Introduction
Understanding tax is important for all businesses and individuals in Nepal. This guide explains tax meaning, types, and current rates.
Meaning of Tax
Tax is a mandatory payment to the government. It funds public services like healthcare, education, and infrastructure.
Types of Tax
Direct Tax
- Income tax
- Wealth tax
- Gift tax
- Capital gains tax
Indirect Tax
- VAT (Value Added Tax)
- Custom duty
- Service tax
- Sales tax
Income Tax Rates FY 2082/83
For Married Individuals
| Annual Income | Tax Rate |
|---|---|
| Up to Rs 6,00,000 | 1% |
| Rs 6,00,001 - Rs 8,00,000 | 10% |
| Rs 8,00,001 - Rs 11,00,000 | 20% |
| Rs 11,00,001 - Rs 20,00,000 | 30% |
| Above Rs 20,00,000 | 36% |
For Unmarried Individuals
| Annual Income | Tax Rate |
|---|---|
| Up to Rs 5,00,000 | 1% |
| Rs 5,00,001 - Rs 7,00,000 | 10% |
| Rs 7,00,001 - Rs 10,00,000 | 20% |
| Rs 10,00,001 - Rs 20,00,000 | 30% |
| Above Rs 20,00,000 | 36% |
Presumptive Taxation
For small businesses with turnover under Rs 30 lakhs:
| Area | Annual Fee |
|---|---|
| Metro & Sub Metro | Rs 7,500/- |
| Municipality | Rs 4,000/- |
| Other Areas | Rs 2,500/- |
Corporate Tax Rates
| Business Type | Tax Rate |
|---|---|
| Normal Business | 25% |
| Schools/Colleges (Trust) | 30% |
| NGOs (Metropolitan) | 15% |
| NGOs (Municipality) | 10% |
| Foreign IT Services | 1% |
Tax Deduction Facilities
- Remote Allowance: Up to Rs 50,000 for Metro areas
- Disability: Extra 50% deduction
- Health Insurance: Up to Rs 20,000 deduction
- Endowment Policy: Up to Rs 20,000 deduction
Key Tax Acts in Nepal
- Income Tax Act, 2058 - Income tax for individuals and entities
- Value Added Tax Act, 2052 - VAT on goods and services
- Exercise Act, 2058 - Exercise duty on goods
- Customs Act, 2064 - Custom duty on imports
Need Help? Tax Services Nepal provides expert tax consultation. Contact us for free consultation.