Nepal's Budget for Fiscal Year 2083/84 (2026/27) has delivered the biggest personal income tax overhaul the country has seen in more than a decade. Finance Minister Dr. Swarnim Wagle unveiled the changes on 15 Jestha 2083 (29 May 2026), and the Finance Bill was subsequently passed by both houses of the Federal Parliament before President Ram Chandra Paudel certified it into law on 14 July 2026 — just two days before the new fiscal year began. If you are a salaried employee, freelancer, or business owner in Nepal, here is everything that has changed, explained in plain language.
What Changed in Budget 2083/84 — Quick Summary
Two headline numbers define this year's reform. First, the income band taxed at the lowest 1% rate has been doubled — from NPR 5,00,000 to NPR 10,00,000. Second, the top marginal personal income tax rate has been cut by a full 10 percentage points, from 39% down to 29%. Together, these two changes mean that most salaried taxpayers earning between roughly NPR 5 lakh and NPR 40 lakh annually will see a meaningfully lower tax bill starting this fiscal year.
| Change | Before (FY 2082/83) | Now (FY 2083/84) |
|---|---|---|
| 1% slab ceiling | NPR 5,00,000 | NPR 10,00,000 |
| Top marginal rate | 39% (above NPR 50 lakh) | 29% (above NPR 40 lakh) |
| Filing categories | Separate single / couple schedules | One unified schedule for all individuals |
| Number of slabs | 6 | 5 |
Old vs New Slab Comparison (FY 2082/83 vs FY 2083/84)
Under the outgoing FY 2082/83 structure, individual taxpayers paid 1% up to NPR 5 lakh, 10% on the next NPR 2 lakh, 20% on the next NPR 3 lakh, 30% on the next NPR 10 lakh, 36% on the next NPR 30 lakh, and 39% on anything above NPR 50 lakh — with married couples enjoying a slightly wider first slab of NPR 6 lakh. The new FY 2083/84 structure scraps the marriage-based distinction entirely and applies one progressive schedule to every resident individual.
| Taxable Income Slab | Tax Rate |
|---|---|
| Up to NPR 10,00,000 | 1% |
| NPR 10,00,001 – 15,00,000 | 10% |
| NPR 15,00,001 – 25,00,000 | 20% |
| NPR 25,00,001 – 40,00,000 | 27% |
| Above NPR 40,00,000 | 29% |
How Social Security Tax (SST) Applies Under the New Structure
A common misconception is that income up to NPR 10 lakh is completely tax-free. It is not. That first slab still carries a 1% Social Security Tax (SST), which functions as ordinary tax revenue rather than a retirement contribution. However, taxpayers who are enrolled in the Social Security Fund (SSF) — contributing 11% of salary as an employee, matched by a 20% employer contribution — are exempt from paying this 1% SST, since the SSF contribution already serves a similar protective purpose. If you are not enrolled in SSF, expect the 1% to apply on your first NPR 10 lakh of taxable income.
Married vs Single Filer Thresholds — What Happened to Them?
Previously, married couples filing jointly received a wider first-slab threshold (NPR 6 lakh instead of NPR 5 lakh) as a form of relief. Budget 2083/84 removes this distinction altogether. Every resident individual — married or single — now follows the same unified five-slab schedule described above. This simplifies compliance and, for many couples, changes the calculus around whether to file jointly or separately, since the benefit of joint filing under the old system has effectively disappeared.
Sample Tax Calculations for Three Income Levels
Numbers make this easier to understand than percentages alone. Here is how the new slabs apply at three different annual taxable income levels, assuming the taxpayer is not enrolled in SSF and has no additional exemptions applied beyond the standard slabs.
1. Annual taxable income of NPR 60,000: This falls entirely within the 1% slab. Tax payable = 1% of NPR 60,000 = NPR 600.
2. Annual taxable income of NPR 15,00,000: The first NPR 10,00,000 is taxed at 1% (NPR 10,000), and the remaining NPR 5,00,000 is taxed at 10% (NPR 50,000). Total tax payable = NPR 60,000. Under the old FY 2082/83 slabs, the same income would have attracted roughly NPR 2,35,000 in tax — a reduction of about NPR 1,75,000.
3. Annual taxable income of NPR 40,00,000: NPR 10,00,000 at 1% (NPR 10,000) + NPR 5,00,000 at 10% (NPR 50,000) + NPR 10,00,000 at 20% (NPR 2,00,000) + NPR 15,00,000 at 27% (NPR 4,05,000) = NPR 6,65,000 total tax payable.
When Do the New Rates Take Effect?
The new slabs apply to income earned from 1 Shrawan 2083 (16–17 July 2026) onward, marking the start of FY 2083/84. Income earned during Jestha and Ashadh 2083 — the final two months of FY 2082/83 — continues to be assessed under the old rates. As of 14 July 2026, President Ram Chandra Paudel formally certified the Finance Bill 2083 (along with the Appropriation Bill and the Bill to Raise National Debt), giving these rates full legal force as the Finance Act 2083. Employers should ensure payroll systems and monthly TDS calculations are updated accordingly from Shrawan onward.
FAQ: Is This Rate Confirmed or Still a Proposal?
Q: Are these new tax slabs final, or could they still change?
A: They are confirmed. The Finance Bill 2083 was passed by both houses of Nepal's Federal Parliament and certified by the President on 14 July 2026, making it binding law as the Finance Act 2083, effective from 1 Shrawan 2083.
Q: Does the new NPR 10 lakh threshold mean I pay zero tax below that amount?
A: No. Income up to NPR 10 lakh is taxed at 1% (the Social Security Tax), unless you are an SSF contributor, in which case this portion may be exempt.
Q: Did corporate tax rates or VAT also change?
A: No changes were made to standard corporate tax rates or the 13% VAT rate under this budget for personal income taxpayers; those remain governed by their existing provisions.
Q: Where can I get official confirmation of my exact liability?
A: Always cross-check your specific situation against the gazetted Finance Act 2083 and Inland Revenue Department (IRD) circulars, or consult a registered professional.
Disclaimer: This article is for general information only and does not constitute legal or tax advice. Tax rules can change and individual circumstances vary — please consult an ICAN-registered Chartered Accountant (CA) before making any financial or tax-related decisions.
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