Understanding Your Annual Tax Statement from Employer in Nepal

Every salaried employee in Nepal is entitled to a document that proves exactly how much tax was deducted from their salary over the year — commonly called a TDS certificate or annual tax statement. It sounds like paperwork you can safely ignore, right up until you need it: to file your own return, to prove your income for a loan application, or to make sure your employer actually deposited the tax they deducted from your paycheck instead of just withholding it on paper.

This guide explains exactly what this statement must legally contain, how to check it against your own payslips using IRD's own records, and what to do if it's wrong, late, or never shows up at all — including if you've already left the job.

What the Statement Must Legally Contain

Under the Income Tax Act 2058 and its accompanying rules, an employer acting as a withholding agent is legally required to issue a TDS certificate to every employee from whose salary tax was deducted. This document — sometimes referred to informally using the older "Form 25" or "Form No. T-C-01-01-0361" naming — must clearly show your Permanent Account Number (PAN) and full name, the income year or fiscal year the statement covers, the total remuneration paid to you during that period, the total tax deducted at source from that remuneration, and the employer's own PAN along with an authorized signature or certification confirming the figures.

This isn't just a courtesy document — it's your proof that tax withheld from your salary was actually deposited with the government under your name, which is exactly what allows you to claim credit for that tax when you file your own annual return, or to demonstrate a clean tax record when applying for a visa, loan, or tax clearance certificate.

How to Cross-Check It Against Your Payslips

Don't just file the certificate away once you receive it — checking it against your own records takes a few minutes and can catch a costly error early. Start with the basics: does the PAN listed match yours exactly, and does the income year match the fiscal year you're checking? Next, add up the gross salary figures from your monthly payslips for that fiscal year and compare the total against the remuneration figure on the certificate — the two should match, accounting for any allowances or benefits that were correctly included or excluded under the rules.

Then check the actual tax amount: sum the monthly TDS deductions shown on your payslips and compare that total to the tax-deducted figure on the certificate. Beyond your own payslip records, the IRD Taxpayer Portal gives you a more authoritative way to verify this independently. By logging into your account with your personal PAN and checking the "Withholdee Information" or Annexure 10 section, you can see every deposit made against your PAN by every withholding agent — your employer, your bank, any tenant or broker — each listed with the date, amount, and the name of the deductor. This lets you confirm not just that your employer told you the correct figures, but that they actually deposited that money with the IRD rather than just recording it internally.

What to Do If It's Wrong or Missing

If you spot a discrepancy — wrong PAN, incorrect salary figure, or a tax amount that doesn't match what was actually deducted from your payslips — contact your employer's HR or finance department in writing as soon as possible and request a corrected certificate. Be specific about what doesn't match and, if possible, attach the relevant payslips so they can quickly identify where the error occurred. If the certificate has already been used to file a return and the correction changes your tax liability, you may need to file a revised return once the corrected certificate is issued.

If your employer is simply slow to issue the certificate, a polite follow-up referencing the legal deadline is usually enough — most delays are administrative rather than deliberate. If your employer refuses outright or becomes unresponsive despite repeated written requests, you have the right to escalate the matter by filing a formal complaint with your nearest Inland Revenue Office, since issuing this certificate isn't optional for the employer — it's a legal obligation under the Act. Keep copies of every written request you make, since these form your evidence trail if the matter needs to go to the tax office.

Frequently Asked Questions

Is the employer required to issue this even if you already left the job?

Yes. If your employment was terminated during the fiscal year, your former employer is still legally required to issue your TDS certificate — and must do so within 30 days of your termination date, rather than waiting until the end of the fiscal year as they would for a continuing employee. This obligation doesn't disappear just because you've moved on to a new job or are between positions.

By when should my employer give me this statement if I'm still employed?

For continuing employees, the TDS certificate covering salary must be issued within 30 days of the end of the fiscal year, which in practice means by roughly mid-August given Nepal's fiscal year-end in mid-July.

Can I get my TDS certificate directly from IRD instead of my employer?

In many cases, yes. Employees with a single employer and annual income below the relevant threshold can log into the IRD Taxpayer Portal with their personal PAN and download their own tax clearance or withholding information directly, which is also a useful way to independently verify what your employer has reported.

What if I had more than one employer in the same fiscal year?

You'll need a separate TDS certificate from each employer covering their respective employment periods, and you should consolidate all of them when filing your annual return so the total tax credit claimed matches the sum of what was actually deducted and deposited across all employers.

Does a missing or wrong TDS certificate affect my ability to file my tax return?

It can. Since the certificate is your basis for claiming credit for tax already deducted, an incorrect or missing certificate can lead to your return understating the credit you're entitled to, or create a mismatch with IRD's own Annexure 10 records — which is exactly why cross-checking it before filing is worth the extra few minutes.