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The income tax system in Nepal is governed by the Income Tax Act, 2058, and is revised annually through the national budget presented by the Ministry of Finance. For the fiscal year 2081/2082 (2024/2025), the Government of Nepal has introduced updated income tax rates applicable to individuals, businesses, and other entities. These rates reflect the government’s fiscal priorities, economic policies, and efforts to promote equity and revenue generation. Income tax is a major source of revenue for the government, helping fund public services such as healthcare, education, infrastructure, and social security.
In 2081/2082, the government maintained a progressive tax structure for individuals, with different slabs based on income levels, while offering concessions for women, senior citizens, and individuals with disabilities. Corporate income tax rates vary depending on the type of business and industry. The updated tax rates also reflect efforts to improve compliance, encourage entrepreneurship, and expand the tax base. Through these changes, the government aims to strike a balance between revenue mobilization and economic growth. This introduction provides a foundation to understand the key highlights and implications of the income tax rates for the fiscal year 2081/2082 in Nepal.
Personal Income Tax
Unmarried Individual
| Tax Bracket | Annual Income | Tax Rate | Maximum Tax Amount |
|---|---|---|---|
| 1 | 1 to 500,000 | 1% | NPR 5,000 |
| 2 | 500,001 to 700,000 | NPR 5,000 plus 10% on the amount exceeding NPR 500,000 | NPR 25,000 |
| 3 | 700,001 to 1,000,000 | NPR 25,000 plus 20% on the amount exceeding NPR 700,000 | NPR 85,000 |
| 4 | 1,000,001 to 2,000,000 | NPR 85,000 plus 30% on the amount exceeding NPR 1,000,000 | NPR 385,000 |
| 5 | 2,000,001 to 5,000,000 | NPR 385,000 plus 36% on the amount exceeding NPR 2,000,000 | NPR 1,465,000 |
| 6 | 5,000,001 and above | NPR 1,465,000 plus 39% on the amount exceeding NPR 5,000,000 | — |
Married Couples (who choose to be assessed jointly)
| Tax Bracket | Annual Income | Tax Rate | Maximum Tax Amount |
|---|---|---|---|
| 1 | 1 to 600,000 | 1% | NPR 6,000 |
| 2 | 600,001 to 800,000 | NPR 6,000 plus 10% on the amount exceeding NPR 600,000 | NPR 26,000 |
| 3 | 800,001 to 1,100,000 | NPR 26,000 plus 20% on the amount exceeding NPR 800,000 | NPR 86,000 |
| 4 | 1,100,001 to 2,000,000 | NPR 86,000 plus 30% on the amount exceeding NPR 1,100,000 | NPR 356,000 |
| 5 | 2,000,001 to 5,000,000 | NPR 356,000 plus 36% on the amount exceeding NPR 2,000,000 | NPR 1,436,000 |
| 6 | 5,000,001 and above | NPR 1,436,000 plus 39% on the amount exceeding NPR 5,000,000 | — |
Corporate Income Tax
| Businesses/Entities | Tax Rate |
|---|---|
| Corporations in General | 25% |
| Banking and Financial Institutions | 30% |
| Insurance Companies | 30% |
| Entity Engaged in Financial Transactions | 30% |
| Telecommunication and Internet Services | 30% |
| Money Transfer | 30% |
| Securities Business, Merchant Banking, Commodity Futures Market, Securities and Commodities Broker Business | 30% |
| Tobacco and Tobacco Products | 30% |
| Entity Engaged in the Petroleum Business | 30% |
| Water Travel, Air Transport, or Telecommunication Services by a Non-Resident Person (Services Extend Beyond Nepal) | 5% |
| Water Travel, Air Transport, or Telecommunication Services by a Non-Resident Person (Services Do Not Extend Beyond Nepal) | 2% |
| Repatriation of Income by a Foreign Permanent Establishment of a Non-Resident Person | 5% |
In conclusion, the income tax structure for the fiscal year 2081/2082 in Nepal reflects the government’s continued commitment to economic equity, fiscal responsibility, and inclusive growth. With a progressive tax rate for individuals and specific slabs for unmarried and married taxpayers, the system aims to ensure fair contribution based on income levels. Special concessions for women, senior citizens, and persons with disabilities demonstrate efforts to support vulnerable groups. On the corporate front, tax rates have been tailored according to the nature of the business, with higher rates for industries like banking, insurance, and telecommunications, which have stronger revenue potential. Meanwhile, special rates for non-resident entities help regulate cross-border transactions. By adjusting the tax brackets and rates, the government not only seeks to boost revenue collection but also encourages tax compliance and economic participation. Overall, these measures are geared toward fostering national development while promoting social justice through a fair taxation system.
Frequently Asked Questions
For unmarried individuals, the tax starts at 1% up to NPR 500,000 and increases progressively. For married couples, the threshold begins at NPR 600,000.
General corporations are taxed at 25%, while banks, insurance, telecom, and financial service entities are taxed at 30%.
Yes. Married couples filing jointly enjoy a higher tax-free threshold—NPR 600,000 instead of NPR 500,000 for unmarried individuals.
For incomes exceeding NPR 5,000,000, a tax of 39% applies on the exceeding amount, in addition to the base NPR 1,465,000 or 1,436,000 (depending on marital status).
Yes. Women with only employment income receive a 10% tax discount. Senior citizens above 60 also get tax concessions under the Income Tax Act.
Non-residents are subject to a 2% or 5% tax depending on service scope. Repatriated income is taxed at 5%.
Late filing and tax evasion can result in fines, interest penalties, and legal action under the Income Tax Act, 2058.
Yes. Any income above the exempt threshold must be declared. Freelancers and sole traders are required to file tax returns.
Yes. All income including from digital platforms, e-commerce, or social media monetization is taxable under Nepal’s income tax law.
Documents include PAN, income proof (salary slips, invoices), marriage certificates (for joint filing), previous year’s tax return, and bank statements.
Disclaimer:
This article is intended solely for informational purposes and should not be interpreted as legal advice, advertisement, solicitation, or personal communication from the firm or its members. Neither the firm nor its members assume any responsibility for actions taken based on the information contained herein.