month-end.
- TDS deposit: Within 25 days of the deducting month.
- Late filing penalty: 1.5% interest per month on outstanding tax plus a fixed late-filing fee.
- Non-PAN penalty: Transactions above NPR 50,000 to a non-PAN payee require the payer to withhold tax at the higher rate plus a 5% surcharge.
The 2083/84 budget introduced an expedited dispute settlement mechanism — taxpayers facing ongoing assessment disputes can pay 1% additional tax to waive all penalties and interest. This is a one-time window; check the IRD circular for the application deadline.
Conclusion — Start the New Fiscal Year With Clean Records
FY 2083/84 is the friendliest personal income tax year Nepal has seen in over a decade. The tax-free threshold doubled, the slab structure simplified, and the top rate dropped 10 percentage points. For most salary earners in Kathmandu, the immediate effect is a noticeably larger take-home from Shrawan 1, 2083 onward.
If your tax filings cross borders — for visa applications, foreign investments, or NRN compliance — get your salary certificates, business statements, and translation copies notarized before you submit them. Notary services in Kathmandu through our team are typically completed the same business day, with MOFA attestation arranged when required.
Start your tax filing season with documents that won't be rejected — contact our team now.
Get your documents notarized in Kathmandu →
Reviewed by: The Legal Team at Notary Kathmandu — Nepal Bar Council registered advocates
Last reviewed: June 2026
Tax rates above are based on the FY 2083/84 budget speech of 29 May 2026 and become binding only once the Finance Act 2083 is gazetted. For binding advice, consult a registered Chartered Accountant.
This article is for informational purposes only and does not constitute legal advice, advertisement, or solicitation. Notary Kathmandu and its team are not liable for any consequences arising from reliance on this information. For legal advice, please contact us directly.
Frequently Asked Questions
The personal income tax slab in Nepal for FY 2083/84 is unified for all individuals:
- 1% on income up to NPR 10 lakh (waived for SSF contributors)
- 10% on NPR 10–15 lakh
- 20% on NPR 15–25 lakh
- 27% on NPR 25–40 lakh
- 29% on income above NPR 40 lakh
Single and married filers use the same table.
On a NPR 15 lakh annual salary under FY 2083/84 rules (assuming SSF contribution, so 1% SST is waived):
- NPR 0 on the first NPR 10 lakh
- NPR 50,000 on the next NPR 5 lakh at 10%
Total tax is NPR 50,000. The same salary attracted approximately NPR 2,30,000 in tax under FY 2082/83 single-filer rules.
Yes, two changes:
- Capital gains tax on listed securities (NEPSE shares) is now treated as a final tax — no further reconciliation on the annual return.
- Property capital gains is tiered: 5% if held more than 5 years, 7.5% for 3–5 years, and 10% for under 3 years.
Personal residence occupied for more than 10 years remains exempt.
Freelancers in Nepal must register for VAT only if their annual turnover exceeds NPR 30 lakh in services or NPR 50 lakh in goods. Below that, two options apply:
- Operate under PAN-only — client withholds 15% TDS
- Opt for presumptive tax (D-01) if turnover is under NPR 30 lakh and net income under NPR 3 lakh
Common tax-related documents that require notarization in Kathmandu include:
- Salary certificates for embassy and visa filings
- Business income statements for foreign loan applications
- NRN income declarations
- Attested copies of citizenship and PAN
- Translated audit reports for cross-border investors
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