Income Tax Rate Nepal FY 2083/84: New Slabs

📅 Which fiscal year is this? Nepal’s current fiscal year is FY 2083/84, which began on Shrawan 1, 2083 (17 July 2026). Tax rates change with each Finance Act, and a great many Nepali tax pages online still display older figures. Every rate below states the year it belongs to — and where we could only verify an earlier year, we say so instead of pretending otherwise.

Updated 13 October 2026. We have now read the rates in the Finance Bill, 2083 as published by the Ministry of Finance. The five bands on this page match the Bill’s text, and the Bill states in its own words that Social Security Fund contributors do not pay the 1%. The source notes at the end explain what was read and what was not.

Nepal restructured its personal income tax this year, and the change is bigger than most people realise. The single-versus-couple distinction is gone, the top rate fell from 39% to 29%, and the threshold at which the top rate bites moved down from Rs 50 lakh to Rs 40 lakh. If you are budgeting from last year’s table, every number you have is wrong.

The FY 2083/84 Slabs

⭐ One schedule now applies to every resident natural person. There is no longer a separate table for a single assessee and for a couple electing joint assessment. That is the headline change, and it simplifies a decision Nepali households used to have to make every year.

Band	Slice of income	Rate	Tax on that slice	Cumulative tax
1	First Rs 10,00,000	1%*	Rs 10,000	Rs 10,000
2	Next Rs 5,00,000	10%	Rs 50,000	Rs 60,000
3	Next Rs 10,00,000	20%	Rs 2,00,000	Rs 2,60,000
4	Next Rs 15,00,000	27%	Rs 4,05,000	Rs 6,65,000
5	Above Rs 40,00,000	29%**	—	Rs 6,65,000 + 29% of excess

* The 1% is the Social Security Tax, deposited to a separate revenue head. ** The 29% is the 27% rate plus two percentage points, on income above Rs 40 lakh.

What Changed From Last Year

	FY 2082/83 (old)	FY 2083/84 (now)
Single vs couple tables	Two separate schedules	Abolished — one schedule
First band	Rs 5,00,000 (single) / Rs 6,00,000 (couple) @ 1%	Rs 10,00,000 @ 1%
Top rate	39%	29%
Top rate starts at	Rs 50,00,000	Rs 40,00,000
Number of bands	6	5

Read the first band carefully — it is the change that affects the most people. Under the old schedule a single earner paid 10% on income above Rs 5 lakh. Now the 1% band runs all the way to Rs 10 lakh. For a salaried person earning under Rs 10 lakh a year, the tax on that income is simply 1%.

⚠ The old “20% surcharge above Rs 50 lakh” rule no longer applies. That was the earlier mechanic that produced an effective 39% (30% plus 20% of that 30%). It has been replaced by a flat 2 percentage points on top of 27%, from a lower threshold. Any page still describing a 36% or 39% band is describing last year.

Who Does Not Pay the 1% Social Security Tax

The 1% first-band charge is not universal. The Finance Bill, 2083 says the tax under that band does not apply to:

a taxpayer registered as a sole proprietorship firm
Pension income
the income of an individual who contributes to a pension fund and the contribution-based Social Security Fund

SSF contributors do not pay the 1%. This is now read from the Bill’s own text, not only from professional summaries. On our reading, an employee in that group pays no tax on the first Rs 10 lakh, a saving of up to Rs 10,000 a year, and the tax on income above Rs 10 lakh is worked out as usual. If you contribute to SSF, check that your payslip shows no 1% deduction on the first band, and raise it with payroll if it does. Related: our SSF guide.

Pension Income and Persons With Disabilities

The same section of the Bill sets two reductions that apply before the tax is worked out.

Pension income. For a resident with pension income, an amount equal to 25% of the first band, which is Rs 2,50,000, is taken off taxable income, up to a limit to be prescribed.
Persons with disabilities. For a resident with a disability, an extra amount equal to 50% of the first band, which is Rs 5,00,000, is taken off taxable income.

Worked Examples

Annual taxable income of Rs 8,00,000

Entirely inside band 1. Tax = Rs 8,000 (1%).

Annual taxable income of Rs 18,00,000

Portion	Rate	Tax
First Rs 10,00,000	1%	Rs 10,000
Next Rs 5,00,000	10%	Rs 50,000
Remaining Rs 3,00,000	20%	Rs 60,000
Total		Rs 1,20,000

Annual taxable income of Rs 50,00,000

Cumulative tax at Rs 40,00,000 is Rs 6,65,000. On the remaining Rs 10,00,000 at 29% that is Rs 2,90,000. Total Rs 9,55,000. Under last year’s schedule the same income attracted roughly Rs 14,65,000 — the difference is the point of the reform.

These examples use taxable income, which is what remains after your deductions. Before you calculate anything, work out what you can deduct — the insurance premium, retirement contribution, donation and education allowances are all worth real money. See our guide to deductions and exemptions you can claim.

🤝 Not sure which band you fall into, or what you can deduct?

Send us your annual figures and we will walk you through the calculation for the current fiscal year. Digital Solution is not a tax firm — for filing and audit we will tell you when you need a registered practitioner.

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One More Change Worth Knowing

The cash-transaction disallowance threshold was halved. A single business transaction paid in cash above Rs 25,000 can be disallowed as a deduction — down from Rs 50,000. If you run a business and habitually pay suppliers in cash, this is the FY 2083/84 change most likely to cost you at assessment. Pay through the banking channel and keep the record.

Non-Residents

A non-resident individual is taxed at a flat 25%, unchanged from last year. Some specific activities carry their own rates — 5% for shipping, air transport, telecom, postal, satellite and optical-fibre services, 2% for those services provided within Nepal, and 5% on profit repatriation by a foreign permanent establishment.

Where These Figures Come From

Read in the Finance Bill, 2083. On 13 October 2026 we read section 57 of the Bill as published by the Ministry of Finance. It replaces section 1(1) of Schedule 1 of the Income Tax Act, 2058 with the five bands shown above, removes the separate schedule for couples, and carries the proviso on who does not pay the 1%. The running totals of Rs 10,000, Rs 60,000 and Rs 2,60,000 are written into the Bill’s text.

One limit remains. The Bill is the text presented with the budget. The Finance Act was gazetted on Ashadh 30, 2083 (around 15 July 2026), and we have still not opened Schedule 1 of the gazetted Act itself. A professional firm’s published summary of the enacted rates shows the same bands, so the two sources agree. For a filing decision, confirm with IRD or a registered tax practitioner.

Frequently Asked Questions

What is the income tax rate in Nepal for FY 2083/84?

1% on the first Rs 10 lakh, 10% on the next Rs 5 lakh, 20% on the next Rs 10 lakh, 27% on the next Rs 15 lakh, and 29% above Rs 40 lakh.

Is there still a separate rate for married couples?

No. The single and couple schedules were merged into one for FY 2083/84.

What happened to the 36% and 39% bands?

They are gone. The top rate is now 29%, starting from Rs 40 lakh instead of Rs 50 lakh.

What is the 1% on the first band?

Social Security Tax, deposited to a separate revenue head. Under the Finance Bill, 2083 it does not apply to a taxpayer registered as a sole proprietorship firm, to pension income, or to the income of an individual who contributes to a pension fund and the contribution-based Social Security Fund.

Are SSF contributors exempt from the 1%?

Yes, according to the Finance Bill, 2083. Its proviso says the first-band tax does not apply to the income of an individual who contributes to a pension fund and the contribution-based Social Security Fund. Check that your payslip reflects it.

What is the rate for non-residents?

A flat 25%, with specific lower rates for certain transport and telecommunications activities.

How much tax on Rs 10 lakh income?

Rs 10,000, if the whole amount is taxable income and the 1% band applies to you.

Is this on gross salary or after deductions?

On taxable income — after allowable deductions such as retirement contributions and insurance premium. Calculate the deductions first.

Sources

Ministry of Finance, Finance Bill, 2083 (आर्थिक विधेयक, २०८३), section 57, amendment to Schedule 1 of the Income Tax Act, 2058, read 13 October 2026: mof.gov.np.
Finance Act 2083 (आर्थिक ऐन २०८३), gazetted Ashadh 30, 2083, listed as the current Finance Act by the Inland Revenue Department. Schedule 1 of the gazetted Act was not retrieved directly.
PKF T.R. Upadhya & Co., published tax rate summary for the year, cross-checked against multiple independent secondary sources.

Income Tax Rates in Nepal FY 2083/84: The Slabs Changed Completely