TDS Rate Nepal: Full Table & How to Claim

📅 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.

TDS is tax you have already paid. The mistake that costs Nepali taxpayers most is not knowing which deductions are final and which are advance — because the advance ones are money you can claim back, and every year people simply do not.

The Rates You Are Most Likely to Meet

Payment type	Rate
Salary / remuneration	Per the income tax slabs
Rent — except house rent paid to a natural person	10%
Interest to a natural person (non-business) from a bank, co-operative, financial institution, debenture or listed company	6%
Interest to entities	15%
Dividend (resident and non-resident)	5%
Service or consultancy fee — against a VAT invoice	1.5%
Service or consultancy fee — without a VAT invoice	15%
Contract payments exceeding Rs 50,000	1.5%
Contract or agreement with a non-resident	5%
Commission or incentives not classed as service fee	15%
Insurance agent commission — new this year	20%
Vehicle hire to a VAT-registered person	1.5%
Freight / carriage vehicle lease	2.5% without VAT invoice, 1.5% with
Mutual fund returns	5% natural person / 15% other
Satellite, bandwidth, optical fibre, telecom equipment, electricity transmission	10%
Windfall gains	25%
Foreign college or university registration, education and exam fees	5%

Two genuinely new items this year. Insurance agent commission now attracts 20% final withholding, where previously there was none. And works carried out through a User Committee above Rs 50 lakh no longer attract TDS at all — the 1.5% was removed.

Foreign Income: The 1% and 5% Both Exist

Freelancers earning from abroad often see two different rates quoted and assume one source is wrong. Both are correct — they apply to different taxpayers.

Situation	Rate
Any person receiving foreign currency for software and similar electronic services supplied outside Nepal	1%
Resident natural person not in business operation, same electronic services	5%
Resident natural person not in business — consultancy services outside Nepal	5%
Resident natural person not in business — audio-visual upload on social media	5%
E-commerce or digital platform operator paying platform sellers	1%
Ride-sharing operators paying natural persons — new this year	1%

The deduction is made by the bank or money transfer company at the point the money reaches you. More on the mechanics: receiving international payments in Nepal and our freelancer tax guide.

Final vs Advance: The Distinction That Matters

Final withholding

The tax is settled. Nothing further to declare, and nothing to claim back. Includes: dividends (5%), interest to a non-business natural person (6%), insurance agent commission (20%), windfall gains (25%), gain on investment insurance (5%), and freight or vehicle rental paid to a resident natural person.

Advance tax

Everything else. It is credited against your final liability when you file — which means if too much was withheld, you get it back. If you never file, you never get it back.

⚠ This is where money is lost every single year. A freelancer or consultant has 1.5% or 15% withheld on every invoice. That is advance tax. If their actual liability for the year is lower — which it often is once deductions are applied — the difference is refundable. But only if they file and only if they hold the TDS certificates. No certificate, no credit.

There is also an elective final tax. Capital gains on shares, on land and buildings, and foreign-currency service income can be treated as finally taxed if you elect not to file a return. That can be convenient — but note it means forgoing any refund. Weigh it rather than defaulting into it.

🤝 Had TDS deducted and not sure if you can claim it back?

Tell us what was withheld and on what — we will help you work out whether it is final or advance, and what you need to collect to claim the credit.

📲 WhatsApp: +977 9766597181 Our Services →

How to Claim Your Credit

Get the TDS certificate from every party that withheld tax on a payment to you. This is a statutory obligation on them — ask, and keep asking.
Check the certificate details — your PAN, the amount, the period. An error here is what causes the credit to fail at matching.
Confirm the withholder actually deposited it. A certificate is only worth what was remitted against your PAN.
Claim it when you file and set it against your assessed liability.
Keep every certificate with your filing record.

If You Are the One Deducting

Employers and businesses that withhold have their own obligations. Deposit the tax and file the e-TDS return through the taxpayer portal.

⚠ A deadline conflict we could not resolve, so we are showing you both. Practitioner sources are unanimous that TDS must be deposited within 25 days of the end of the Nepali month of deduction. The base statutory text we could reach says 15 days — apparently not reflecting a later amendment. Work to the shorter period if in doubt, and confirm with your tax practitioner. Depositing early costs nothing; depositing late attracts interest.

On penalties: failing to file the withholding return attracts 2.5% per year on the tax that should have been withheld, and unpaid tax carries 15% per year interest. A widely quoted “1.5% per month” figure circulates online and we could not substantiate it — treat it with suspicion.

Frequently Asked Questions

What is the TDS rate on service fees in Nepal?

1.5% against a VAT invoice, and 15% without one. The gap is large enough that VAT registration changes the economics of consulting work.

What is the TDS on bank interest?

6% for a natural person not in business, and it is final — nothing further to declare and nothing to reclaim.

Is TDS on my freelance income refundable?

If it is advance tax, yes — credited against your liability when you file. You need the TDS certificates to claim it.

Is there TDS on house rent?

Not federal TDS when the landlord is a natural person — that rent is taxed at the local level instead. See our guide on house rent tax.

What is new in TDS this year?

Insurance agent commission now attracts 20%, ride-sharing operators withhold 1% from natural persons, and TDS on User Committee works above Rs 50 lakh was removed.

When must a business deposit TDS?

Practitioner guidance says within 25 days of the month end; the base statutory text we could read says 15. Work to the shorter period and confirm.

What is a TDS certificate?

The document from the withholder evidencing tax deducted on your behalf. Without it you generally cannot claim the credit.

What if the withholder never deposited my TDS?

Raise it with them in writing first. Your credit depends on the deposit being made against your PAN.

Sources

Published professional tax-rate summary for FY 2083/84, cross-checked against a second independent summary.
Income Tax Act 2058 — withholding provisions, TDS certificate requirement, and Sections 117 and 119 on fees and interest.

TDS in Nepal: Rates, and How to Claim Back the Tax You Already Paid