Annual Income Tax in 2080/81 in Nepal

Annual Income Tax in Nepal

The Annual Budget of Nepal for the Fiscal Year 2080-81 brought Significant Changes in the Income Tax Act and the provisions for Taxing the Income of Individuals residing in Nepal.

The Annual Income Tax for Individuals earning more than NPR 5 Crores has been increased to 39% as it was 36% previously.

The following are the important changes, new provisions, and amendments brought into the Annual Income Tax of Nepal.

Current Income Tax in Nepal 2080/81

Single Income Tax

1. For Income up to NPR 5,00,000, the Income Tax Rate is set at 1%.
2. For Income more than NPR 5,00,000 to NPR 7,00,000, the Income Tax Rate is set at 10%.
3. For Income more than NPR 7,00,000 to 10,00,000, the Income Tax Rate is set at 20%.
4. For Income more than NPR 10,00,000 to NPR 20,00,000, the Income Tax Rate is set at 30%.
5. For Income more than NPR 20,00,000 to NPR 50,00,000, the Income Tax Rate is set at 36%.
6. For Income more than NPR 50,00,000, the Income Tax has been increased to 39%.

Couple Income Tax

1. For Couples with Income up to NPR 6,00,000, the Income Tax Rate is set at 1%.
2. For Couples with Income more than NPR 6,00,000 to NPR 8,00,000, the Income Tax Rate is set at 10%.
3. For Couples with Income more than NPR 8,00,000 to 11,00,000, the Income Tax Rate is set at 20%.
4. For Couples with Income more than NPR 11,00,000 to NPR 20,00,000, the Income Tax Rate is set at 30%.
5. For Couples with Income more than NPR 20,00,000 to NPR 50,00,000, the Income Tax Rate is set at 36%.
6. For Couples with Income more than NPR 50,00,000, the Income Tax has been increased to 39%.

Changes in Annual Income Tax Rate in Nepal 2080/81

Any Nepalese who visits a Foreign Country must pay 5% of the Package Amount to the Government of Nepal which must be collected by the Tour Package Provider or Organizer.

Individuals working in Remote Areas of Nepal can get a deduction of up to NPR 50,000 from their Taxable Income.

Natural Person lacking capacity get an additional 50% deduction from their Taxable Income.

An Income Tax Rate of 5% is levied on Individuals in Nepal receiving Payment in Foreign Currency for transacting Electronic Services such as Software, Apps, and Programs outside Nepal.

For Individuals receiving Foreign Payments in Nepal for providing Consultancy Services outside Nepal, their Income Tax Rate is levied at 5% including their Property. Filing D01 Income Tax Returns must be conducted at the Inland Revenue Department.

Moreover, if Individuals are receiving Payment in Foreign Currency for uploading or dealing with Audio-Visual Materials in Social Networks, they are required to pay 5% Income Tax.

The New Income Tax Act has provided only a 50% Rebate on Applicable Taxes on the incomes generated from Business, Vegetable Dehydration, Cold Storage, etc. Previously the Rebate on Applicable Taxes on these Professions was 100%.

For Services such as Carriage or Vehicle in Rent, 1 and a half Percent Tax is exempted if the Business is registered under VAT.

Digital Service Tax is levied in Nepal at the Rate of 2% of the value of transaction of the digital services by NR Person to Resident Person if the transaction crosses NPR 2 Million. Further, Individuals involved in Digital Services must submit their transactions to the Government of Nepal.

Taxation Arrangements for Natural Persons in Nepal have been changing and continuously increasing. Further, the Fiscal Year 2023/24 2080/81 Nepal has increased Annual Income Tax as well.

How much is income tax in Nepal?

The Income Tax rates in Nepal for the fiscal year 2080-81 are structured as follows:

1. For Single Income Tax: Up to NPR 5,00,000: 1%
2. For Couple Income Tax: Up to NPR 6,00,000: 1%

What is the Tax Rate for 2080 81?

The Updated Tax Rate for 2080 81 Fiscal Year in Nepal is set at 1% of Total Income for upto NPR 5,00,000 and for Couple NPR 6,00,000.

What is the finance bill 2080 in Nepal?

The Finance Bill 2080 announced new updates on Annual Income Tax of Nepal. According to the Bill, an Income Tax of 5% was levied for individuals earning through digital and electronic means such as Internet and Social Medias.

What is Tax Slab in Nepal 2080/81 for Singles?

The Tax Slab in Nepal 2080/81 for Singles are: For income up to NPR 5,00,000, the rate is 1%, for income between NPR 5,00,000 to NPR 7,00,000, it is 10%, for income between NPR 7,00,000 to 10,00,000, it is 20%, for income between NPR 10,00,000 to NPR 20,00,000, it is 30%, for income between NPR 20,00,000 to NPR 50,00,000, it is 36%, and for income exceeding NPR 50,00,000, it has increased to 39%.

What is Tax Slab in Nepal 2080/81 for Couples?

For Couple Income Tax, the rates are structured as follows: For couples with income up to NPR 6,00,000, the rate is 1%, for income between NPR 6,00,000 to NPR 8,00,000, it is 10%, for income between NPR 8,00,000 to 11,00,000, it is 20%, for income between NPR 11,00,000 to NPR 20,00,000, it is 30%, for income between NPR 20,00,000 to NPR 50,00,000, it is 36%, and for income exceeding NPR 50,00,000, it has increased to 39%.