Nepal Salary Tax for FY 2083/84: New Slabs, Deductions and a Worked Example
How salary tax works in Nepal for FY 2083/84: the new slabs from the Finance Act 2083, the deductions you can claim, and a worked example.
“In this world nothing can be said to be certain, except death and taxes.” — Benjamin Franklin, who never saw Nepal’s FY 2083/84 tax table
The Finance Act 2083 rewrote Nepal’s salary tax. From Shrawan 1, 2083 (mid-July 2026), the first Rs. 10 lakh is taxed at just 1%, the top rate falls from 39% to 29%, and individuals and couples use the same table. Every salaried taxpayer pays less than last year, and many pay a lot less.
This post covers what changed, how your tax is worked out, and a full example you can check against your own payslip.
🧾 What Changed in FY 2083/84
The new tax table
| Net assessable income (Rs.) | Rate |
|---|---|
| Up to 10,00,000 | 1% |
| 10,00,000 – 15,00,000 | 10% |
| 15,00,000 – 25,00,000 | 20% |
| 25,00,000 – 40,00,000 | 27% |
| Above 40,00,000 | 29% |
What it replaced (FY 2082/83, filing as an individual)
| Net assessable income (Rs.) | Rate |
|---|---|
| Up to 5,00,000 | 1% |
| 5,00,000 – 7,00,000 | 10% |
| 7,00,000 – 10,00,000 | 20% |
| 10,00,000 – 20,00,000 | 30% |
| 20,00,000 – 50,00,000 | 36% |
| Above 50,00,000 | 39% |
Couples used to have their own table, starting at Rs. 6 lakh. That’s gone: from FY 2083/84 everyone uses the table above.
Two new deductions for salaried people
- House insurance: the premium you can deduct goes up from Rs. 5,000 to Rs. 10,000.
- Children’s tuition fees: new. You can deduct 25% of the school fees you pay, up to Rs. 25,000.
🔢 How Your Salary Tax Is Worked Out
graph TD
A[Total income: salary, allowances, bonus] --> B[Minus deductions: SSF, EPF, CIT, insurance, tuition]
B --> C[Net assessable income]
C --> D[Apply the slabs, one slice at a time]
D --> E[Minus the SSF waiver or women's rebate, if they apply]
E --> F[Your annual tax]
1. Add up your total income. Salary, allowances and bonuses for the year, including your Dashain allowance.
2. Subtract your deductions. Each one has a limit:
| Deduction | You can deduct up to |
|---|---|
| SSF, EPF and CIT contributions (combined) | Rs. 5,00,000 or one-third of your total income, whichever is lower |
| Life insurance premium | Rs. 40,000 |
| Health insurance premium | Rs. 20,000 |
| House insurance premium | Rs. 10,000 (new limit) |
| Children’s tuition fees | 25% of fees paid, up to Rs. 25,000 (new) |
3. Apply the slabs. What’s left is your net assessable income. Each rate applies only to the slice of income inside its slab, so earning one rupee more never pushes your whole income into a higher rate.
4. Check the SSF waiver. The 1% on the first slab is the social security tax. If you contribute to the Social Security Fund (SSF), it’s waived.
5. Check the women’s rebate. A resident woman whose only income is from employment gets 10% off her total tax. It doesn’t apply when filing as a couple.
Employers deduct salary tax every month as TDS, so payroll should have moved to the new table from Shrawan. If your monthly deduction didn’t change, it’s worth asking your HR or payroll team.
🧮 A Worked Example
Say you’re single, earn Rs. 1,40,000 a month (Rs. 16,80,000 a year) and get a Rs. 1,20,000 Dashain bonus. During the year you also:
- put Rs. 3,00,000 into the Citizen Investment Trust (CIT)
- pay Rs. 50,000 in life insurance premiums and Rs. 15,000 for health insurance
- pay Rs. 80,000 in school fees for your child
Total income: 16,80,000 + 1,20,000 = Rs. 18,00,000
Deductions:
| Deduction | Paid (Rs.) | Allowed (Rs.) | Why |
|---|---|---|---|
| CIT | 3,00,000 | 3,00,000 | Under both limits (Rs. 5 lakh, and one-third of income = Rs. 6 lakh) |
| Life insurance | 50,000 | 40,000 | Capped at Rs. 40,000 |
| Health insurance | 15,000 | 15,000 | Under the Rs. 20,000 cap |
| Children’s tuition fees | 80,000 | 20,000 | 25% of fees paid |
| Total | 3,75,000 |
Net assessable income: 18,00,000 − 3,75,000 = Rs. 14,25,000
Tax by slab:
| Slab (Rs.) | Income in slab (Rs.) | Rate | Tax (Rs.) |
|---|---|---|---|
| Up to 10,00,000 | 10,00,000 | 1% | 10,000 |
| 10,00,000 – 15,00,000 | 4,25,000 | 10% | 42,500 |
| Total | 14,25,000 | 52,500 |
That’s Rs. 52,500 for the year, about Rs. 4,375 a month, or 2.92% of your total income.
Under last year’s rules, the same person would have paid Rs. 2,18,500. There was no tuition deduction, and the old slabs reached 30% by Rs. 10 lakh. The new table saves this person Rs. 1,66,000 a year.
Two variations on the same example:
- SSF instead of CIT: with the same Rs. 3,00,000 going into the SSF, the 1% on the first slab is waived and the tax falls to Rs. 42,500.
- A woman with only employment income: the 10% rebate brings the tax to Rs. 47,250.
Try it: Nepal Salary Tax Calculator — put in your own salary and deductions to see your tax slab by slab, for FY 2080/81 to 2083/84.
⚠️ What This Doesn’t Cover
This post is about employment income of a resident individual. It leaves out the remote-area allowance, pension and disability deductions, the medical tax credit, donations, and income from business, rent or investments. Treat the numbers here as an estimate, not tax advice, and check your payslip and the Inland Revenue Department (IRD) before relying on them.
📚 Sources
- Finance Act 2083, published in the Nepal Gazette on 2083/03/30 (IRD)
- Finance Act 2083: information booklet on tax exemptions, concessions and other provisions, revised edition (IRD)
Same salary, smaller tax bill. Worth a second look at your payslip this month. 💰