Land & House Lease Tax in Nepal 2082/83 (2026)

No. Under the Section 88 proviso, an individual tenant paying house rent to a natural-person landlord does not withhold TDS. The landlord declares the rent on the annual return instead.

Local levels set their own rate, generally in the 10–17% range of annual rent. Kathmandu Metropolitan City levies 10%. The landlord is statutorily liable to pay the ward.

The widely-applied TDS rate on rent paid in the course of business is around 10%, withheld by a corporate or business tenant when paying a landlord, and deposited with the IRD. Where rent is paid to a company-lessor the position can differ. Because the rate is set under the Income Tax Act 2058 and can be revised by the Finance Act, confirm the current rate for your specific situation before deducting and depositing.

Section 88 of the Income Tax Act 2058 sets the withholding-tax rules, and its proviso provides that an individual paying house rent to a natural person is not required to withhold TDS on that rent. The landlord remains liable for income tax on the rental income, but the tenant's TDS step is not required in that scenario. So an ordinary individual-to-individual residential lease does not engage TDS, while a corporate or business lease does.

Yes. The Section 88 proviso turns off the tenant's withholding obligation in the individual-to-individual house-rent scenario, but it does not turn off the landlord's income tax. The landlord still includes the rental income in the annual income-tax return and pays the tax due. So a landlord receiving rent gross from an individual tenant should not assume the income is tax-free — they should report it and pay the federal income tax on it.

"Ghar bahal kar" is the local government's house-rent tax — a municipal levy on rental income, collected by the ward / municipality where the property is located, under the Local Government Operation Act 2074. Rates are set by each local level, typically in the 10–17% range of annual rent, with Kathmandu Metropolitan City at 10%. The landlord is statutorily liable to pay this to the ward, separately from federal income tax on the same rental income.

Since the 2015 Constitution and the Local Government Operation Act 2074, Nepal has a federal structure in which local levels exercise their own taxing powers, including a house-rent tax. The federal Income Tax Act 2058 separately taxes the landlord's rental income at the national level. So the two taxes coexist by design — one local, one federal — and a landlord is expected to pay both on the relevant base. They are not duplicative; they sit on different statutory powers.

Malpot is the annual land-revenue tax paid at the Land Revenue Office on the ownership of land, calculated by land area and land classification rather than by rental income. It is due near the start of the fiscal year. A landlord pays Malpot on the land whether or not it is rented, and a tenant has no Malpot obligation. Treat it as a separate annual obligation, distinct from any tax on rental income.

The landlord is statutorily liable for the municipal house-rent tax under the Local Government Operation Act 2074; a tenant assumes it only if the lease contract expressly assigns it. In practice many landlords build the cost into the agreed rent, but the legal liability sits with the landlord. The tax is paid to the ward office where the property is located, and is calculated on annual rent at the rate set by that local level.

The municipal rent tax is generally calculated as a percentage of the annual rent of the property, at the rate set by the local level — commonly 10% in Kathmandu Metropolitan City, with other local levels in a 10–17% range. The landlord declares the rent and pays at the ward office, with documentation typically including the lease agreement and the landlord's identity documents. Confirm the current rate and procedure with the specific ward where the property sits.

A landlord includes the gross rental income in the annual income-tax return for the relevant fiscal year, with TDS already deducted (where applicable) claimed as a credit against the final liability. Where no TDS was deducted under the Section 88 proviso, the full income flows through the return and tax is paid on assessment. The annual income-tax return is therefore the place where federal income tax on rent is settled, regardless of whether TDS was applied.

Yes — payments to a company-lessor are subject to TDS in the course of business, with the rate set under the Income Tax Act 2058 and applicable Finance Act. Sources differ on the exact percentage for a company-lessor scenario (some indicate 10%, others 15%), so the safe approach is to confirm the current rate for your specific counterparty and lease type with the IRD or a tax adviser before deducting. The deduction is then deposited and reflected in the monthly e-TDS return.

The municipal rent tax under the Local Government Operation Act 2074 covers rent generally and is commonly applied to commercial as well as residential leases, with the local level's rate applied to the annual rent of the property. Some local rules differentiate between residential and commercial use, and the documentation requirements at the ward may differ. Because the detail is local, a landlord with a commercial lease should confirm the specific treatment with the relevant ward.

The municipal rent tax is paid to a different authority on a different statutory basis from the federal income tax, and is not generally treated as a deduction against the federal income-tax liability on rental income. So a landlord ends up paying both — the municipal tax to the ward and the federal income tax to the IRD — on the same underlying rent. Plan compliance with both in the annual cycle, treating them as distinct obligations.

The deadline is set by each local level and commonly aligns with the end of the fiscal year, with a late-payment penalty (typically around 10%) applying afterwards. Because deadlines and penalty schedules are set locally and can differ between municipalities, the practical move for a landlord is to confirm with their ward when the next payment is due and pay within the window. Local-level portals are increasingly available for payment in addition to in-person at the ward.

Malpot is calculated on the area and classification of land — e.g. agricultural, residential, commercial — rather than on what the land earns, with rates set by the relevant authority. It is paid at the Land Revenue Office where the land is recorded, typically near the start of the fiscal year. Because Malpot is an ownership tax on the land itself, even a property that is sitting vacant or empty attracts the annual Malpot, separate from any rent or income.

A tenant does not pay tax on the rent it pays out, but a tenant operating as a business may have to withhold TDS on the rent it pays to a landlord, depending on the counterparties and the type of lease, and to deposit that with the IRD. So a corporate tenant has a withholding role, not a tax-payment role on its own rent. An individual tenant in an ordinary residential lease typically has no withholding obligation under the Section 88 proviso.

The lease agreement is the underlying contract that determines who pays what, including any assignment of the municipal rent tax between landlord and tenant and any stamp duty on the lease registration itself. Tax obligations to the IRD (income tax, TDS) and the ward (house-rent tax) are statutory and cannot be contracted away, but the economic burden can be allocated by the lease. A clear lease helps avoid disputes when the tax bills land.

When a lease involves a corporate tenant (TDS comes into play), when the property is rented across municipal lines, when a landlord is also paying Malpot on a portfolio of properties, or when an IRD or municipal authority raises a question on prior years. A lawyer or tax adviser ties the three layers together — federal income tax, municipal rent tax, and Malpot — so the landlord pays each correctly and nothing twice. Early advice prevents an accumulating exposure.