Tax Rate in Nepal for Fiscal Year 2078-2079 (2021-22)

Government of Nepal, Ministry of Finance, Inland Revenue Department, the Tax rate applicable for natural persons (for the income year 2078/79): In the case of taxpayers registered as a sole proprietorship, one percent tax will not be levied on the income from retirement, pension fund, and natural person contributing to the contribution-based social security fund.

Subsections (1) and (2) of Section 1 of Schedule 1

Income Tax Rate In Nepal For Individual (Unmarried):

Income Tax Rate In Nepal For Married Couple:

Tax Rate In Nepal For Non-Residents:

Corporate Income Tax In Nepal:

Amount not included in natural person's income or exemption in expenses:

1) Remote Allowance Facility:

 Amount to be deducted from the taxable income of a natural person working in a remote area: -

• In the area of ​​the “A” category, Rs. 50,000 (fifty thousand)
• In the “B” class area, Rs. 40,000 (forty thousand)
• In the area of ​​the “C” category, Rs. 30,000 (thirty thousand)
• In the “D” class area, Rs. 20,000 (Twenty Thousand)
• In the “E” class area, Rs. 10,000 (Ten Thousand)

2) Exemption facility in foreign allowance:

Seventy-five percent of the foreign allowance received by the employees working in Nepal's diplomatic missions abroad can be deducted from the taxable income.

3) Exemption facility available to a person with retirement income:

If the resident is a natural person's retirement income, such person will be allowed to deduct twenty-five percent from the taxable income limit.

4) Exemption facility for persons with disabilities:

If the resident is a natural person with a disability, such person will be allowed to deduct an additional fifty percent from the taxable income limit.

5) Investment insurance exemption facility:

If the resident natural person has insured the investment, the amount deducted from the annual premium of Rs. 25,000 paid for such insurance can be deducted from the taxable income.

6) Premium paid for health insurance:

If the resident natural person has health insurance with the resident insurance company, the amount deducted from the annual premium paid for such insurance or Rs. 20,000 can be deducted from the taxable income.

7) Premium paid for insurance of private building owned by you:

If the resident natural person has insured the private building owned by the resident insurance company, the annual premium paid for such insurance or the amount which is less than five thousand rupees can be deducted from the taxable income.

8) Tax exemption for women with only wage income

If a resident is a natural person earning only wage income, then the exemption will be ten percent of the tax amount to be paid by such a natural person.

Presumptive Tax: D-01 For submitting income statement:

The taxable income received by the resident natural person from the business will be Rs. 300,000 and the business turnover will not be more than Rs. 3 million annually. Subsection (4) of Section 4 of the Income Tax Act 2018

Taxes based on transactions (1 Pa 1049. '195): 1) -02 For submitting income statement:

 In the case of taxpayers who have only income from business with natural resources in Nepal, taxable income from the business is less than Rs. 1 million and business turnover is more than Rs. 3 million less than Rs. (A) and (b) Ba (a), (b), and (c) should be filed as per the sum. Income Tax Act; Sub-section (a) of section 4 of section 2048 (a)

In transactions up to three million rupees:

Clause (b) - In transactions above Rs. 3 million to Rs. 5 million

Section (c) - In transactions of more than Rs. 50 lakhs to Rs. 10 million

Sub-section (1a) of Section 94 of the Act provides that a person who pays Turnover Tax (TOT) on the basis of turnover has to file tax in two installments as follows.