Nepal Income Tax Rates for FY 2083/84 (2026/27)
A guide to Nepal's personal income tax slabs, resident and non-resident taxation, deductions, and the historical income tax rates for FY 2074/75 (2017/18), FY 2073/74 and FY 2072/73.
Income tax slabs in Nepal for FY 2083/84
For the 2083/84 income year, Schedule 1 of the Income Tax Act, 2058, as amended by the Finance Act, 2083, provides a unified progressive schedule for resident natural persons. The rates are marginal: only the portion of taxable income falling within each band is taxed at that band's rate.
| Annual taxable income (NPR) | Marginal rate |
|---|---|
| Up to 1,000,000 | 1% (subject to exemptions) |
| 1,000,001 to 1,500,000 | 10% |
| 1,500,001 to 2,500,000 | 20% |
| 2,500,001 to 4,000,000 | 27% |
| Above 4,000,000 | 29% |
The 1% first-band charge is a social security tax, subject to statutory exemptions including qualifying Social Security Fund contributions and certain pension or sole-proprietorship cases. Do not automatically apply it to every category of income.
Illustration: For NPR 1,800,000 of taxable employment income with the 1% first-band charge applicable, the indicative tax is NPR 10,000 + NPR 50,000 + NPR 60,000 = NPR 120,000, before any applicable credits, withholding or special adjustments.
Legal framework and key definitions
Income Tax Act, 2058 (2002): Nepal's principal income tax legislation, covering taxable income, residency, employment, business, investment, withholding and assessments. The applicable annual Finance Act can amend rates and exemptions. Schedule 1 contains tax-rate rules; Section 50 addresses assessment of couples, where relevant under the applicable year's law.
Resident person: Residency is determined under the statutory residence tests, including habitual abode and relevant physical-presence criteria, rather than nationality alone. Non-resident person: A person not qualifying as resident; taxation generally focuses on Nepal-source income, with specific rules for permanent establishments and final withholding.
Taxable income: Assessable income after deductions and adjustments permitted by the Act. Marginal tax rate: The rate on the next unit of taxable income, not the rate applied to the entire annual income.
Income tax deductions and reliefs
Taxpayers may qualify for deductions or concessions subject to statutory conditions and the annual Finance Act. Common categories include:
- Approved retirement fund contributions: Subject to statutory percentage and monetary limits and eligibility requirements.
- Life and health insurance: Premium deductions may be available within applicable ceilings.
- Remote-area employment: Allowances or deductions can depend on the government's classification of the work location.
- Disability, pension and qualifying employment reliefs: Specific concessions may apply where the legal criteria are satisfied.
- Social Security Fund participation: Can affect the 1% first-band charge and other contribution deductions.
Historic relief amounts should not be carried forward automatically; check the current Finance Act and Inland Revenue Department (IRD) guidance before filing.
Income tax for non-resident persons in Nepal
Non-residents generally face tax on Nepal-source income under the Income Tax Act, subject to income classification, withholding rules and any applicable double taxation agreement. A 25% general rate has commonly applied to ordinary taxable income of non-resident persons, but it is not a universal flat rate for all non-resident receipts. Special categories such as transport, communications, dividends, interest, services, and permanent-establishment repatriations may have distinct statutory rates.
Determine whether the receipt is subject to final withholding, ordinary assessment or a treaty-reduced rate. A non-resident operating through a Nepal permanent establishment may also face separate rules on branch profits and repatriation.
Previous year: Nepal tax slabs FY 2082/83 (2025/26)
In FY 2082/83, resident individuals and qualifying jointly assessed couples had different lower-band thresholds. These rates are provided for previous-year tax returns and comparisons, not for FY 2083/84 income.
| Individual (NPR) | Couple (NPR) | Rate |
|---|---|---|
| Up to 500,000 | Up to 600,000 | 1%* |
| 500,001 to 700,000 | 600,001 to 800,000 | 10% |
| 700,001 to 1,000,000 | 800,001 to 1,100,000 | 20% |
| 1,000,001 to 2,000,000 | 1,100,001 to 2,000,000 | 30% |
| 2,000,001 to 5,000,000 | 2,000,001 to 5,000,000 | 36% |
| Above 5,000,000 | Above 5,000,000 | 39% |
*The 1% social security charge was subject to statutory exceptions. The 36% and 39% bands reflected applicable additional tax on higher income.
Historical Nepal income tax rates: FY 2074/75, 2073/74 and 2072/73
The following tables preserve the principal resident-person rate information from this page's original historical guide. They should not be used for current payroll or income tax returns.
FY 2074/75: resident individual
| Annual income (NPR) | Historical rate |
|---|---|
| Up to 350,000 | 1% |
| 350,001 to 450,000 | 15% |
| Above 450,000 | 25% |
FY 2074/75: resident couple
| Annual income (NPR) | Historical rate |
|---|---|
| Up to 400,000 | 1% |
| 400,001 to 500,000 | 15% |
| Above 500,000 | 25% |
FY 2073/74: resident individual
| Annual income (NPR) | Historical rate |
|---|---|
| Up to 350,000 | 1% |
| 350,001 to 450,000 | 15% |
| Above 450,000 | 25% |
FY 2073/74: resident couple
| Annual income (NPR) | Historical rate |
|---|---|
| Up to 400,000 | 1% |
| 400,001 to 500,000 | 15% |
| Above 500,000 | 25% |
FY 2072/73: resident individual
| Annual income (NPR) | Historical rate |
|---|---|
| Up to 250,000 | 1% |
| 250,001 to 350,000 | 15% |
| Above 350,000 | 25% |
FY 2072/73: resident couple
| Annual income (NPR) | Historical rate |
|---|---|
| Up to 300,000 | 1% |
| 300,001 to 400,000 | 15% |
| Above 400,000 | 25% |
Historical non-resident tax categories
| Type of income | FY 2072/73 to 2074/75 reference |
|---|---|
| Ordinary taxable income | 25% (historical general rate) |
| Specified shipping, aviation, telecommunications and related transactions | 5% (historical rate shown in original article) |
| Foreign permanent establishment repatriation | 4% (historical rate shown in original article) |
Historical concessions described in the original article included remote-area relief, pension and disability deductions, insurance premium deductions, foreign allowances, relief for qualifying female employees, and industry-related incentives. Eligibility and amounts depended on the law for the particular income year. They are not represented here as current deductions.
Official Nepal tax law and filing resources
- Inland Revenue Department of Nepal - tax notices, return services and current guidance.
- Income Tax Act, 2058 - IRD legislative archive - legislation and amended versions.
- Ministry of Finance, Nepal - budget and Finance Act publications.
- Nepal Law Commission - legislation and official legal materials.
Tax rates and exemptions can change with the annual Finance Act. Confirm the applicable income year, source of income, residency, withholding obligations and latest official IRD notices before taking a tax position.