Nepal income tax rates
Statutory marginal rate schedule applied to the taxable income of a resident natural person OR of a couple electing under section 50 of the Act, Schedule 1, section 1(1) of the Income Tax Act, 2058 as substituted by section 57(26) of the Finance Act, 2083. Amounts are per income year (1 Shrawan to end of Ashadh, mid-July to mid-July) and apply to taxable income.
What this value means
BS YEAR: income year 2083/84 BS, which began on 2083 Shrawan 1 = 17 July 2026 and ends at Ashadh end 2084 = 16 July 2027. Nepal's tax year is not a Gregorian year and not a quarter-aligned year — every threshold here is annual to mid-July. THE BRIEF THAT LAUNCHED THIS FILE WAS WRONG ON THE SCHEDULE AND ON THE COUPLE RULE; THE ACT WINS. It described 'progressive bands from a 1% social security tax up to 36%' and separate INDIVIDUAL and COUPLE schedules. Both statements describe the SUPERSEDED schedule. As from 17 July 2026: (a) the top marginal rate is 29 percent, not 36 or 39 — the Finance Act, 2083 cut it by ten points; and (b) THE SEPARATE COUPLE SCHEDULE HAS BEEN ABOLISHED. Section 57(26)(ख) states flatly 'उपदफा (2) झिकिएको छ' — sub-section (2), which carried the couple bands, is DELETED, and the section heading is rewritten to cover 'a natural person or a couple', so a couple electing under section 50 now uses exactly the bands above. Any calculator still applying Rs 600,000 / 800,000 / 1,100,000 couple thresholds is running the pre-2083 law. THE FIRST BAND IS NOT A TAX-FREE ALLOWANCE AND NOT A GENERAL 1%. Clause (क) charges 1 percent only where the taxable income is EMPLOYMENT taxable income ('रोजगारीको करयोग्य आय') up to Rs 1,000,000 — this is Nepal's social security tax, collected separately. Its proviso disapplies it entirely for taxpayers registered as sole proprietorship firms, for pension (निवृत्तभरण) income, for retirement fund income, and for natural persons contributing to the contribution-based Social Security Fund. So for a self-employed person, a pensioner or an SSF contributor the first Rs 1,000,000 bears NO tax; for an ordinary employee it bears Rs 10,000. Applying a flat 1% to business income overtaxes; applying 0% to salary undertaxes. HOW THE TOP RATE IS DRAFTED: clause (ङ) is not a fifth band in the ordinary sense — it adds 'two percentage points' to the clause (घ) rate on the slice above Rs 4,000,000, giving 29 percent. This is a change of MECHANISM as well as level: the old clause (ङ) added a proportional surcharge ('थप बीस प्रतिशत' and 'थप तीस प्रतिशत' of the rate), which is why the old top rates were 36 percent (30 x 1.2) and 39 percent (30 x 1.3) rather than 50 and 60. Sources that describe Nepal's top rate as '36%' are quoting the 2m-5m surcharge band of the old schedule and sources that say '39%' are quoting its above-5m band. RELIEFS RESTATED IN THE SAME AMENDMENT, all keyed to the new Rs 1,000,000 clause-(क) amount: pension income gets 25 percent of that amount (Rs 250,000) deducted from taxable income (sub-section 9क); a natural person with a disability gets an additional 50 percent (Rs 500,000) deducted (sub-section 10); a new sub-section (16ख) allows a deduction of the lower of 25 percent of annual tuition fees paid for a child's education or Rs 25,000; and sub-section (16क) raises the existing deduction from Rs 5,000 to Rs 10,000. Remote-area allowance (up to Rs 50,000) and 75 percent of the foreign allowance of diplomatic staff remain deductible under sub-sections (5) and (6). CAPITAL GAINS FOR INDIVIDUALS ROSE AT THE SAME TIME and are NOT modelled in the bands: section 57(26)(घ)(2) raises the rate on gains from disposing of non-business chargeable assets — land and buildings held five years or more from 5 percent to 7.5 percent and held less than five years from 7.5 percent to 10 percent, and NEPSE-listed securities held more than 365 days from 5 percent to 7.5 percent and 365 days or less from 7.5 percent to 10 percent. The income threshold at which the sub-section (4) gains machinery engages was lifted to Rs 1,000,000 for a natural person or couple. Business income of a natural person from a special industry, hotel, resort or IT industry attracts the section 11(2)(क) one-third reduction where the 30 percent rate would otherwise apply. SOURCING AND STATUS: the text served here is the Government of Nepal's published text of the fiscal instrument, titled आर्थिक विधेयक, २०८३ and dated 15 Jestha 2083, at https://giwmscdnone.gov.np/media/pdf_upload/आर्थिक विधेयक, २०८३_lzxbrvm.pdf, mirrored by the Inland Revenue Department at https://ird.gov.np/content/13566/economic-bill--2083/. IRD's own notices already cite 'आर्थिक ऐन, २०८३', so it has been enacted, but the authenticated Act text had not appeared on lawcommission.gov.np at confirmation. The PDF is Unicode Devanagari and extracts as text, though conjunct consonants are mangled by most extraction tools. IRD's own tax-rate summary pages (/category/taxrateincentives/) are stale — the newest individual rate sheet there is for 2080/81.
Earlier values
| From | Value | Source |
|---|---|---|
| 2023-07-17 | structured | आयकर ऐन, २०५८, Schedule 1 section 1(2) (the separate schedul |
| 2023-07-17 | structured | आयकर ऐन, २०५८, Schedule 1 section 1(1) as it stood before th |
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