Nepal's new tax slabs for FY 2083/84: what changed, and what it saves you

What changed in Nepal's tax slabs for FY 2083/84?

Three things moved at once: six bands became five, the 1% band doubled from NPR 5,00,000 to NPR 10,00,000, and the top rate fell from 39% to 29%. A fourth change is quieter — the separate schedule for married filers was deleted, so one table now covers everyone.

Read the middle column and the reason for the noise becomes obvious: income between NPR 5,00,000 and 10,00,000 used to be taxed at 10% and 20%. It is now inside the 1% band. That single stretch is where most salaried Nepalis live. The full band tables for all three years, single and couple, are on the tax slabs page.

How much tax does the new schedule actually save?

At a gross salary of NPR 1,00,000 a month with no retirement fund, the annual tax falls from NPR 1,45,000 to NPR 30,000 — a saving of NPR 1,15,000 a year, or about NPR 9,583 a month in hand. The saving grows with salary, because the deleted 36% and 39% bands sat at the top.

The first row is not a mistake: below NPR 5,00,000 of income both years charge the same 1%, so nothing changed at the bottom of the table. The figures assume the simplest case — twelve months of salary, no PF or SSF, no insurance premium claimed — so the bands are the only thing doing the work. Add a retirement fund and both columns fall further; the gap between them stays roughly the same.

Do married couples still get a wider first band?

Until FY 2082/83, a married filer's first band ran to NPR 6,00,000 instead of 5,00,000. FY 2083/84 removed the couple table entirely, so marital status no longer changes the tax. Nobody pays more than last year because of it — the wider bands swallow the loss — but the old planning trick of filing as a couple is finished.

If your HR team still asks for marital status on the tax declaration form, it is now for records, not for rate selection. Any payroll system that still applies a couple table to FY 2083/84 is computing the wrong tax — worth a polite question if your TDS looks off.

Is the 1% band income tax, and who skips it?

The 1% on the first NPR 10,00,000 is the Social Security Tax, not ordinary income tax. It goes to a separate government account. If your employer contributes to the Social Security Fund, you do not pay it at all — your 11% SSF contribution already covers the same obligation. Provident Fund members still pay it.

The waiver is worth up to NPR 10,000 a year now that the band is twice as wide. It is applied automatically for SSF members in the salary tax calculator, and you can see it struck through in the band table there.

• SSF member: the 1% band is waived. Tax starts at the 10% band.
• PF member or no fund: the 1% applies to the first NPR 10,00,000 of taxable income.
• Either way: it is capped at what the band holds, so it never exceeds NPR 10,000 a year.

What did not change in FY 2083/84?

The relief ceilings are untouched: retirement contributions to PF, SSF and CIT share one limit of NPR 5,00,000 or one-third of assessable income, whichever is lower; life insurance premiums are deductible up to NPR 40,000 a year; health insurance up to NPR 20,000; and a resident woman with only employment income still gets a 10% rebate on the tax computed.

Also unchanged: tax is assessed on the year, not the month, and your employer's PF or SSF contribution counts as your income before it is relieved again. Both of those catch people out far more often than the rates do — the guide to how salary tax works walks through the order the Act applies them in, and the FAQ answers the short versions.

Which payslip do the new slabs start on?

FY 2083/84 runs from Shrawan 1, 2083 (mid-July 2026) to Ashad end, 2084. The new bands apply to income of that year — so the first payslip affected is Shrawan 2083, not the month the budget was announced. Income earned in Ashad 2083 is still taxed under FY 2082/83 rules.