Tax Rate In Nepal For FY 2077/78 [FY 2020-21]
June 14, 2020 | Investopaper
Yubraj Khatiwada, the finance minister of Nepal, presented the budget for the fiscal year 2077/78 [FY 2020-21] on May 28, 2020. The income tax rate in Nepal as per the new budget as well as the Fiscal Bill 2076 is shown below.
You May Also Like: Tax Changes In The Budget For Fiscal Year 2077/78
Income Tax Rate In Nepal For Individual (Unmarried)
Up to Rs 4 Lakh of Annual Income, You have to pay 1 percent income tax i.e maximum Rs. 4,000.
For Income of Rs. 4 lakhs to 5 lakhs, you have to pay 10 percent income tax for additional 1 lakh income above Rs. 4 lakh. Thus, maximum income tax is 4000+10,000 (for additional 1 lakh income)= Rs. 14,000.
For the income of Rs. 500,000 to Rs. 700,000, you have to pay 20 percent income tax for additional income above Rs. 5 lakh. Hence, your maximum total income tax becomes 14,000+40,000 (for additional 2 lakh income)= Rs. 54,000.
For Income between Rs. 700,000 and Rs. 20,00,000, you have to pay 30 percent income tax for additional income above Rs. 7 lakh. Hence, your maximum total income tax becomes 54,000+390,000 (for additional 13 lakh income)= Rs. 444,000
For those earning more than Rs 20 lakh, you have to pay income tax at the rate of 36 percent, for additional income above Rs. 20 lakh. This means that those earning Rs 25 lakh will have to pay Rs 444,000+Rs.180,000 (for additional income above Rs. 20 lakh at 36%) =Rs. 624,000
The table below shows the income tax rates in Nepal for unmarried individual.
Income Tax Rate In Nepal For Unmarried Individual
| Annual Income | Income Tax Rate (FY 2077/78) |
| Up to Rs 4,00,000 | 1% |
| Additional Rs 1,00,000 | 10% |
| Additional Rs 2,00,000 | 20% |
| Additional Rs 1,300,000 | 30% |
| Additional Tax Above Rs 2,000,000 | 36% |
Suggested Readings: Vehicle/Bike Tax Rate In Nepal 2077/78 [2020-21]
Income Tax Rate In Nepal For Married Couple
Up to Rs 4.5 Lakh of Annual Income, you have to pay 1 percent income tax i.e maximum Rs. 4,500.
For Income of Rs. 4.5 lakhs to 5.5 lakhs, you have to pay 10 percent income tax for additional 1 lakh income above Rs. 4.5 lakhs. Thus, maximum income tax is 4,500+10,000 (for additional 1 lakh income)= Rs. 14,500.
For the income of Rs. 5,50,000 to Rs. 7,50,000, you have to pay 20 percent income tax for additional income above Rs. 5.5 lakhs. Hence, your maximum total income tax becomes 14,500+40,000 (for additional 2 lakhs income)= Rs. 54,500.
For Income between Rs. 7,50,000 and Rs. 20,00,000, you have to pay 30 percent income tax for additional income above Rs. 7.5 lakh. Hence, your maximum total income tax becomes 54,500+375,000 (for additional 12.5 lakhs income)= Rs. 429,500
For those earning more than Rs 20 lakh, you have to pay income tax at the rate of 36 percent, for additional income above Rs. 20 lakh. This means that those earning Rs 25 lakh will have to pay Rs 429,500+Rs.180,000 (for additional income above Rs. 20 lakh at 36%) =Rs. 609,500.
The table below presents the income tax rates in Nepal for married couple.
Income Tax Rate In Nepal For Married Couple
| Annual Income | Tax Rate In Nepal (FY 2077/78) |
| Up to Rs 450,000 | 1% |
| For Additional Rs 100,000 | 10% |
| For Additional Rs 200,000 | 20% |
| For Additional Rs 1,250,000 | 30% |
| Additional Tax Above Rs 2,000,000 | 36% |
Tax Rate In Nepal For Non-Residents
| Source of Income | Tax Rate |
| Normal transactions | 25% |
| Through shipping, air or telecom services, postage, satellite and optical fiber project | 5% |
| Shipping, air or telecom services through the territory of Nepal | 2% |
| Repatriation of profit by Foreign Permanent Establishment | 5% |
Corporate Income Tax In Nepal
| Type of Business | Normal Tax Rate | Rebate | Applicable Tax Rate |
| Normal Business | 25% | – | 25% |
| Special Industry under section 11 for the whole year | 25% | 20% | 20% |
| Constructing and operating ropeway, cable car, railway, tunnel or sky bridge | 25% | 40% | 15% |
| Constructing and operating roads, bridges, tunnel, railway, and airports | 25% | 50% | 12.50% |
| trolley bus or trams | 25% | 40% | 15.00% |
| Entities with export income from a source in Nepal | 25% | 20% | 20% |
| Banks and financial institutions (A,B & C Class) | 30% | – | 30% |
| General Insurance (Non-Life Insurance) | 30% | – | 30% |
| Tobacco, alcohol, cigarette and related products | 30% | – | 30% |
| Telecom and Internet Services | 30% | – | 30% |
| Capital market, Securities, Merchant banking, Commodity future market, Securities & Commodity broker | 30% | – | 30% |
| Money transfer | 30% | – | 30% |
| Petroleum business under Nepal Petroleum Act, 2040 | 30% | – | 30% |
Read Related Contents:
All Income to Be Valid If Tax Of Last 2 Years Is Paid
Tax Clearance Certificate not needed for Loans up to 2 Crores
Share This Via:
Please check the tax calculation for Married couple as the 30% is calculated wrong it should be 375000 instead of 375500. But the total is correct.
Thank you.