Nepal Income Tax Slabs FY 2083/84: New Rates & Changes

For the first time in years, Nepal's salaried earners are getting a real tax cut — the Budget 2083/84 doubled the lowest slab to NPR 10 lakh and slashed the top rate by 10 percentage points.

Presented by Finance Minister Dr. Swarnim Wagle on 15 Jestha 2083 (29 May 2026), the FY 2083/84 (2026/27) budget rewrote the personal income tax table: it merged the separate single and couple schedules into one, raised the first 1% band from NPR 500,000 to NPR 1,000,000, and cut the maximum rate from 39% to 29%.

This guide lays out the new slabs in full, compares them with FY 2082/83, and flags exactly what is confirmed versus still pending the Finance Act 2083.

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What Changed in the Budget 2083/84

The headline of the FY 2083/84 budget for ordinary taxpayers is relief. Under the theme of easing the tax burden and expanding the middle class, the government announced three structural changes to personal income tax:

• The first 1% slab doubled — from NPR 500,000 to NPR 1,000,000. Far more of your income is now taxed at just 1%.
• The top rate fell from 39% to 29% — a straight 10-percentage-point cut on the highest band.
• Single and couple schedules merged — the long-standing split (NPR 500,000 vs 600,000 first band) is gone; one table now applies to everyone.

The budget also made capital gains tax on listed-share sales a final tax, relaxed Income Tax Act Section 57 for ownership changes after death, and introduced a 10% VAT discount on purchases paid through digital channels. But the slab overhaul is what most salaried and self-employed Nepalis will feel.

Nepal Income Tax Slabs for FY 2083/84

Nepal uses a progressive system: only the income that falls inside each band is taxed at that band's rate — not your whole income at the top rate. Here is the new unified table for resident individuals.

The 29% top rate is structured as 27% plus a 2% surcharge on income above NPR 4,000,000. Unlike previous years, there is now a single schedule — married couples no longer get a separate higher first band, because the first band is already NPR 10 lakh for everyone.

Key takeaway: A salaried person earning NPR 10 lakh a year now pays just 1% on that income — where the same earner previously crossed into the 10%, 20% and 30% bands.

FY 2082/83 vs FY 2083/84 — Side-by-Side Comparison

The contrast with the outgoing year (FY 2082/83, 2025/26) shows how significant the change is. The old table had six bands topping out at 39%, with different first slabs for single and married filers.

For reference, the full FY 2082/83 single-filer table was: 1% on the first NPR 500,000, 10% on the next 200,000, 20% on the next 300,000, 30% on the next 1,000,000, 36% on the next 3,000,000, and 39% above NPR 5,000,000 (couples used a 600,000 first band). For a deeper walk-through of the outgoing year, see our complete Nepal income tax guide.

Is the First NPR 10 Lakh Tax-Free?

No — and this is the most common misreading of the budget. The first NPR 1,000,000 is taxed at the 1% Social Security Tax (SST), not at zero. What the budget did was move far more income into that low 1% band, not exempt it entirely.

The 1% SST is waived for individuals who contribute to the Social Security Fund (SSF) or an approved retirement/pension fund, since those contributions already meet the same social-security purpose. So an SSF-enrolled employee effectively pays no tax on the first NPR 10 lakh, while a non-contributor pays 1%.

How Much Will You Save?

Consider a salaried employee with NPR 1,500,000 in annual taxable income, filing as a single person and not enrolled in SSF.

• Under FY 2082/83: 1% on 500,000 + 10% on 200,000 + 20% on 300,000 + 30% on 500,000 = NPR 5,000 + 20,000 + 60,000 + 150,000 = NPR 235,000.
• Under FY 2083/84: 1% on 1,000,000 + 10% on 500,000 = NPR 10,000 + 50,000 = NPR 60,000.

That is a reduction of roughly NPR 175,000 for this earner — a dramatic cut driven mostly by the widened 1% band. You can model your own figure with our Nepal salary tax calculator, which has been updated for the FY 2083/84 budget.

Personal Tax Rules That Continue (Pending Finance Act 2083)

The budget reworked the slabs but did not announce changes to several long-standing personal-tax provisions. Unless the final Finance Act 2083 says otherwise, the following carry forward from FY 2082/83:

• Female taxpayer rebate — a 10% rebate on the computed tax liability for a resident woman earning only from employment in Nepal.
• Freelancer / IT export tax — a flat 5% final withholding tax on convertible foreign-currency income from exporting IT, software, or consultancy services, collected by the bank on a PAN-linked account, final up to an annual ceiling of NPR 4,000,000 (40 lakh). Nepal also grants a 75% income-tax rebate on IT-service export income.
• Deductions — retirement-fund contributions (up to the lower of one-third of income or NPR 500,000), life insurance premiums (up to NPR 40,000), health insurance premiums (up to NPR 20,000), and remote-area allowances based on location.
• Non-resident individuals — taxed at a flat 25% on Nepal-sourced income.

Because these were not restated in the budget speech, confirm them against the gazetted Finance Act 2083 before relying on them for the new year.

When Do the New Slabs Take Effect?

Nepal's fiscal year runs from 1 Shrawan to the end of Ashadh (roughly mid-July to mid-July). FY 2083/84 begins on 1 Shrawan 2083 (about 17 July 2026), and the new slabs apply to income earned from that date once the Finance Act 2083 is passed.

Income you earned during FY 2082/83 (the year ending mid-July 2026) is still assessed under the old 39%-top table. The new 29%-top table applies to FY 2083/84 income.

Filing, PAN, and Deadlines

The slab change does not alter the compliance calendar. A registered PAN remains mandatory to file a return or claim any rebate. Annual returns and tax payment are due within three months of the fiscal year-end (end of Ashoj), extendable by a further three months to the end of Poush.

If your income is fully covered by employer TDS and you have a single income source, you may not need to file separately — but freelancers, multiple-income earners, and businesses must file. Income tax and VAT (a separate 13% consumption tax) are filed independently.

Conclusion

The FY 2083/84 budget delivers Nepal's most taxpayer-friendly personal income tax table in years — a NPR 10 lakh first band at 1%, a single unified schedule, and a top rate cut to 29%. The one caution is timing: these are budget figures that become binding only with the Finance Act 2083, so verify before filing for the new year.

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Reviewed by: The Legal Team at Notary Nepal — Nepal Bar Council registered advocates

Last reviewed: June 2026