Nepal Income Tax Slab 2083/84 & Budget Highlights
📅 Last Updated: Jestha 2083 (June 2026) — Finance Act 2083
✍️ Reviewed by: NepaCalc Research Team
The Nepal FY 2083/84 budget introduced sweeping reforms across personal income tax, VAT, excise duties, and sector allocations. This guide covers the new unified income tax slabs, structural tax changes, and comprehensive budget highlights.
To calculate your exact tax, use the Income Tax Calculator Nepal.
A. Collection and Application Summary
Sources of Funds (Billion NPR)
| Source | 2083/84 | 2082/83 |
|---|---|---|
| Tax Revenue | 1405.31 (66%) | 1315.00 (67%) |
| Loans & Borrowings | 657.29 (31%) | 595.66 (30%) |
| Foreign Grant | 61.74 (3%) | 53.45 (3%) |
| Total | 2124.34 | 1964.11 |
Application of Funds (Billion NPR)
| Application | 2083/84 | 2082/83 |
|---|---|---|
| Recurring Expenditure | 1270.58 (60%) | 1180.98 (60%) |
| Capital Expenditure | 431.11 (20%) | 407.89 (21%) |
| Debt Financing | 422.65 (20%) | 375.24 (19%) |
| Total | 2124.34 | 1964.11 |
Expected Economic Growth
7.0%
(Up from 4.61% in 2082/83)
Expected Inflation
6.0%
(Up from 5.44% in 2082/83)
B. Major Budget Highlights
- Income Tax Slabs Unified: Exemption limit raised to Rs. 10,00,000 for individuals, with maximum rate reduced from 39% to 29%. Single and married slabs are unified.
- Government Restructuring: Rs. 20 Arba initial savings expected by reducing ministries from 22 to 18. 31 entities abolished, 6 merged, 6 transferred.
- Public Servant Salary Hike: Initial salary scale increased by 10%, plus a performance-based monthly allowance equivalent to 10% of revised salary (approx 21% net increase).
- VAT on Utilities & Platforms: 5% VAT levied on electricity consumption over 50 units and on ride-sharing platforms.
- E-Assessment & Audit: Tax audit period fixed at 3 years (down from 4). AI-driven e-assessment system to be developed.
- CBMS Integration: All businesses with annual transactions above Rs. 10 Crore must mandatorily link electronic invoices to CBMS.
- Customs & Excise Rationalization: Excise duty abolished on 360 goods. Customs reduced on 273 raw materials. 11 custom tiers reduced to 7.
- Capital Gains Tax: Now clarified as final withholding. Increased from 5% to 7.5% (sale < 1 year / 5 years for real estate) and 7.5% to 10% (sale > 1 year / 5 years for real estate).
New Income Tax Slabs FY 2083/84
| Annual Taxable Income (NPR) | Tax Rate |
|---|---|
| Up to Rs. 10,00,000 | 1% — Social Security Tax |
| Rs. 10,00,001 to Rs. 15,00,000 | 10% |
| Rs. 15,00,001 to Rs. 25,00,000 | 20% |
| Rs. 25,00,001 to Rs. 40,00,000 | 27% |
| Above Rs. 40,00,000 | 29% |
1% tax is waived for SSF contributors. The separate married couple threshold has been eliminated.
C. Sector Wise Summary
1. Information Technology
- Nepal’s first Sovereign AI Computer Center to be established in Syuchatar, Kathmandu.
- Special fellowship to return 15 Nepali AI researchers from abroad.
- Nagarik App upgraded with 12+ new features.
- Minimum 1% of Capital Budget strictly allocated for Science & Research.
- Government divestment in Nepal Telecom (from 91% down to 66%) to fund technology hub development.
- Digital Service Tax (DST): 2% on non-resident electronic services and data sales (Exempt if annual transactions are up to Rs. 30 Lakhs).
2. Health & Education
- Budget: Rs. 218.30 Billion (Education) & Rs. 96.43 Billion (Health).
- Education Equity Fee (3%): Levied on all private education institutes (except training).
- Health Equity Fee (3%): Levied on all private health institution service fees.
- Foreign Study Tax: 3% Education Service Fee levied by BFIs on foreign currency exchange for tuition.
- Paid internship system to be institutionalized.
- Income earned by Universities operating in Nepal via main objectives are now Exempt from Tax.
- Night duty allowance for nurses in public facilities doubled to Rs. 300/night.
3. Transportation & Ride Sharing
- Ride Sharing: 5% VAT (Reverse Charge) and 1% Advance Tax on ride-sharing platforms (Pathao, InDrive).
- Third-party vehicle insurance raised to Rs. 1 million.
- Electric Vehicle customs to be levied on ad-valorem basis (replacing peak-power-capacity system).
- New strict fines and confiscation policies for vehicles caught with smuggled/excise-evading goods.
4. Agriculture, Food & Beverages
- Rs. 32.46 Billion for fertilizer; establishment of 'Green Urea' industry.
- No tax on windfall gain income (prizes/awards) for agriculture.
- Section 11(6) broadened: Fruit cultivation, animal husbandry, fisheries, and beekeeping now qualify as agricultural businesses for exemptions.
- Electronic Track & Trace System mandated for liquor and tobacco. Penalty for non-compliance is 200% of claimed amount or Rs. 1 lakh (whichever is higher).
5. Capital Market & Real Estate
- Capital Gains Tax on securities/real estate explicitly clarified as final withholding (Sec 92).
- Exemption from capital gains when donating property to the government.
- New concessional 2.5% CGT rate for involuntary government acquisition.
Amendments in Income Tax Act
- Safe Harbor Rule (Sec 33Ka): Simplifies arm's length pricing for controlled transactions up to Rs. 1 billion. Applies for 5 consecutive years.
- Advance Pricing Agreement (Sec 33Kha): Nepal introduces APAs for the first time for transfer pricing certainty, including unilateral and bilateral APAs with a rollback facility for 4 prior years.
- Deductions: Max donation limit (Sec 12) raised to Rs. 3,00,000. New CSR deduction (Sec 12Gha) up to 1% of taxable income. Private building insurance limit doubled to Rs. 10,000.
- Tuition Deduction: Resident natural persons can deduct 25% of annual tuition paid to a resident person (max Rs. 25,000/year).
- Cash Limits: Expenses paid in cash exceeding Rs. 25,000 are non-deductible (applicable to all persons, overriding the old 50k limit).
- TDS Changes: 20% TDS on insurance agents (up from 15%). 1.5% TDS on consumer committees (exceeding 50 Lakhs) repealed.
- Refund Claim Window: Extended from 2 years to 5 years (Sec 113(4)).
Amendments in Value Added Tax (VAT)
- Digital Payment Rebate: Consumers making digital payments on notified goods/services get a 10% instant rebate at the invoice point.
- Digital Invoices (CBMS): Department can mandate designated taxpayers to use CBMS. Fine of Rs. 5 Lakh for tampering with invoicing software.
- Fines: General violation fine increased from Rs. 1,000 to Rs. 10,000. New Rs. 50,000 fine for unauthorized internal transfer of commercial goods.
Tax Reliefs & Concessions
- Gen-Z Movement Damages: Uninsured stock destroyed during protests can be claimed as COGS without losing input VAT. 50% duty exemption for importing goods to restore damaged businesses. Destroyed excise stamps can be written off.
- Shipping Containers: Held containers can be released without demurrage fees if applied by Mangsir 2083.
- PAN Regularisation: Persons getting a PAN and filing FY 2079/80-2082/83 get full waiver of all fees/interest for earlier years.
- Outstanding Taxes: Self-assessed or IRD-assessed outstanding VAT, income tax, or excise as of 15 Jestha 2083 can be settled by paying principal + 1% by Poush 2083 (full waiver of penalties/interest).
- Bank Guarantees: Bonded warehouse industries failing to export can get guarantees released by exporting finished products by Mangsir 2083.