The short version:
Budget 2083/84 rewrote personal income tax in Nepal: the 1% slab now covers income up to Rs 10 lakh, the top rate falls from 39% to 29%, and single people and couples use the same slabs. The changes apply from Shrawan 1, 2083 (17 July 2026).
The headline changes
- The tax-free-style 1% slab doubles to Rs 10 lakh.
- The maximum personal rate falls by ten percentage points, from 39% to 29%.
- The separate couple slab is removed.
- Presented on 15 Jestha 2083 (29 May 2026), effective from Shrawan 1, 2083 (17 July 2026).
New income tax slabs (FY 2083/84)
| Annual taxable income | Rate |
|---|---|
| Up to Rs 10,00,000 | 1% |
| Rs 10,00,001 – 15,00,000 | 10% |
| Rs 15,00,001 – 25,00,000 | 20% |
| Rs 25,00,001 – 40,00,000 | 27% |
| Above Rs 40,00,000 | 27% + 2% surcharge |
Old slabs (FY 2082/83)
Single person
| Annual taxable income | Rate |
|---|---|
| Up to Rs 5,00,000 | 1% |
| Rs 5,00,001 – 7,00,000 | 10% |
| Rs 7,00,001 – 10,00,000 | 20% |
| Rs 10,00,001 – 20,00,000 | 30% |
| Rs 20,00,001 – 50,00,000 | 30% + 20% surcharge |
| Above Rs 50,00,000 | 30% + 30% surcharge |
Couple
| Annual taxable income | Rate |
|---|---|
| Up to Rs 6,00,000 | 1% |
| Rs 6,00,001 – 8,00,000 | 10% |
| Rs 8,00,001 – 11,00,000 | 20% |
| Rs 11,00,001 – 20,00,000 | 30% |
| Rs 20,00,001 – 50,00,000 | 30% + 20% surcharge |
| Above Rs 50,00,000 | 30% + 30% surcharge |
In both years, the 1% is not charged on pension income, SSF or pension-fund contributors, or sole proprietorship income.
What it means for you
| Taxable income | FY 2082/83 (single) | FY 2083/84 | Saving |
|---|---|---|---|
| Rs 6,00,000 | Rs 15,000 | Rs 6,000 | Rs 9,000 |
| Rs 12,00,000 | Rs 1,45,000 | Rs 30,000 | Rs 1,15,000 |
| Rs 18,00,000 | Rs 3,25,000 | Rs 1,20,000 | Rs 2,05,000 |
| Rs 30,00,000 | Rs 7,45,000 | Rs 3,95,000 | Rs 3,50,000 |
Examples assume the 1% applies and no deductions. The 2082/83 figure above Rs 20 lakh uses 36% (30% plus a 20% surcharge on the tax).
Other income tax changes
- Building insurance deduction: up to Rs 10,000 (was Rs 5,000).
- Donation deduction: up to the lower of Rs 3,00,000 (was Rs 1,00,000) or 5% of adjusted taxable income.
- CSR expenses: deductible up to 1% of taxable income — a new provision.
- Cash payments: no single cash payment above Rs 25,000, for everyone — see the new cash payment limit.
- Deposit interest: the Rs 25,000 exemption for interest from microfinance, rural development banks, postal savings banks and qualifying cooperatives is clarified — interest above Rs 25,000 is taxed.
- IT services: a 50% income tax exemption on income from exporting IT services, and sweat shares received by IT employees are exempt.
- Insurance agents: TDS on commission paid to resident individual agents rises to 20% (from 15%).
- Ride-sharing: resident platforms collect 1% advance tax on payments to individual drivers.
- Assessment period shortened from 4 years to 3; refund claims can be made within 5 years instead of 2.
- E-invoice software: a Rs 5,00,000 charge for using invoicing software that can delete or change invoice data.
What to do now
- Check your salary slip from Shrawan 2083 — withholding should follow the new slabs. See remuneration tax in Nepal.
- If you have unfiled returns or unpaid tax, look at the settlement schemes that close at the end of Poush 2083.
- Businesses: stop cash payments above Rs 25,000 and make sure your invoicing software can't edit issued invoices.
For the full picture, read income tax in Nepal.
Sources
- Institute of Chartered Accountants of Nepal (ICAN), Highlights of Federal Budget of Nepal FY 2083/84 — amendments to the Income Tax Act, 2058 and the Value Added Tax Act, 2052.
- Inland Revenue Department, ird.gov.np — Acts, rules, notices and the taxpayer portal.
Last checked: 15 September 2026 (Bhadra 30, 2083). Tax law changes with each Finance Act — confirm your own situation with the Inland Revenue Department or a registered tax professional.