Published June 10, 2026 · Updated August 14, 2026 with a full slab-by-slab comparison, worked examples, and a FAQ section.
The Federal Budget for FY 2083/84 (2026/27), presented by Finance Minister Dr. Swarnim Wagle on 15 Jestha 2083 BS, delivered the biggest personal income tax reset Nepal has seen in over a decade. If you're a salaried employee, freelancer, or business owner, here's the direct answer: the tax-free threshold doubled to NPR 10 lakh, the top rate dropped from 39% to 29%, and the separate slab tables for single and married taxpayers were merged into one. The sections below walk through exactly what changed, what it means in real numbers for different income levels, and what to double-check before you file.
What's in this guide
- The tax-free threshold doubled
- The top rate dropped from 39% to 29%
- Single and married schedules merged
- Full slab comparison: FY 2082/83 vs FY 2083/84
- Worked examples at three income levels
- Deductions still apply the same way
- How employer TDS changes under the new slabs
- What stayed the same
- Who this affects most
- How to file under the new slabs
- Common mistakes to avoid
- Frequently asked questions
The tax-free threshold doubled
The first income slab, taxed at just 1% (the social security tax), expanded from NPR 500,000 to a full NPR 1,000,000. In practice, this means anyone earning under NPR 10 lakh a year now pays income tax at the lowest possible rate on effectively all of it — a significant relief for salaried workers and small business owners alike. Under the old FY 2082/83 table, that same NPR 10 lakh of income would have been taxed across four separate bands (1%, 10%, 20%, and partly 30%), so the change isn't just a bigger tax-free amount — it flattens the early part of the curve considerably.
The top rate dropped from 39% to 29%
The highest marginal rate, previously 39% on income above NPR 50 lakh, is now 29% on income above NPR 40 lakh. That's a straight 10-percentage-point cut, and it kicks in NPR 10 lakh earlier than before. Combined, this narrows the gap between Nepal's top personal rate and those of regional peers, and it meaningfully changes the math for higher-earning professionals, senior executives, and business owners who draw a large personal salary.
Single and married schedules merged
The old system split individual and couple filers into separate slab tables — unmarried taxpayers had a NPR 500,000 first band, married taxpayers had a slightly larger NPR 600,000 first band, with the rest of the table structured similarly. That distinction is gone under FY 2083/84. One unified table now applies to every individual taxpayer regardless of marital status, which simplifies filing and removes a source of confusion that came up often — particularly for taxpayers whose marital status changed mid-year or who weren't sure which table applied to them.
Full slab comparison: FY 2082/83 vs FY 2083/84
Here's the complete picture, band by band. FY 2081/82 and FY 2082/83 use identical slabs, so the "old" column below applies to both years.
| FY 2081/82 & 2082/83 (unmarried) | FY 2081/82 & 2082/83 (married) | FY 2083/84 (unified) |
|---|---|---|
| 1% on first NPR 5,00,000 | 1% on first NPR 6,00,000 | 1% on first NPR 10,00,000 |
| 10% on next NPR 2,00,000 | 10% on next NPR 2,00,000 | 10% on next NPR 5,00,000 |
| 20% on next NPR 3,00,000 | 20% on next NPR 3,00,000 | 20% on next NPR 10,00,000 |
| 30% on next NPR 10,00,000 | 30% on next NPR 9,00,000 | 27% on next NPR 15,00,000 |
| 36% on next NPR 30,00,000 | 36% on next NPR 30,00,000 | 29% above NPR 40,00,000 |
| 39% above NPR 50,00,000 | 39% above NPR 50,00,000 | — |
You can run your own numbers — monthly or yearly salary, with SSF, EPF, CIT, and insurance deductions — using our free Nepal Salary Tax Calculator, which supports all three fiscal years side by side.
Worked examples at three income levels
Numbers are easier to trust than percentages. These three examples apply the tables above directly, ignore deductions for simplicity (see the next section for how deductions layer on top), and use the unmarried FY 2082/83 schedule for the "old" comparison since the new law no longer distinguishes by marital status.
NPR 6,00,000 annual income
Under the old FY 2082/83 table: NPR 5,00,000 at 1% (NPR 5,000) plus the remaining NPR 1,00,000 at 10% (NPR 10,000) — total tax of NPR 15,000. Under the new FY 2083/84 table, the entire NPR 6,00,000 falls inside the first NPR 10,00,000 band at 1%, for a total tax of just NPR 6,000. That's a 60% reduction in tax owed at this income level.
NPR 15,00,000 annual income
Under the old table: NPR 5,00,000 at 1% (5,000), NPR 2,00,000 at 10% (20,000), NPR 3,00,000 at 20% (60,000), and the remaining NPR 5,00,000 at 30% (1,50,000) — total NPR 2,35,000. Under the new table: NPR 10,00,000 at 1% (10,000) plus the remaining NPR 5,00,000 at 10% (50,000) — total NPR 60,000. That's roughly a 74% reduction.
NPR 50,00,000 annual income
Under the old table, working through all six bands, total tax comes to NPR 14,65,000. Under the new table: NPR 10,00,000 at 1% (10,000), NPR 5,00,000 at 10% (50,000), NPR 10,00,000 at 20% (2,00,000), NPR 15,00,000 at 27% (4,05,000), and the remaining NPR 10,00,000 at 29% (2,90,000) — total NPR 9,55,000. That's roughly a 35% reduction — smaller in percentage terms than the lower examples, but still a meaningful cut at this income level.
In every case above, the relief is largest in percentage terms for lower and middle incomes, which is the intent behind doubling the exemption threshold rather than just trimming the top rate.
Deductions still apply the same way
The slab changes don't touch how deductions work — they still come off your gross income before any of the tables above are applied. SSF, EPF, and CIT contributions combined are deductible up to the lower of NPR 5,00,000 or one-third of your total income. Life insurance premiums are deductible up to NPR 40,000, and medical insurance premiums up to NPR 20,000. If you contribute to SSF, the 1% social security portion of the first slab is waived entirely, which — combined with the new NPR 10,00,000 threshold — can make a large share of a salaried employee's income effectively tax-free. Female employees also continue to receive a 10% rebate on computed tax; under the old rules this applied specifically to unmarried female employees, but since FY 2083/84 no longer distinguishes by marital status, the rebate now applies to female employees generally.
A combined example: take an SSF-contributing employee earning NPR 12,00,000 gross, who contributes NPR 1,00,000 a year to SSF (well within the deduction cap). Taxable income after the deduction is NPR 11,00,000. Because they're an SSF contributor, the first NPR 10,00,000 band is exempt entirely rather than taxed at 1%, leaving only the remaining NPR 1,00,000 taxed at 10% — a total of NPR 10,000. Compare that to a non-SSF-contributing employee with the same NPR 12,00,000 gross and no deductions: NPR 10,00,000 at 1% (10,000) plus NPR 2,00,000 at 10% (20,000), for a total of NPR 30,000. The SSF contribution and its associated exemption together cut this employee's tax bill by two-thirds — which is why it's worth confirming your SSF status is correctly reflected before you estimate what you owe.
How employer TDS changes under the new slabs
Employers withhold income tax at source every pay cycle under the Tax Deducted at Source (TDS) system, estimating your annual tax liability under the current fiscal year's slab table and dividing it across your remaining pay periods. Because FY 2083/84 introduced new bands mid-cycle for many payroll teams still updating their systems, some employees may have seen TDS calculated under the old table for part of the year before payroll software caught up. If that happened to you, it isn't a problem in itself — TDS is a running estimate, not the final word. Any over-withholding in earlier months gets reconciled when your employer files annual TDS returns, and any shortfall is settled through your own return. If your monthly payslip still shows a materially higher deduction than the worked examples above would suggest, it's worth asking your HR or payroll provider to confirm they've updated to the FY 2083/84 table — catching this mid-year is a simple fix, while a large one-time reconciliation at year-end is a bigger surprise to budget around.
What stayed the same
Compliance deadlines haven't moved. Annual returns and tax payment are still due within three months of the fiscal year-end (end of Ashoj), extendable by a further three months to the end of Poush. A registered PAN is still mandatory to file or claim any rebate. VAT, a separate 13% consumption tax, is filed independently of income tax and wasn't affected by this particular change.
Who this affects most
The size of the benefit — and what you need to actually do about it — differs depending on how you earn.
Salaried employees between NPR 5 lakh and NPR 25 lakh annually see the largest proportional benefit, as the worked examples above show. If your income is fully covered by employer TDS and you have a single income source, you generally don't need to file a separate return — the main action item is confirming your payroll team has updated to the FY 2083/84 table so your monthly take-home reflects it.
Freelancers and consultants with no employer withholding almost always need to file directly, and should recalculate estimated tax under the new table rather than carrying forward whatever they budgeted last year — the gap between old and new liability can be substantial enough to change how much you should be setting aside per invoice.
Business owners drawing a personal salary from their own company should treat that salary the same way any other employee's income is treated under the new slabs, separately from the company's own tax obligations, which follow different rules entirely. If you also have investment income, rental income, or other income sources on top of salary, all of it factors into the same annual return.
Across all three groups, the practical takeaway is the same: don't assume last year's numbers still apply. Our accounting and tax filing service handles the recalculation and filing end to end if you'd rather not track it yourself.
How to file under the new slabs
The filing process itself hasn't changed — only the numbers going into it have.
- Confirm your PAN is active and linked to the correct taxpayer office; this is required before you can submit any return or claim a rebate.
- Gather your income statement for the fiscal year. For salaried employees, this is typically issued by your employer and shows gross pay plus TDS already withheld; for freelancers and business owners, it means totalling invoices, receipts, and any other taxable income for the year.
- Apply deductions before the slabs. SSF/EPF/CIT contributions, life and medical insurance premiums, and any other allowable deduction come off your gross income first, per the limits described above.
- Run the remaining amount through the FY 2083/84 table — either manually using the comparison table above, or with our salary tax calculator, which handles the band-by-band math for you.
- Net out tax already withheld. If your employer's TDS covered your full liability, there's typically nothing further to pay; if not, the difference is due when you file.
- File within the deadline — within three months of fiscal year-end, or up to six months with the standard extension, as noted above.
If any of this feels like more than you want to manage directly — particularly if you have multiple income sources, run a business, or are catching up on a prior year — it's usually faster to have an accountant handle the filing than to work through it manually, especially in the first year under a new slab table when the numbers everyone was used to have all shifted.
Common mistakes to avoid
- Applying the new rates to the wrong fiscal year's income. This is the single most common error we see — income earned before Shrawan 1, 2083 is still assessed under the old table, even if you're filing for it after the new slabs took effect.
- Forgetting the SSF exemption on the first slab when estimating tax, which overstates what you actually owe if you're an SSF contributor — always net out contributions before running the slab math, not after.
- Assuming the female rebate still requires "unmarried" status. That condition no longer applies from FY 2083/84 onward, so employees who previously didn't qualify because they were married may now be eligible.
- Budgeting for take-home pay using last year's slab table, which understates net salary under the new, more generous bands — worth re-running your monthly budget once payroll fully reflects the update.
- Treating the passed Finance Bill figures as final before the Act is gazetted. Use them to plan, but confirm against the gazetted Finance Act or an IRD circular before locking in a final filing position.
One thing to get right: which fiscal year applies
Income earned during FY 2082/83 (the year ending mid-July 2026) is still assessed under the old table. The new rates apply to FY 2083/84 income onward — that is, income earned from Shrawan 1, 2083. Mixing up which fiscal year's rates apply to which income is one of the most common filing mistakes we see — worth double-checking before you file.
Frequently asked questions
Do the new FY 2083/84 slabs apply to income I've already earned this year?
They apply to income earned from Shrawan 1, 2083 onward. Income earned during FY 2082/83 (ending mid-July 2026) is assessed under the old table, not the new one.
Is the FY 2083/84 slab table final, or could it still change?
These figures come from the Budget Speech of Jestha 15, 2083 and the Finance Bill 2083, passed by the National Assembly on 9 July 2026. As with any Finance Bill, treat it as authoritative but verify against the gazetted Finance Act or an IRD circular once published before relying on it for a final filing position.
Does the higher threshold mean I don't need to file a tax return?
No — the exemption threshold changes how much tax you owe, not whether you need to file. Freelancers, multiple-income earners, and business owners generally still need to file regardless of how much tax is actually due.
What happened to the separate married and unmarried tax tables?
They were merged into a single unified table for FY 2083/84. Marital status no longer changes which slab table applies.
Did the VAT rate change along with income tax?
No. VAT remains a separate 13% consumption tax, filed independently of income tax, and wasn't affected by this change.
Where can I calculate my exact tax under the new slabs?
Use our free Nepal Salary Tax Calculator — it supports FY 2081/82, 2082/83, and 2083/84 side by side, with SSF, EPF, CIT, and insurance deductions built in.
Bottom line
FY 2083/84 is a genuinely more generous tax year for most individual taxpayers in Nepal — a higher exemption threshold, a lower top rate, and one simplified table instead of two. The numbers above should give you a realistic sense of where you land, but the specific figure that matters is your own: run it through the calculator, check with your payroll team that the new table is actually applied, and confirm the fiscal year your income falls under before you file.
