Nepal's new income tax rates for 2083/84: how much will you actually save?

If you earn a salary in Nepal, the Finance Act 2083 changed how much tax comes out of your paycheck starting Shrawan 1, 2083 (July 17, 2026). Two changes matter most: the first Rs 10,00,000 of annual taxable income is now taxed at just 1%, and the top rate fell from 39% to 29%. For a Rs 1,00,000 monthly salary that works out to about Rs 1,15,000 less tax over the year.

To see your own figure, put your salary into the Nepal Income Tax Calculator and read the monthly TDS and old-vs-new savings. The rest of this post explains what changed and works through three real salary levels so you can sanity-check the result.

What changed in the Finance Act 2083

The old system had six brackets topping out at 39%. The new one keeps five brackets and a much lower ceiling. It also drops the separate rates for single filers and couples, so one schedule now applies to everyone.

Annual taxable income (Rs)	Rate
Up to 10,00,000	1%
10,00,001 to 15,00,000	10%
15,00,001 to 25,00,000	20%
25,00,001 to 40,00,000	27%
Above 40,00,000	29%

The brackets are marginal, which means each rate applies only to the income inside that band, not to your whole salary. A person earning Rs 12,00,000 pays 1% on the first 10 lakh and 10% only on the two lakh above it, not 10% on everything.

How much you save at three salary levels

Here is the tax for a plain salaried employee with no deductions, comparing the new FY 2083/84 rates against the old FY 2082/83 rates.

Rs 30,000 a month (Rs 3,60,000 a year)

New tax: Rs 3,600 a year, Rs 300 a month. Old tax: also Rs 3,600. There is no change here, because this income already sat inside the 1% band under both years. The reforms move the ceiling much higher, so the biggest wins land on larger salaries, not on entry-level pay. If you contribute to the SSF, this salary drops to zero tax.

Rs 1,00,000 a month (Rs 12,00,000 a year)

New tax: Rs 30,000 a year, about Rs 2,500 a month, an effective rate of 2.5%. Old tax: Rs 1,45,000 a year, about Rs 12,083 a month. You save roughly Rs 9,583 a month, or Rs 1,15,000 across the year. This is where the new slabs bite hardest for the middle of the salary range, because the old system pushed this income into the 20% and 30% bands that no longer exist at these levels.

Rs 4,00,000 a month (Rs 48,00,000 a year)

New tax: Rs 8,97,000 a year, about Rs 74,750 a month, an effective rate of 18.7%. Old tax: Rs 13,93,000 a year, about Rs 1,16,083 a month. You save around Rs 41,333 a month, close to Rs 4,96,000 for the year, mostly from the top rate falling ten points to 29%.

The deductions that lower your bill

Tax is charged on taxable income, which is your gross salary minus a set of allowed deductions. The main ones for FY 2083/84:

• Retirement contributions (SSF, CIT, PF, and gratuity): the lower of one-third of your assessable income or Rs 5,00,000 a year.
• Life insurance premium, up to Rs 40,000.
• Medical insurance premium, up to Rs 20,000.
• Home (building) insurance premium, up to Rs 10,000.
• Children's tuition relief (the lower of 25% of fees or Rs 25,000) and donations (up to Rs 3,00,000).
• Remote area allowance, if you work in an IRD-classified remote area: Rs 50,000 (category A) down to Rs 10,000 (category E), deducted from taxable income.
• Disabled taxpayer: an extra Rs 5,00,000 deduction (50% of the exemption limit).
• Medical tax credit: the lower of 15% of approved medical expenses or Rs 750, applied against the tax (not income).

Two rules change the tax itself rather than the income. If you are an active SSF contributor, or you have pension or proprietorship income, the whole first Rs 10,00,000 band is 0% instead of 1%. And a female taxpayer gets a 10% rebate on the final tax. The calculator applies both once you set the SSF toggle and the taxpayer profile.

Capital gains are taxed separately

Gains on listed shares are not added to your salary. They are a separate final tax: 7.5% if you held the shares 365 days or more, and 10% if you held them for less. The calculator shows this as its own line and adds it into a total tax liability, so you can see salary tax and share-gains tax without mixing the two.

How to calculate your own tax

1. Open the Nepal Income Tax Calculator and enter your salary. Keep it on "monthly" if that is how your payslip reads.
2. Set the SSF toggle and pick your taxpayer profile so the 0% band and the female rebate apply correctly.
3. Add any retirement, insurance, tuition, or donation amounts. The caps are enforced for you.
4. Read the annual tax, monthly TDS, effective rate, and the savings against the old slabs. Calculations run in your browser and your exact salary is never sent. The tool records only an anonymous salary range in aggregate.

Key takeaways

• FY 2083/84 taxes the first Rs 10,00,000 at 1% and caps the top rate at 29%, down from 39%.
• A Rs 1,00,000 monthly salary pays about Rs 30,000 a year, roughly Rs 1,15,000 less than under the old slabs.
• Entry-level salaries near Rs 30,000 a month see little change, because they were already inside the 1% band.
• SSF, pension, or proprietorship income makes the first Rs 10,00,000 band 0%, and female taxpayers get a 10% rebate.
• Share capital gains are a separate final tax at 7.5% (long term) or 10% (short term).

These figures follow the Finance Act 2083 as published and are an estimate. Confirm your exact TDS with your payroll or a registered auditor.

Remote area allowance: categories and districts

If you work in an IRD-classified remote area, you can deduct an extra amount from your taxable income. The Income Tax Rules 2059 group remote areas into five categories, and the FY 2083/84 references keep these amounts:

Category	Deduction (Rs)	Where it applies
A	50,000	The most remote full districts: Humla, Jumla, Mugu, Dolpa, Kalikot, Manang, Mustang, Bajura, Darchula.
B	40,000	Highly remote rural municipalities within districts such as Rasuwa, Sankhuwasabha, Solukhumbu, and Taplejung.
C	30,000	Full districts such as Achham, Dailekh, Jajarkot, Rukum, Baitadi, Bhojpur, Dadeldhura, Khotang, Myagdi, Okhaldhunga, Pyuthan, Rolpa, Salyan, Tehrathum, plus parts of others.
D	20,000	Full districts such as Panchthar, Dhankuta, Ramechhap, Dolakha, Gulmi, Arghakhanchi, plus parts of others.
E	10,000	Remote wards or villages inside otherwise accessible districts such as Baglung, Gorkha, Dhading, and Sindhupalchowk.

For categories B, C, D, and E, if your whole district is not listed as "complete", eligibility depends on the exact rural municipality or ward where you work. Both resident and non-resident individuals working in these areas can claim the allowance. It reduces taxable income before the tax rate applies; it is not a monthly cash payment.

Source

Finance Act 2083 (आर्थिक ऐन २०८३), Government of Nepal — published by the Ministry of Finance. Read the full Act (PDF).