A. Update
The Budget for the Fiscal Year 2080.81 i.e., Financial Year 2023-24 presented by Finance Minister in National Assembly on May 29, 2023, amends the income tax slabs for Resident Natural Individuals as under:
| Fiscal year 2079.80 | ||
|---|---|---|
| Taxable income for Single individuals | Taxable income for Married/couple individuals | Tax Rate |
| 0- 5,00,000 | 0- 6,00,000 | 1.00% |
| 500,001 - 7,00,000 | 600,001 - 8,00,000 | 10.00% |
| 7,00,001 - 10,00,000 | 8,00,001 - 11,00,000 | 20.00% |
| 10,00,001 – 20,00,000 | 11,00,001 –20,00,000 | 30.00% |
| Above 20,00,000 | Above 20,00,000 | 36.00% |
| Fiscal year 2080.81 | ||
|---|---|---|
| Taxable income for Individual | Taxable income for Married/couple individuals | Tax Rate |
| 0- 5,00,000 | 0- 6,00,000 | 1.00% |
| 500,001 - 7,00,000 | 6,00,001 - 8,00,000 | 10.00% |
| 7,00,001 - 10,00,000 | 8,00,001 - 11,00,000 | 20.00% |
| 10,00,001 – 20,00,000 | 11,00,001-20,00,000 | 30.00% |
| 20,00,001- 50,00,000 | 20,00,001-50,00,000 | 36.00% |
| Above 50,00,000 | Above 50,00,000 | 39.00% |
B. Statutory Compliance Release Date: May 29, 2023
C. Effective Date: July 17, 2023
A. Update
The Ministry of Finance, vide Finance Ordinance 2078, promulgates the following payroll related updates:
- 1. Employer and Employee contribution in Social Security Fund for the months of Jestha & Ashad 2078 (May 15,2021 to July 15, 2021) shall be borne by Government of Nepal.
The above contribution shall be considered as a taxable income in the hands of the employee and employee’s contribution shall not be deducted from employee’s salary for the above months. - 2. The House insurance premium paid by Resident Natural Person to the Resident Insurer is allowed for deduction up to a maximum amount of NPR 5,000 w.e.f. July 16, 2021.
- 3. For a Natural person receiving pension income, lower of 25% of pension income or 25% of First tax slab is exempt from tax w.e.f. July 16, 2021.
*The effective date for House Insurance premium and pension income exemption is provided below.
B. Statutory Compliance Release Date: May 28, 2021
C. Effective Date: July 16, 2021
A. Update
Deduction for contribution to Covid Relief Fund is available for the amount deposited in Central Government Fund or State Government Fund. This donation should be allowed deduction without any limit (same as under section 12 (Kha) which says any contribution made by a person during an income year in Prime Minister Relief Fund and National Reconstruction fund can be deducted while calculating taxable income for the income year of the person.
B. Statutory Compliance Release Date: April 04, 2020
C. Effective Date: FY 2076/77
A. Update
As per a notice by the Ministry of Finance, the entire contribution of 31% to SSF to be made by employees as well as employer for the month of Chaitra 2076 (March 14, 2020 to April 12, 2020) will be deposited by Government of Nepal.
B. Statutory Compliance Release Date: March 28, 2020
C. Effective Date: March 14, 2020
A. Update
The tenth amendment of Income Tax Rules, regarding allowable deduction of retirement contribution, has been published in the Nepal Gazette. Allowable deduction of retirement contribution will be the lowest of the following:
- PF Employee (10%) + PF Employer (10%) + Medical Treatment (1% Employee) + Gratuity (8.33% Employer) + Accident and disability protection scheme (1.4% Employer) + Dependent family protection scheme (0.27% Employer); or
- Rs. 500,000; or
- 1/3rd of Assessable Income.
Please find below under "Source" the Gazette and un-official English translation of the same.
