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, three changes matter to you directly.
The tax-free threshold doubled
The first income slab, taxed at just 1%, 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.
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, narrowing the gap between Nepal's top rate and those of regional peers.
Single and married schedules merged
The old system split individual and couple filers into separate slab tables (NPR 500,000 vs. 600,000 first bands). That distinction is gone. One unified table now applies to every individual taxpayer, which simplifies filing and removes a common source of confusion.
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
Salaried employees between NPR 5 lakh and NPR 25 lakh annually see the largest proportional benefit. 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 business owners still must file — our accounting and tax filing service handles this end to end if you'd rather not track it yourself, and should recalculate their estimated liability under the new table rather than assuming last year's numbers still apply.
One thing to get right
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. 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.
