Nepal Tax Rate for the 2074/75 (2017/18) (Natural Person) Couple and Individual

Updated Income Tax rates in Nepal for 2074/2075 (Individual and Couple).

No change has been made in the tax rate in fiscal year 2074/75. Below is the applicable tax rate as per Finance Bill 2073/74.

The tax threshold for Fiscal year 2073/74 is increased as per the Budget speech. Tax rates for resident person non-resident person.

A. Income Tax Rates of Nepal For Resident Person

There has been a change in the Income Tax Rates applicable to the Resident Person from the Budget this year. Slab Rate has been increased by 100,000 for Tax payers assessed as Individual/couple. Details of the same has been provided below.

 

  Particulars   FY 2072/73   FY 2073/74  
                       
    Rs.     Tax Rate Rs.         Tax Rate  
    Assessed as Individual              
  First Tax slab 250,000     1% 350,000     1%  
  Next 100,000   15% 100,000         15%  
                 
  Balance Exceeding 350,000     25% 450,000         25%  
    Assessed as Couple              
             
  First Tax Slab 300000     1% 400,000     1%  
  Next 100,000     15% 100,000     15%  
                     
  Balance Exceeding 400000     25% 500,000     25%  
    In case the Taxable Salary of an Individual is more than Rs. 25 Lakhs,  
    additional  tax  at  the  rate  of  40  percent  shall  be  levied  on  the  tax  
    applicable on the income above Rs. 25,00,000 (i.e. Above Rs. 25,00,000,  
    Tax Rate of 35% is applicable).              

Notes:

1. Natural person working at remote areas are entitled to get deduction from taxable income to a maximum of Rs. 50000.

2. Natural person with pension income included in the taxable income shall be entitled to deduct from taxable income an additional 25% of amount prescribed under first tax slab.

3. Incapacitated natural person shall be entitled to get deduction from taxable income an additional 50% of amount prescribed under first tax slab.

4. A Resident natural person who has procured life insurance and paid premium amount thereon shall be entitled to a deduction of actual annual insurance premium or Rs. 20000 whichever is less from gross taxable income.

5. A Resident natural person who has procured Health Insurance and paid premium amount thereon shall be entitled to a deduction of actual annual insurance premium or Rs. 20,000 whichever is less from gross taxable income.

6. In case of the employee employed at the foreign diplomatic of Nepal only 25% of the foreign allowances are to be included in the income from salary.

7. In case of the employee posted outside Nepal is getting foreign allowance will get 75% rebate of such allowance.

8. In case of the female employee whose taxable income is only from employment than 10% rebate is allowed on tax liability.

9. In case of individual having income from export, tax rate of 15% is applicable in place of 25%.

10. The limit of 7% of Depreciable Base is not applicable on the repair and improvement expenses incurred for assets located at earthquake affected areas prescribed by GON, in case the person desires to apply this provision. This facility is allowed until FY 2073/74.

11. Productive industries, except tobacco and alcohol industries are eligible to get 50% discount on land registration fee.

12. Special Industries related with manufacturing, tourist services, electricity production and distribution listed on NEPSE and industries mentioned on section 11(3ga) shall be provided with concession of 15% on applicable tax rate. This budget has included Agricultural, Forestry and Mineral Industries also in to the category of Special Industries.

B. Income Tax Rates in Nepal For Non-Resident Person

S. N. Nature of transaction FY 2072/73 FY 2073/74
       
1 Income earned from normal transactions. 25% flat rate 25% flat rate
       
a. Income  earned  from  providing  shipping,  air  transport  or 5% 5%
  telecommunication  services,  postage,  satellite,  optical  fiber    
  project.    
b. Income   earned   providing   shipping,   air   transport   of 2% 2%
  Telecommunication services through the territory of Nepal.    
       
c. Repatriation by Foreign Permanent Establishment. 5% 5%
       


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