(was Rs 5L)
(was 39%)
(was 6)
same slabs now
📜 In this article
If you are a salaried employee in Nepal, the tax deducted from your payslip every month is going to change starting Shrawan 2083. Whether you earn Rs 50,000 a month or Rs 4,00,000 a month, this guide walks you through every number you need — the new slabs, the deductions you can claim, how your employer calculates TDS, and what to do if you need to file a return yourself.
Let us start with the most important comparison first.
1. Old vs new income tax slabs — FY 2082/83 vs FY 2083/84
Finance Minister Dr. Swarnim Wagle presented the FY 2083/84 budget on Jestha 15, 2083 (May 29, 2026). The personal income tax changes are the most significant in Nepal's recent history. Here is the direct comparison:
| Annual income (Rs) | FY 2082/83 rate | FY 2083/84 rate | Change |
|---|---|---|---|
| Up to Rs 10,00,000 (10 lakh) | 1% on first Rs 5L only | 1% on full Rs 10L | Threshold doubled ▲ |
| Rs 10,00,001 – Rs 15,00,000 | 10% | 10% | No change — |
| Rs 15,00,001 – Rs 25,00,000 | 20% | 20% | No change — |
| Rs 25,00,001 – Rs 40,00,000 | 30% | 27% | Reduced by 3% ▼ |
| Above Rs 40,00,000 | 36–39% | 29% | Cut by up to 10% ▼▼ |
Three structural changes in one budget:
- The 1% band (Social Security Tax) threshold doubled from Rs 5 lakh to Rs 10 lakh.
- The top marginal rate was slashed by 10 percentage points — from 39% down to 29%.
- The separate single and married couple slab tables were merged into one unified schedule for all resident individuals.
💡 Why does this matter?
Under the old system, a single person earning Rs 6 lakh paid 1% on Rs 5 lakh and 10% on Rs 1 lakh — total tax of Rs 15,000 per year. Under the new system, that same person pays just 1% on the full Rs 6 lakh — total tax of Rs 6,000 per year. That is a Rs 9,000 saving per year, or Rs 750 saved per month.
2. The 5 new tax slabs for FY 2083/84 — explained simply
Nepal uses a progressive tax system. This means higher rates apply only to the portion of income that falls within each band — not to your total income. Crossing into a higher slab does not make your entire salary taxable at that higher rate.
| Slab | Annual income range | Tax rate | Max tax in slab |
|---|---|---|---|
| Slab 1 | Rs 0 – Rs 10,00,000 | 1% (SST) | Rs 10,000 |
| Slab 2 | Rs 10,00,001 – Rs 15,00,000 | 10% | Rs 50,000 |
| Slab 3 | Rs 15,00,001 – Rs 25,00,000 | 20% | Rs 2,00,000 |
| Slab 4 | Rs 25,00,001 – Rs 40,00,000 | 27% | Rs 4,05,000 |
| Slab 5 | Above Rs 40,00,000 | 29% | No limit |
⚠️ Important: the first Rs 10 lakh is NOT tax-free
A common misconception is that income up to Rs 10 lakh is tax-free. It is not — it is taxed at 1% Social Security Tax (SST). Someone earning exactly Rs 10 lakh per year pays Rs 10,000 in income tax, which works out to about Rs 833 per month. The only way to make this 1% disappear is to contribute to the Social Security Fund (SSF) — more on that below.
Who does this apply to?
This unified slab table applies to all resident individuals in Nepal — whether you are single, married, salaried, or self-employed. The old system where married couples got an extra Rs 1 lakh in the first band no longer exists. Everyone uses the same table from Shrawan 2083 onwards.
3. Deductions that reduce your taxable income
Before the slab rates are applied, Nepal's Income Tax Act 2058 allows several deductions that lower your net assessable income (the amount actually taxed). Understanding and using all available deductions is the legal way to minimise your tax bill.
Available deductions for salaried employees
🏠 SSF contribution
Cap: Rs 5,00,000 or 1/3 of income
Social Security Fund. Combined cap shared with EPF and CIT. Also waives the 1% SST on the first slab.
🏠 EPF contribution
Cap: Rs 5,00,000 or 1/3 of income
Employees Provident Fund. Shares the combined cap with SSF and CIT. Typical rate is 10% of basic salary.
🏠 CIT contribution
Cap: Rs 5,00,000 or 1/3 of income
Citizen Investment Trust. Voluntary retirement savings. Shares the combined Rs 5 lakh cap with SSF and EPF.
❤️ Life insurance
Cap: Rs 40,000 per year
Premiums on a life insurance policy on your own life. Separate cap from the SSF/EPF/CIT bucket.
🏥 Health insurance
Cap: Rs 20,000 per year
Premiums on a health insurance policy for yourself or dependants. Separate from all other caps.
🌏 Remote area allowance
Cap: Rs 10,000 – Rs 50,000
Deduction based on location classification. Applies to employees posted in designated remote areas.
⚠️ How the SSF/EPF/CIT cap works — don't make this mistake
SSF, EPF, and CIT contributions are pooled into one bucket. The deduction limit is whichever is lower: Rs 5,00,000 or one-third (1/3) of your annual income.
Example: If your annual income is Rs 12,00,000, one-third is Rs 4,00,000. Even if you contributed Rs 5,00,000 to EPF, only Rs 4,00,000 is deductible. The extra Rs 1,00,000 goes into your provident fund but gives you no additional tax benefit that year.
The SSF advantage — the most powerful tax move in Nepal
✅ SSF contributors get a double benefit
Employees contributing to the Social Security Fund get two tax advantages:
1. The 1% Social Security Tax on the first Rs 10 lakh is completely waived — saving up to Rs 10,000 per year.
2. The SSF contribution itself is deductible from taxable income (up to the cap).
This makes SSF membership the single most tax-efficient choice available to a salaried employee in Nepal.
Women employees — extra 10% rebate
Female employees filing taxes individually with their own PAN receive a 10% rebate on their calculated income tax amount under the Income Tax Act 2058. This is applied after the slab calculation — not before. So if your computed tax is Rs 50,000, the rebate reduces it to Rs 45,000.
4. Worked examples — how much will you pay?
Let us run the numbers at four common salary levels. In each example, we assume the employee is not an SSF contributor (unless noted) and claims standard deductions.
📈 Example 1: Rs 50,000/month salary (Rs 6,00,000/year)
Profile: Junior employee, EPF contributor, no insurance deductions
| Step | Calculation | Amount (Rs) |
|---|---|---|
| Annual gross income | Rs 50,000 × 12 | 6,00,000 |
| Less: EPF deduction | Rs 5,000 × 12 (10% of basic) | – 60,000 |
| Net assessable income | 5,40,000 | |
| Slab 1 tax (1% on Rs 5.4L) | 5,40,000 × 1% | 5,400 |
| Total annual tax | Rs 5,400 | |
| Monthly TDS | Rs 450/month | |
Under the old FY 2082/83 system, this person would have paid Rs 11,000 in tax. New system saves them Rs 5,600 per year.
📈 Example 2: Rs 1,00,000/month salary (Rs 12,00,000/year)
Profile: Mid-level professional, SSF contributor, life insurance Rs 30,000/yr
| Step | Calculation | Amount (Rs) |
|---|---|---|
| Annual gross income | Rs 1,00,000 × 12 | 12,00,000 |
| Less: SSF deduction | 1/3 of 12L = 4L (cap applies) | – 4,00,000 |
| Less: Life insurance | Rs 30,000 (within Rs 40,000 cap) | – 30,000 |
| Net assessable income | 7,70,000 | |
| Slab 1 tax | SSF contributor → 1% waived | 0 |
| Total annual tax | Rs 0 | |
| Monthly TDS | Rs 0/month | |
With SSF contribution and insurance deductions, net assessable income falls below Rs 10 lakh — and since SSF waives the 1% SST, this employee pays zero income tax.
📈 Example 3: Rs 1,50,000/month salary (Rs 18,00,000/year)
Profile: Senior professional, EPF at 10% of basic (Rs 15,000/month), health insurance Rs 20,000/yr
| Step | Calculation | Amount (Rs) |
|---|---|---|
| Annual gross income | Rs 1,50,000 × 12 | 18,00,000 |
| Less: EPF | Rs 15,000 × 12 | – 1,80,000 |
| Less: Health insurance | Rs 20,000 (at cap) | – 20,000 |
| Net assessable income | 16,00,000 | |
| Slab 1 (1% on Rs 10L) | 10,00,000 × 1% | 10,000 |
| Slab 2 (10% on Rs 5L) | 5,00,000 × 10% | 50,000 |
| Slab 3 (20% on Rs 1L) | 1,00,000 × 20% | 20,000 |
| Total annual tax | Rs 80,000 | |
| Monthly TDS | Rs 6,667/month | |
📈 Example 4: Rs 4,00,000/month salary (Rs 48,00,000/year)
Profile: Senior executive, EPF at cap (Rs 5,00,000/yr), life insurance Rs 40,000, health insurance Rs 20,000
| Step | Calculation | Amount (Rs) |
|---|---|---|
| Annual gross income | Rs 4,00,000 × 12 | 48,00,000 |
| Less: EPF (at absolute cap) | Rs 5,00,000 | – 5,00,000 |
| Less: Life insurance | Rs 40,000 (at cap) | – 40,000 |
| Less: Health insurance | Rs 20,000 (at cap) | – 20,000 |
| Net assessable income | 42,40,000 | |
| Slab 1 (1% on Rs 10L) | 10,00,000 × 1% | 10,000 |
| Slab 2 (10% on Rs 5L) | 5,00,000 × 10% | 50,000 |
| Slab 3 (20% on Rs 10L) | 10,00,000 × 20% | 2,00,000 |
| Slab 4 (27% on Rs 15L) | 15,00,000 × 27% | 4,05,000 |
| Slab 5 (29% on Rs 2.4L) | 2,40,000 × 29% | 69,600 |
| Total annual tax | Rs 7,34,600 | |
| Monthly TDS | Rs 61,217/month | |
Under the old 39% top rate, this executive would have paid roughly Rs 10,50,000+ in tax. The new structure saves high earners over Rs 3 lakh per year.
5. How TDS works on your salary — what every employee should know
For most salaried employees in Nepal, income tax is handled entirely through Tax Deducted at Source (TDS). Your employer calculates your estimated annual tax, divides it by 12, and deducts that amount from your monthly paycheck before crediting it to the Inland Revenue Department (IRD).
What changes from Shrawan 2083?
From 1 Shrawan 2083 (mid-July 2026), your employer's payroll team must use the new FY 2083/84 slab table to calculate monthly TDS. If you were paying, say, Rs 4,000/month in TDS under the old system, your HR team should re-run the calculation — many employees will see their TDS drop significantly.
📌 Action: Check your first Shrawan payslip
When you get your Shrawan 2083 salary slip, verify that TDS has been updated to reflect the new slabs. If your employer is still deducting at the old 2082/83 rate, point them to the IRD circular and ask for a recalculation. Over-deducted TDS can be claimed back, but it involves paperwork — better to catch it early.
Do you need to file a return?
Many salaried employees wonder if they need to file an annual income tax return. Here is a simple guide:
| Your situation | Do you need to file? |
|---|---|
| Single employer, fully covered by TDS, no other income | ❌ Generally no |
| Freelance or rental income in addition to salary | ✅ Yes, must file |
| Multiple employers in the same year | ✅ Yes, must file |
| Want to claim a refund on over-deducted TDS | ✅ Yes, must file |
| Annual income above Rs 40 lakh (top slab) | ✅ Strongly recommended |
6. How to file your income tax return online — step by step
If you need to file a return, Nepal's IRD makes it possible to do it entirely online. Here is the process:
- Get your PAN number — PAN (Permanent Account Number) is mandatory. Register free at taxpayerportal.ird.gov.np or through the Nagarik App. You will need your citizenship certificate and a passport photo.
- Gather your documents — Annual salary statement from your employer, EPF/SSF/CIT contribution receipts, insurance premium receipts, Form 16 (TDS certificate).
- Log in to the IRD taxpayer portal — Log in with your PAN and password.
- Select the return type — Choose "Individual Income Tax Return" for the fiscal year 2083/84.
- Enter your income and deductions — Fill in your total salary, deductions for EPF/SSF/CIT, insurance premiums, and TDS already deducted by your employer.
- Submit and pay any balance — If your total tax liability exceeds TDS already deducted, pay the difference online. If you over-paid, a refund can be requested.
📅 Filing deadlines — do not miss these
Standard deadline: End of Ashoj 2084 (approximately mid-October 2027).
Extended deadline: Up to end of Poush 2084 (mid-January 2028) — available on request.
Late filing penalty: Rs 1,000–Rs 5,000 plus interest at 10% per annum on unpaid tax.
7. Frequently asked questions — Nepal income tax 2083/84
Nepal ma income tax slab 2083/84 ma kati ho?
FY 2083/84 ma Nepal ko income tax 5 slab ma divided chha: Rs 10 lakh samma 1%, Rs 10–15 lakh 10%, Rs 15–25 lakh 20%, Rs 25–40 lakh 27%, ra Rs 40 lakh bhandaa maathi 29%.
Is there a tax-free limit in Nepal for FY 2083/84?
There is no fully tax-free income limit. Income up to Rs 10 lakh is taxed at 1% (Social Security Tax). However, SSF contributors have this 1% waived, making their first Rs 10 lakh effectively tax-free. With EPF and insurance deductions, many employees earning up to Rs 12–13 lakh can bring their net assessable income below Rs 10 lakh.
What is the TDS rate for salary in Nepal for FY 2083/84?
There is no single fixed TDS rate. Your employer calculates your estimated annual tax using the progressive slabs, divides by 12, and deducts that amount monthly. The rate varies with your salary level and deductions. Use the worked examples in this article to estimate your monthly TDS.
Do I need to file a tax return if my employer deducts TDS?
If you have a single employer and no other income, you generally do not need to file a separate return. However, if you have freelance income, rental income, or multiple income sources — or want to claim a refund on over-deducted TDS — you must file a return at the IRD portal.
Married vs single — is there a difference in FY 2083/84?
No. Starting FY 2083/84, the separate single and married couple slab tables have been eliminated. All resident individuals — married or single — now use the same 5-slab table.
What is the female employee tax rebate in Nepal?
Female employees filing taxes individually receive a 10% rebate on their calculated income tax under the Income Tax Act 2058. For example, if your computed tax is Rs 80,000, the rebate reduces it to Rs 72,000. This is expected to continue in FY 2083/84.
SSF contributor hunu ko tax benefit ke ho?
SSF contributors get two benefits: (1) the 1% Social Security Tax on the first slab is completely waived, saving up to Rs 10,000 per year, and (2) SSF contributions are deductible from taxable income up to Rs 5 lakh or one-third of income. Together, these make SSF membership the most tax-efficient option for salaried employees in Nepal.
When is the income tax return deadline in Nepal for FY 2083/84?
The return for FY 2083/84 (income earned Shrawan 2083 to Ashad 2084) is due by the end of Ashoj 2084 — approximately mid-October 2027. An extension to end of Poush 2084 is available on request from the IRD.
Do these tax changes apply to government employees too?
Yes. The income tax slabs apply to all resident individuals, including government employees. Civil servants also received approximately a 21% pay rise effective Shrawan 1, 2083, so their gross income and TDS will both change from the same date.
Summary — key takeaways
- Nepal's FY 2083/84 income tax brings the biggest reform in over a decade — new 5-slab structure, unified for all individuals.
- The 1% Social Security Tax threshold has doubled from Rs 5 lakh to Rs 10 lakh.
- The top marginal rate has been cut from 39% to 29%.
- Deductions for SSF/EPF/CIT (up to Rs 5 lakh or 1/3 of income), life insurance (Rs 40,000), and health insurance (Rs 20,000) can significantly reduce your taxable income.
- SSF contributors get the 1% SST waived — the single best tax move available.
- Check your Shrawan payslip to confirm your employer has applied the new TDS rates.
- Most employees with a single employer and no side income do not need to file a return — TDS covers them.
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Disclaimer: This article is for informational purposes only. Tax rules may change after the Finance Act 2083 is fully enacted and IRD circulars are issued. Consult a qualified chartered accountant (CA) for advice specific to your situation.
Sources: Budget Speech FY 2083/84 (Ministry of Finance, Nepal), Finance Ordinance 2083, Income Tax Act 2058 (as amended), Inland Revenue Department Nepal (ird.gov.np).
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