Nepal, on 23rd May 2022, announced our new budget, and Income Tax in Nepal was revised.
The individual or personal income tax is levied on the wages, salaries, dividends, interest, and other income a person earns throughout the year.
You are liable to pay taxes to the government if you are earning or own property or vehicle | bike tax in Nepal.
Income tax in Nepal 2022/2023 | 2079/2080
The income tax rate in Nepal is different for Married couples and for those who are still unmarried. Married couples pay less compared to unmarried individuals.
Income Tax Rate In Nepal For Unmarried
The Income Tax rate in Nepal for unmarried individuals as of the 2079/2080 fiscal year starts from 1% for earnings up to NPR 5,00,000 and keeps adding as you earn more.
| Annual Income | Income Tax Rate 2022 | 2079 |
|---|---|
| First Rs 5,00,000 | 1% |
| Next Rs 2,00,000 | 10% |
| Next Rs 3,00,000 | 20% |
| Next Rs 1,000,000 | 30% |
| Above Rs 2,000,000 | 36% |
Suppose your yearly income is 7 lakhs and 25 thousand and if you have no deductibles such as social security fund, which can be deducted from taxes.
Then your taxable income in this situation is Rs 7,25,000.
- First 5,00,000, i.e. 1% – Rs 5,000.
- Next 2,00,000, i.e. 10% – Rs 20,000.
- Next 25,000, i.e. 20% – Rs 5,000. So, your total income tax will be Rs 30,000
The right way to calculate your income tax in Nepal is if you are earning more than 5 lakhs rupees. See the image below for a better understanding.
Income Tax Rate In Nepal For Married Couples
The income tax rate differs if you’re a married couple in Nepal. Married couples must pay a 1% tax on Rs 6,00,000 of earnings.
| Annual Income | Income Tax Rate 2022 | 2079 |
|---|---|
| First Rs 6,00,000 | 1% |
| Next Rs 2,00,000 | 10% |
| Next Rs 3,00,000 | 20% |
| Next Rs 1,000,000 | 30% |
| Above Rs 2,000,000 | 36% |
Let us calculate tax for a married couple in Nepal with an annual income of Rs 7,25,000 here, the payable tax amount will differ from unmarried.
- First 6,00,000, i.e. 1% – Rs 6,000.
- Next 1,25,000, i.e. 10% – Rs 12,500.
So, your total income tax will be Rs 18,500.
The image below will have proper information on how taxes for Married Individuals work.
Income Tax Rate In Nepal For Non-Residents
| Source of Income | Income Tax Rate 2022 | 2079 |
|---|---|
| Normal Transaction | 25% |
| Shipping, air or telecom services, postage, satellite, and optical fiber project | 5% |
| Shipping, air, or telecom services through the territory of Nepal. | 2% |
| Repatriation of profit by Foreign Permanent Establishment | 5% |
