Nepal Budget 2083/84: Highlights, Summary, Tax Changes & Key Allocations

Nepal Budget 2083/84: Top 15 Highlights

The most important changes from Nepal's Rs. 2,124.34 billion FY 2026/27 budget, designed for quick reference.

1. Rs. 2,124.34 billion total budget

Nepal's largest federal budget to date for FY 2026/27. Recurrent: Rs. 1,286 B; Capital: Rs. 431 B; Financial management: Rs. 407 B.

2. 7% economic growth target

Government aims to sustain broad-based GDP expansion while keeping inflation below 6%.

3. 29% maximum individual income-tax rate

Reduced from the previous 39%, benefiting high-income earners significantly. Applies to taxable income above Rs. 40 lakh.

4. First Rs. 10 lakh income-tax slab at 1%

The lowest slab now covers the first Rs. 10,00,000 of taxable income at a 1% rate (with specified waivers for SSF contributors, qualifying pension and sole-proprietorship income).

5. 10% digital-payment VAT rebate

Consumers who pay retail bills via QR code, digital wallet, or card automatically receive a 10% credit of the VAT charged back to their payment account.

6. Customs restructured from 11 to 7 tiers

Simplified customs tariff structure to reduce trade friction and improve compliance. 273 raw-material duty reductions for manufacturers.

7. 5% final withholding tax for IT exporters

IT companies and software exporters receiving foreign-currency payments through domestic banks pay a 5% final WHT (subject to stated conditions).

8. Sovereign AI Computing Centre

Budget allocates funds to establish Nepal's national AI computing infrastructure to support the digital economy.

9. Electricity capacity target: 5,535 MW

Major push to expand hydropower and energy capacity as a driver of industrial growth and exports.

10. Tax dispute settlement scheme

Taxpayers with pending income tax, VAT, or excise disputes can settle by paying the assessed principal plus a 1% fee by Poush 30, 2083 (mid-January 2027), with all fines, interest and penalties waived.

11. 360 excise-taxed goods exempted

Excise duty removed from 360 categories of goods to reduce the compliance and price burden.

12. 2% Digital Services Tax (DST)

Foreign digital service providers with Nepal-sourced income above Rs. 30 lakh must register and remit 2% DST.

13. Ride-sharing platform taxation

Ride-sharing income now subject to 13% VAT and 1% advance income tax deducted at source by the platform.

14. Health insurance expansion

Programme targeting up to 90% population coverage, with increased premium subsidy for qualifying citizens.

15. Agriculture and food security

Rs. 47–62 billion allocated to agriculture and livestock (figure varies by classification); emphasis on food self-sufficiency and farmer subsidies.

Source: Ministry of Finance Budget Speech 2083/84 · Finance Act 2083. All figures to be verified with official MoF publications.

Budget 2083/84 Changes: Who Is Affected?

Find out which Budget 2083/84 change applies to you and what to check next.

Who Benefits From Nepal Budget 2083/84?

Nepal Budget 2083/84 PDF & Official Documents

The official Nepal Budget 2083/84 documents — including the Budget Speech, Finance Bill, Finance Act, and supporting annexes — are published by the Ministry of Finance. For the original Nepali and English-language documents, use the official Ministry of Finance source.

Primary source: Ministry of Finance Nepal — mof.gov.np

Tax provisions source: Inland Revenue Department — ird.gov.np

Customs: Department of Customs — customs.gov.np

Do not rely on third-party PDF re-uploads. Always verify documents against the official Ministry of Finance source for accuracy and completeness.

बजेट २०८३/८४ — नेपालीमा (Nepali Summary)

आर्थिक वर्ष २०८३/८४ को नेपाल सरकारको संघीय बजेट रु. २,१२४.३४ अर्ब रहेको छ। यो बजेट अर्थमन्त्री डा. स्वर्णिम वाग्लेद्वारा प्रस्तुत गरिएको हो। बजेटको प्रमुख उद्देश्यहरूमा ७% आर्थिक वृद्धि, ६% भन्दा कम मुद्रास्फीति, पूर्वाधार विकास, ऊर्जा, रोजगारी, स्वास्थ्य, शिक्षा, डिजिटल प्रविधि तथा कर सुधार रहेका छन्।

प्रमुख कर परिवर्तनहरूमा पहिलो रु. १० लाखमा १% कर, अधिकतम व्यक्तिगत कर दर ३९% बाट घटाएर २९%, डिजिटल भुक्तानीमा १०% VAT छुट, भन्सार दर ११ बाट ७ तहमा घटाइएको र कर विवाद सम्झौता योजना समावेश छन्।

आधिकारिक कागजातहरूको लागि: अर्थ मन्त्रालय — mof.gov.np

1. Nepal Budget 2083/84: Overview

A summary of the fiscal plan for FY 2026/27, outlining the total budget, expected growth, and main objectives.

1.1 Budget Year and Implementation Period

The Nepal Budget 2083/84 covers the Nepali Fiscal Year 2083/84, corresponding to the Gregorian calendar year 2026/27. The budget provisions take effect from Shrawan 1, 2083 (July 17, 2026) and govern fiscal policy until Ashadh 31, 2084. To quickly align these fiscal dates with the English calendar, use our Nepali Date Converter.

1.2 Total Budget Size

The total allocated budget is Rs. 2,124.34 billion (NPR 2,124.34 Arba), representing an increase from the previous fiscal year.

1.3 Economic Growth and Inflation Targets

The government has set an economic growth target of 7.0% for the fiscal year, with inflation targeted to remain below 6.0%. This aims to ensure macroeconomic stability while pursuing robust expansion.

1.4 Main Policy Objectives

The principal objectives of this budget are to stimulate economic recovery, broaden the tax net, simplify tax administration, and encourage digital payments and IT exports.

1.5 Nepal Budget 2083/84, Fiscal Policy and Economic Outlook

The Nepal Budget 2083/84 is the government's annual fiscal plan for FY 2026/27. It sets out planned government revenue, expenditure, taxation, borrowing, investment and policy priorities for the fiscal year.

The budget should be read together with Nepal's economic survey, fiscal policy documents, the Finance Act 2083 and related government notifications. These documents provide different parts of the broader economic and fiscal framework.

For official documents and the latest government publications, verify information with the Ministry of Finance and the Inland Revenue Department.

Official Sources

For authoritative information, readers should verify the latest documents and notifications from:

• Ministry of Finance – Budget Speech
• Inland Revenue Department – Tax and Finance Act information
• Department of Customs – applicable customs schedules and notices

2. Budget Size, Revenue & Expenditure

2.1 Revenue and Financing Sources

To understand the real-time USD equivalent of these international financing figures, check our Live Exchange Rates.

2.2 Expenditure and Financing Applications

2.3 FY 2082/83 vs FY 2083/84 Comparison

The current fiscal budget increases capital expenditure moderately compared to the revised estimates of FY 2082/83 while maintaining disciplined recurrent expenditure growth.

2.4 Revenue, Loans and Grants

Approximately 56.5% of the total budget will be financed through federal revenue generation, emphasizing self-sufficiency over extensive external borrowing.

3. Major Highlights of Nepal Budget 2083/84

3.1 Major Tax Changes

Introduction of a revised tax structure where the first Rs. 10 lakh of individual taxable income falls within the 1% slab, and maximum individual income tax rate slashed from 39% to 29%. You can calculate your exact liability under this new structure using our Nepal Income Tax Calculator.

3.2 Government Restructuring

Various redundant government boards and committees are set to be dissolved or merged to optimize recurrent expenditure.

3.3 Digital Economy and Technology

Sovereign AI computer center announced, Nagarik App expanded, and IT sector boosted.

3.4 Infrastructure and Energy

Priority funding allocated for national pride projects and major highway network expansion.

3.5 Social Sector Priorities

Significant funding injection for healthcare infrastructure and vocational education.

4. Sector-Wise Budget Allocations

The Ministry of Finance has distributed the budget across key sectors to align with the national development plan.

Below are the sector-wise budget allocations as listed in the supplied budget summary:

• Science, Technology & Innovation: Rs. 4 billion
• Industry, Commerce & Supply: Rs. 8 billion
• Labour, Employment & Social Security: Rs. 4 billion
• Civil Aviation: Rs. 3 billion
• Culture & Tourism: Rs. 7 billion
• Forest, Environment & Climate: Rs. 12 billion
• Agriculture & Livestock: Rs. 47 billion
• Women, Children, Gender & Sexual Minorities: Rs. 2 billion
• Health: Rs. 102 billion
• Education: Rs. 218 billion
• Sports: Rs. 4 billion
• Information & Communication: Rs. 6 billion
• Energy: Rs. 86 billion
• Water Supply & Sanitation: Rs. 37 billion
• Road & Urban Infrastructure: Rs. 286 billion

5. Information Technology & Digital Economy

5.1 Sovereign AI Computer Center

The government will establish a Sovereign AI Computer Center with specialized infrastructure to process domestic data securely.

5.2 AI Research Fellowship

Scholarships and fellowships introduced for post-graduate students conducting research in Artificial Intelligence.

5.3 Science and Research Capital Allocation

Universities receive dedicated funding for indigenous technology and scientific research.

5.4 Nagarik App Expansion

More than 40 new civic services are being integrated into the official Nagarik App.

5.5 Nepal Telecom Share Divestment

Provisions introduced to divest a portion of Nepal Telecom shares to the general public and strategic partners.

5.6 Digital Service Tax

Non-resident persons providing digital services to consumers in Nepal are subject to a 2% Digital Service Tax (DST) on their transaction value if the annual transaction exceeds Rs. 30,00,000.

5.7 Digital Service Tax Exemptions

Annual transactions up to Rs. 30,00,000 annually are exempt from DST.

5.8 Digital Service Tax Filing and Penalties

Filing is required according to the prescribed deadlines, and failure to register or file returns incurs significant penalties.

6. Health & Education

6.1 Education Budget

Total allocation: Rs. 218.30 billion.

6.2 Health Budget

Total allocation: Rs. 95.00 billion. The budget emphasizes preventive healthcare, nutrition programs, and accessible maternal care. For your own personal health tracking, NepaCalc provides tools like the BMI Calculator and Calorie Calculator to monitor daily wellness metrics.

6.3 Scholarships

Rs. 8.60 billion allocated for scholarships targeted at marginalized and meritorious students.

6.4 Medicine, Nursing and IT Seats

Targets set to drastically increase available seats for MBBS, Nursing, and IT education.

6.5 AI and EdTech

Integration of AI and educational technology in secondary school curriculums.

6.6 Paid Internships

Paid internship system established for higher education students in government and private sectors.

6.7 Education Infrastructure and Internet Access

Target to provide high-speed internet connectivity to 75% of educational institutions.

6.8 Education Equity Fee

A 3% Education Equity Fee is introduced on fees paid to foreign institutions.

6.9 Health Equity Fee

A 3% Health Equity Fee is introduced.

6.10 Education Service Fee

Updated compliance and collection mechanisms for the existing Education Service Fee.

6.11 University Tax Exemption

Universities receive income tax exemptions for income generated from educational and research activities.

6.12 Nursing Night Duty Allowance

Nurses performing night shifts in government hospitals will receive an updated allowance.

7. Agriculture, Food & Beverages

7.1 Agriculture Budget

Allocated Rs. 62.00 billion for the overall agriculture sector.

7.2 Fertilizer Procurement

Substantial subsidies maintained for the timely procurement and distribution of chemical fertilizers.

7.3 Commercial Farmer Incentives

Production-based subsidies replacing input-based subsidies for commercial farmers.

7.4 Youth Agriculture Startups

Special funding window for youth engaged in modern agricultural startups.

7.5 Agricultural Processing

Incentives for setting up cold storage and agricultural processing plants.

7.6 Green Urea Industry

Tax holidays and concessions announced for companies establishing Green Urea plants.

7.7 Agricultural Business Tax Exemption

Income derived from specified primary agricultural activities remains tax-exempt.

7.8 Agricultural Windfall Income

Specific provisions updated for windfall gains in agricultural cooperatives.

8. Liquor, Tobacco and Excise-Regulated Industries

8.1 Liquor Excise Changes

Upward revision of excise duties on premium liquors and spirits.

8.2 Health Risk Surcharge

A Health Risk Surcharge applied to tobacco products and select alcoholic beverages.

8.3 Electronic Track and Trace System

Implementation of an electronic track and trace system for excise stamps to prevent revenue leakage and counterfeit products.

8.4 Alcohol Volume Variation

Strict penalties introduced for variations in declared alcohol by volume (ABV).

8.5 Liquor Compliance Penalties

Fines increased for the sale of liquor without appropriate excise stamps.

8.6 Tobacco and Nicotine Tax Changes

Excise rates increased on cigarettes, pan masala, and alternative nicotine delivery systems.

9. Transportation, Ride-Sharing & Vehicle Tax

Need to calculate your personal vehicle tax for this fiscal year? Use our Nepal Vehicle Tax Calculator.

9.1 Ride-Sharing Advance Tax

Ride-sharing platforms are required to deduct 1% advance tax on payments made to drivers.

9.2 Ride-Sharing VAT

Ride-sharing services must register for VAT, bringing them under the standard tax net.

9.3 Vehicle Offences and Confiscation

Stricter provisions implemented for vehicles involved in smuggling or tax evasion, leading to potential confiscation.

9.4 Vehicle Owner and Driver Penalties

Penalties restructured for non-compliance with transport regulations.

9.5 Annual Tax on Vehicles on Hire

Revisions made to the annual vehicle tax for commercial and hire vehicles.

9.6 Electric Vehicle Tax Changes

Minor adjustments to the customs and excise duties applied to imported electric vehicles (EVs) based on motor capacity.

9.7 Automobile Excise Changes

Excise duty rates adjusted for internal combustion engine (ICE) vehicles based on engine displacement.

10. Capital Market & Real Estate

10.1 Capital Gains Tax Changes

The Capital Gains Tax (CGT) rate structure for natural persons trading in securities has been updated.

10.2 Securities Capital Gains Tax

For individuals trading listed securities: Short-term CGT (holding less than 1 year) is set at 7.5%, and Long-term CGT (holding more than 1 year) is set at 5.0%. You can work out your net profit after SEBON commission, DP fees, and CGT using the NEPSE share trading calculator.

10.3 Real Estate Capital Gains

CGT on real estate transactions varies based on holding periods. Check your registration fees with the Property Registration Calculator and Property Tax Calculator.

10.4 Government Acquisition Concession

Exemptions provided for property acquired by the government for public infrastructure projects.

10.5 Government Property Donation Exemption

Tax relief offered when individuals or corporations donate land or property to the government.

10.6 Final Withholding Treatment

Clarifications issued regarding which capital gains count as final withholding for individuals.

11. Energy, Hydropower & Foreign Employment

11.1 Energy and Hydropower Provisions

Significant budget allocations have been directed toward completing ongoing hydropower projects and expanding cross-border transmission lines.

11.2 Electricity VAT

The applicability of VAT on electricity transmission and distribution has been clarified to reduce ambiguity for independent power producers. Estimate your bills using the NEA Electricity Bill Calculator.

11.3 Hydropower Construction and Financing

Special financing mechanisms introduced for green energy and large-scale reservoir hydropower projects.

11.4 Foreign Employment Service Fee

Manpower agencies must now pay a specific Foreign Employment Service Fee when processing workers for overseas jobs. Calculate potential earnings using the Foreign Employment Calculator.

11.5 Foreign Employment Compliance

Stricter monitoring of remittances and banking channels for foreign employment income.

12. Amendments to the Income Tax Act

12.1 New Definitions

Several definitions, including those related to digital services and beneficial ownership, have been updated in the Income Tax Act.

12.2 International Taxation

Alignment of domestic tax laws with international taxation frameworks to prevent base erosion.

12.3 Associated Persons

Clearer guidelines issued for determining associated persons and related party transactions.

12.4 Safe Harbor Rule

Introduction of Safe Harbor Rules for specific cross-border transactions to simplify transfer pricing compliance.

12.5 Advance Pricing Agreement

Provisions made for Advance Pricing Agreements (APAs) allowing multinational companies to agree on transfer pricing methodologies in advance.

12.6 New Tax-Exempt Income

Specific allowances, including certain retirement and disability benefits, have been added to the tax-exempt income list.

12.7 Interest Income Exemption

Interest income up to Rs. 25,000 from eligible microfinance institutions and cooperatives is now tax-exempt.

12.8 Donation Deduction

Limits on deductible donations to approved philanthropic organizations have been revised.

12.9 CSR Deduction

Corporate Social Responsibility (CSR) expenditure deductions are streamlined for corporate taxpayers.

12.10 Insurance Deduction

Increased limits for life insurance premium deductions for individuals.

12.11 Children's Education Deduction

Tuition fee deductions are now available up to 25% of annual tuition fees or Rs. 25,000, whichever is lower.

12.12 Cash Expense Limitation

The threshold for allowable cash expenses has been strictly enforced to promote digital transactions.

12.13 Share and Debenture Issuance Expenses

Tax treatment of costs associated with issuing shares and debentures has been clarified.

12.14 Section 47Ka Repeal

Specific merger and acquisition tax exemptions under Section 47Ka have been modified or repealed.

12.15 Section 57 Changes

Changes in ownership control (Section 57) now have updated compliance requirements.

12.16 Departmental Interpretation and Data Access

The Inland Revenue Department (IRD) is granted broader access to electronic financial data for tax assessment purposes.

13. New Income Tax Slabs for FY 2083/84

The budget introduces a unified tax exemption limit for individuals and couples, fundamentally shifting the tax burden.

13.1 Individual Income Tax Slabs: FY 2083/84

The first Rs. 10,00,000 of taxable income falls within the 1% slab. This is not a tax-free exemption: a 1% rate applies. However, the 1% tax is not levied on specified pension income, Social Security Fund (SSF) contributions, and certain sole-proprietorship income under the stated provisions.

✅ Verified against supplied Budget Summary PDF (K.B.P.S. & Associates, 40-page summary). Source Act: Finance Act 2083, Schedule 1. Previous FY rates: Finance Act 2082. All rates apply to natural persons.

13.2 1% Slab: Important Clarification

The 1% rate applies to the first Rs. 10,00,000 of taxable income. It is waived for: (a) SSF-contributing employees, (b) specified pension/pension-fund income, and (c) certain sole-proprietorship income under the Finance Act provisions.

13.3 Maximum 29% Tax Rate

The maximum marginal tax rate has been reduced from 39% to 29% on income above Rs. 40,00,000: a reduction of 10 percentage points.

13.4 Key Deductions Verified

The following deductions are confirmed by the Budget Summary PDF: Donation ceiling increased from Rs. 1,00,000 to Rs. 3,00,000 (5% of income ceiling retained). CSR deduction: up to 1% of net profit. Tuition deduction: lower of 25% of fees or Rs. 25,000. Building insurance threshold: increased from Rs. 5,000 to Rs. 10,000. Cash expense threshold: Rs. 25,000 applies to all taxpayers.

13.5 Tax Assessment Period

Income-tax assessment period reduced from 4 years to 3 years under Section 101(3). Refund claim window extended from 2 to 5 years. Source: Budget Summary PDF.

14. TDS and Advance Tax Changes

14.1 TDS & Advance Tax Changes Identified in the Supplied Budget Summary

The following TDS changes are confirmed by the 40-page K.B.P.S. & Associates Budget Summary PDF. This is not a complete TDS rate schedule: it covers only the changes specifically identified in the supplied source. Use the Nepal TDS Calculator for computation.

14.2 Insurance Agent Commission TDS: Increased to 20%

TDS on commission and service fees paid to insurance agents has been increased from 15% to 20%. Source: Budget Summary PDF, confirmed. Relevant section: Income Tax Act 2058, Sec. 87.

14.3 Ride-Sharing Platform Advance Tax: 1%

Ride-sharing platform operators must calculate, collect, and deposit 1% advance tax on each driver payment transaction. Source: Budget Summary PDF.

14.4 IT Export / Foreign Currency: 5% Final WHT

IT companies and freelancers receiving foreign currency income through domestic banking channels are subject to a 5% final withholding tax. This replaces self-assessed income tax on this income stream. Source: Budget Summary PDF, Sec. 92.

14.5 Section 89(3Ka) Repealed

The 1.5% withholding on payments exceeding Rs. 50,00,000 for consumer committee work under Section 89(3Ka) has been repealed. Source: Budget Summary PDF.

14.6 Safe Harbor: Transfer Pricing

A Safe Harbor provision covers controlled transactions up to Rs. 1 billion (Rs. 100 crore). An Advance Pricing Agreement (APA) mechanism has been introduced with unilateral, bilateral and multilateral options and a 4-year rollback provision. Source: Budget Summary PDF.

15. Digital Services, Freelancers and IT Export

15.1 Digital Service Tax Rate

A Digital Service Tax (DST) of 2% is levied on the transaction value of digital services provided by non-residents to Nepali consumers.

15.2 Who Must Pay DST

Global tech companies, streaming platforms, and cloud service providers generating revenue from Nepal.

15.3 DST Exemption Threshold

Transactions up to Rs. 30 lakhs (NPR 3,000,000) annually are exempt from DST.

15.4 Foreign Digital Service Providers

Providers must register in Nepal and file DST returns through the designated electronic portal.

15.5 Freelancer and Foreign Currency Income

IT professionals and freelancers receiving foreign currency income through domestic banking channels are subject to a 5% final withholding tax.

15.6 Filing Deadline

DST returns must be filed within 3 months of the end of the income year.

15.7 DST Penalties

Strict penalties apply for failure to register, file returns, or pay DST on time.

16. VAT Changes

For quick VAT computations, use the Nepal VAT Calculator.

16.1 Electricity VAT

VAT applicability on electricity transmission components has been clarified.

16.2 Ride-Sharing VAT

Ride-sharing platforms are now explicitly brought under the VAT net.

16.3 Digital Invoice Requirements

Mandatory issuance of electronic invoices for businesses meeting specified turnover thresholds.

16.4 CBMS Registration

Expansion of the Central Billing Monitoring System (CBMS) to include more retail and service businesses.

16.5 VAT Return Submission

Streamlined VAT return submission processes via the IRD portal.

16.6 Seven-Day Return Amendment

Taxpayers can now amend their submitted VAT returns within seven days without penalty if an error was made.

16.7 Digital Payment VAT Rebate

A 10% VAT rebate is credited to consumers who pay for goods and services using approved digital payment methods (QR code, card, wallet) and receive an electronic invoice.

16.8 VAT Penalties

Penalties for non-issuance of invoices and CBMS evasion have been increased.

17. Excise Duty Changes

17.1 Food and Agriculture Excise

Excise duty abolished on 360 goods, primarily agricultural inputs and essential foods.

17.2 Pan Masala and Tobacco Inputs

Increased excise duty on raw materials used for tobacco and pan masala production.

17.3 Non-Alcoholic Beverages

Adjusted excise rates for sugary drinks and energy beverages.

17.4 Beer, Wine and Fermented Beverages

Moderate increases in excise duty per liter for beer and wine.

17.5 Readymade Liquor

Significant excise hikes on premium imported and domestic hard liquors.

17.6 Tobacco Products

Increased per-stick and per-kg excise on cigarettes and chewing tobacco.

17.7 Automobile Excise

Adjustments to excise duty on ICE vehicles based on engine capacity.

18. Customs Duty Changes

The Department of Customs will implement the revised tariff schedule.

18.1 Customs Duty Reduction

Customs duty reduced on various essential commodities and industrial machinery.

18.2 Raw Material Duty Changes

Duty on 273 industrial raw materials reduced to boost domestic manufacturing.

18.3 Customs Duty Slab Reduction

The number of customs duty tiers has been compressed from 11 tiers down to 7 to simplify administration.

18.4 Green Tax

A Green Tax has been introduced on the import of specific polluting goods and fossil fuels.

18.5 Electric Vehicle Customs Duty

Customs duty on Electric Vehicles (EVs) has been restructured across different kW capacity segments.

18.6 Automobile Import Duties

Minor adjustments to the import duties for commercial ICE vehicles.

18.7 Customs Compliance

Enhanced post-clearance audit mechanisms established.

19. Consolidated Tax Rate Changes: Master Reference Table

Complete reference of all tax rate changes in FY 2083/84. Each row states the old rate, new rate, who it applies to, when it takes effect, and which Act/Section governs it.

Effective-Date Notice: A budget speech announcement, Finance Bill, Finance Act, and subsequent government Gazette notification are not interchangeable legal instruments. Tax rates become legally enforceable only upon presidential authentication of the Finance Act and, in some cases, a separate Gazette notification. The above rates reflect the Finance Act 2083 as summarised. Always verify with the IRD or Department of Customs before relying on any specific rate for compliance purposes.

20. Consolidated VAT, TDS and Customs Tables

20.1 VAT Changes Master Table

20.2 TDS Changes Master Table

✅ Source: verified against supplied Budget Summary PDF. This table covers only TDS changes identified in the supplied source: it is not a complete TDS rate schedule.

20.3 Selected Customs Duty Changes Master Table

Source: Finance Act 2083 / Customs Tariff Order. Full schedule available at the Department of Customs (customs.gov.np).

20.4 Selected Excise Rate Changes Master Table

21. Tax Exemptions, Deductions & Concessions

21.1 Income Tax Exemptions

Persons with disability, senior citizens, and specified allowances remain exempt from income tax.

21.2 Interest Income Exemption

Interest income up to Rs. 25,000 from eligible cooperatives and microfinance institutions is exempt.

21.3 Agricultural Exemptions

Primary agricultural income generated by registered cooperatives and individual farmers remains exempt.

21.4 Donation Deduction

Up to 10% of adjusted taxable income donated to approved institutions is deductible.

21.5 CSR Deduction

Corporate CSR expenditure in approved areas is fully deductible within prescribed limits.

21.6 Insurance Deduction

Life insurance premiums up to Rs. 40,000 annually are deductible from taxable income.

21.7 Education Deduction

Tuition fee deductions for children: the lower of 25% of fees paid or Rs. 25,000 per year.

21.8 Property Donation Exemption

Transfer of property to government or approved charitable institutions is exempt from CGT.

21.9 University Exemption

Universities meeting the conditions under the Income Tax Act are tax-exempt on academic income.

22. Tax Amnesty & Exemption Schemes

One-time concession schemes introduced under Finance Act 2083 for taxpayers with outstanding dues. All schemes require action before the stated deadlines.

22.1 Destroyed Business Stock

Businesses that suffered inventory losses due to natural disasters can apply for VAT waiver on destroyed goods with proper documentation.

22.2 Restoration Duty Exemption

Goods imported for post-disaster restoration may qualify for customs duty exemption.

22.3 Gold and Jewellery Waiver

Undeclared gold and jewellery up to prescribed limits can be regularized by paying a nominal settlement amount.

22.4 Expired Industrial Goods

Tax waiver on expired goods that were written off as per approved procedures.

22.5 Damaged Excise Stamps

Damaged or lost excise stamps can be written off without additional penalty if properly reported.

22.6 Post-Clearance Audit Settlement

Disputes arising from post-clearance audits can be settled by paying the determined principal duty without interest and penalties.

22.7 Shipping Container Release

Containers detained at customs for over 6 months can be released on payment of outstanding duty and a nominal settlement fee.

22.8 Universities and Non-Residents

Tax settlement provisions for foreign universities and non-resident persons providing services in Nepal. Source: Budget Summary PDF, Sec. 37/38.

22.9 Non-Profit Institutions

Non-profit organizations can regularize past non-compliance by filing outstanding returns and paying principal taxes.

22.10 Insurance Agents VAT Waiver

Insurance agents who were inadvertently VAT-registered can apply for cancellation and waiver of accumulated VAT liability.

22.11 PAN Regularisation

Inactive PANs can be regularized without penalty by Poush 30, 2083 (mid-January 2027).

22.12 VAT Liability Settlement

Pending VAT assessments for FY 2079/80 and earlier can be settled by paying the principal tax plus a 1% settlement fee.

22.13 Paneer VAT Waiver

A specific waiver scheme has been introduced for paneer producers who were incorrectly charged VAT under a previous assessment.

22.14 Self-Assessed Tax Settlement

Taxpayers with self-assessed pending tax liabilities can settle with a 1% fee before Poush 30, 2083.

22.15 Assessed Tax Settlement

Tax disputes where assessments have already been issued can be settled at the principal amount with all penalties waived.

22.16 Non-Compliant Company Scheme

Companies that failed to file annual returns at the Company Registrar can regularize by paying a reduced fine before the deadline.

22.17 Penalty and Interest Waiver

All interest, penalties, and additional charges are fully waived for settlements made before Poush 30, 2083.

22.18 Revenue Leakage Cases

Revenue leakage disputes can be settled through the special settlement window with a partial penalty reduction.

22.19 Bank Guarantee Release

Taxpayers with bank guarantees or cash deposits held by the tax office can apply for release upon settling outstanding principal dues.

23. Master Exemption & Relief Schemes: Summary Table

Source: Finance Act 2083 (Nepal). Deadlines are based on the official Finance Bill. Verify with the IRD (ird.gov.np) before acting.

24. Deadlines & Compliance Calendar

24.1 Tax Filing Deadlines

Standard income tax return deadline: 3 months after the end of the income year (i.e., Ashwin end of the following year).

24.2 DST Deadline

Digital Service Tax return: within 3 months after fiscal year end.

24.3 Education/Health Equity Fee Deadline

Within 25 days of end of each trimester.

24.4 Foreign Employment Service Fee Deadline

By the 25th of the following month.

24.5 PAN Regularisation Deadline

Poush 30, 2083 (approx. mid-January 2027).

24.6 VAT Settlement Deadline

Poush 30, 2083 for all VAT-related settlement schemes.

24.7 Tax Dispute Settlement Deadline

Poush 30, 2083: all pending income tax disputes under the settlement window.

24.8 Company Regularisation Deadline

Poush 30, 2083: for non-compliant companies to regularize without full penalty.

24.9 Customs/Excise Settlement Deadline

Poush 30, 2083: for customs and excise relief schemes.

Effective-Date Note: A budget announcement, Finance Bill, and Finance Act are distinct legal instruments. Tax rates take effect upon presidential authentication of the Finance Act, not from the date of the budget speech. Always verify against the official IRD notice (ird.gov.np) before filing or making payments.

25. How Budget 2083/84 Affects Individuals

25.1 Salaried Employees

The Rs. 10 lakh first tax slab (1%) directly reduces taxable income for most salaried workers. To see your exact take-home pay under the new slabs, the Nepal Salary Calculator breaks down gross-to-net with SSF and IRD deductions.

25.2 Business Owners

Proprietors benefit from the same Rs. 10 lakh first slab, with simplified slab structure reducing high-bracket burdens.

25.3 Freelancers

Freelancers receiving foreign currency through domestic banking channels will have a 5% final WHT applied: simplifying compliance vs. the previous self-assessed regime.

25.4 Investors

Capital gains rates and the tax settlement window offer planning opportunities for share and real estate investors. If you hold listed shares, check your bonus share and dividend tax liability separately from trading gains.

25.5 Property Sellers

Real estate CGT rules have been updated.

25.6 Vehicle Owners

Vehicle annual tax revisions and EV customs adjustments affect all vehicle owners.

25.7 Consumers

The 10% digital VAT rebate makes cashless purchases more attractive for everyday consumers.

26. How Budget 2083/84 Affects Businesses

26.1 SMEs

Simplified tax slabs and the settlement scheme reduce administrative burden for small and medium enterprises.

26.2 Startups

IT sector tax holidays and favourable import duties for tech equipment benefit early-stage startups.

26.3 IT Exporters

5% final withholding on foreign currency income replaces complex self-assessed calculations, reducing compliance cost for software exporters.

26.4 Importers

Customs compression from 11 to 7 tiers reduces the average effective duty for industrial importers.

26.5 Manufacturers

Reduced excise and input duties on 273 raw materials directly lower manufacturing costs.

26.6 Liquor and Tobacco Businesses

Mandatory electronic track and trace system and increased excise rates require immediate investment in compliance infrastructure.

26.7 Education Institutions

Universities receive income tax exemptions, while the new Education Equity Fee applies to institutions collecting fees for foreign courses.

26.8 Private Hospitals

Health Equity Fee compliance and the revised insurance deduction rules affect hospital billing procedures.

26.9 Ride-Sharing Platforms

Mandatory VAT registration and 1% advance tax deduction on driver payments require immediate platform-level changes.

27. FY 2082/83 vs FY 2083/84: What Changed?

28. Key Takeaways & Practical Examples

28.1 Income Tax Example

An individual with annual income of Rs. 20,00,000 pays: Rs. 10,000 on the first Rs. 10 lakh (1%), then 10% on Rs. 5,00,000 = Rs. 50,000. Total: Rs. 60,000 (excluding SSF deductions).

28.2 Salary Example

A government employee earning Rs. 12,00,000 a year benefits from the Rs. 10 lakh first slab. Only Rs. 2,00,000 falls in the 10% slab, giving a tax of Rs. 20,000. EPF contributors can further reduce this: see how with the Provident Fund calculator.

28.3 TDS Example

A company pays Rs. 1,00,000 for professional services. At 15% TDS, Rs. 15,000 is withheld and remitted to IRD.

28.4 VAT Example

A consumer purchases goods worth Rs. 1,000 + 13% VAT = Rs. 1,130. If paid via QR code, 10% of Rs. 130 = Rs. 13 is credited back to their wallet.

28.5 Capital Gains Example

An investor sells listed shares held for 8 months at a gain of Rs. 1,00,000. CGT at 7.5% = Rs. 7,500 withheld at source.

28.6 Vehicle Tax Example

A private car owner with a 1,600cc petrol vehicle will pay the revised annual vehicle tax rate for FY 2083/84.

28.7 Business Compliance Example

A business with a pending VAT assessment from FY 2079/80 of Rs. 5,00,000 (principal) can settle by paying Rs. 5,05,000 (principal + 1% fee) before Poush 30, 2083, with all interest and penalties cancelled.

29. Frequently Asked Questions

29.1 What is the total budget of Nepal for FY 2083/84?

The total Nepal Budget for FY 2083/84 (2026/27) is Rs. 2,124.34 billion, covering recurrent expenditure, capital expenditure, and financial management allocations.

29.2 What is the new income tax slab structure?

The first Rs. 10,00,000 of taxable income falls within the 1% slab: this is not a tax-free exemption. The 1% is waived only for SSF contributors, specified pension income, and certain sole-proprietorship income. The top rate is 29% on income above Rs. 40,00,000, reduced from 39% in FY 2082/83.

29.3 What is the maximum income tax rate?

The maximum marginal income tax rate is 29% on annual taxable income above Rs. 40,00,000: reduced from 39% in FY 2082/83.

29.4 What are the major VAT changes?

The biggest change is a 10% digital payment VAT rebate: when consumers pay retail bills via QR code, digital wallet, or card, 10% of the VAT charged is automatically credited to their payment account.

29.5 What are the new TDS rates?

IT companies and software exporters receiving foreign currency payments through domestic banks are subject to a 5% final withholding tax. Other notable updates include revised insurance agent TDS rates.

29.6 What are the major tax waiver and settlement schemes?

Taxpayers with pending income tax, VAT, or excise disputes can settle by paying the assessed principal tax plus a 1% settlement fee by Poush 30, 2083 (approx. January 14, 2027), with all fines, interest, and penalties fully waived.

29.7 When do the new tax provisions take effect?

Most provisions under Finance Act 2083 are effective from Shrawan 1, 2083 (July 17, 2026). However, some specific provisions (such as DST and equity fees) have their own deadlines. Always verify with official IRD notices.

29.8 What is the budget of Nepal for 2083/84?

Nepal's total budget for FY 2083/84 (2026/27) is Rs. 2,124.34 billion. The allocation covers recurrent expenditure, capital expenditure and financial management.

29.9 What is the economic growth target for Nepal in FY 2083/84?

The government has set an economic growth target of 7.0% for FY 2083/84, with inflation targeted below 6.0%.

29.10 What is the difference between the Nepal Budget and the Economic Survey?

The Economic Survey provides an assessment of Nepal's economic performance and conditions, while the annual Budget sets out the government's planned revenue, expenditure, taxation and fiscal priorities for the coming fiscal year.

30. Related Nepal Calculators & Official Resources

30.1 Related NepaCalc Tools

30.2 Read These Guides

In-depth articles related to Nepal income tax, TDS, and financial topics:

• Nepal Income Tax Guide 2082/83: How the previous year's slabs worked and what changed for 2083/84
• How to File Your Income Tax Return in Nepal: Step-by-step ITR filing guide for individuals and businesses
• Nepal TDS Guide 2083: Complete breakdown of withholding tax rates, deadlines, and compliance
• NEA Electricity Tariff Rates 2083/84: Updated NEA unit slab rates and how the budget affects electricity billing

30.3 Official Government Resources

• Ministry of Finance Nepal: Budget speech, Finance Act, and economic survey documents
• Nepal Rastra Bank (NRB): Monetary policy, banking regulations, and foreign exchange

30.4 Budget Documents and Legal References

• Finance Act 2083 (Nepal): Primary legal source for all tax changes
• Income Tax Act 2058 (as amended by Finance Act 2083)
• VAT Act 2052 (as amended)
• Customs Act 2064 (as amended)
• Excise Duty Act 2058 (as amended)

Common Misconceptions About Nepal Budget 2083/84

These are frequently misunderstood points about the 2083/84 Budget and Finance Act 2083.

Myth 1: The first Rs. 10 lakh is completely tax-free

Reality: The first Rs. 10 lakh of taxable income is not generally tax-free. It falls under a 1% tax rate. The 1% treatment is waived only for specified categories — qualifying SSF-contributing employees, certain qualifying pension income, and specified sole-proprietorship income under the Finance Act 2083. Most salaried individuals pay 1% on the first Rs. 10 lakh.

Myth 2: The maximum income-tax rate is still 39%

Reality: Under Finance Act 2083, the maximum marginal rate for natural persons is 29% on taxable income above Rs. 40 lakh. The 39% rate applied in FY 2082/83 and has been reduced.

Myth 3: The standard VAT rate changed

Reality: The standard VAT rate remains 13%. What changed is the introduction of a 10% VAT rebate when consumers pay via digital means (QR, card, wallet). The headline VAT rate is unchanged.

Myth 4: Ride-sharing platforms now charge 5% VAT

Reality: Ride-sharing services are subject to the standard 13% VAT. Additionally, a 1% advance income tax is deducted at source by the platform. Do not confuse the 1% advance tax with the VAT rate.

Myth 5: Every taxpayer with old dues qualifies for the settlement scheme

Reality: Eligibility and deadlines vary by provision. The general tax dispute settlement allows payment of the principal + 1% fee by Poush 30, 2083. However, specific schemes have specific eligibility criteria. Confirm your case with the IRD before payment.

Myth 6: The 5% IT export WHT applies to all freelancers

Reality: The 5% final WHT applies to qualifying IT companies and software exporters receiving foreign-currency payments through domestic banking channels. Eligibility depends on the nature of services, payment channel, and conditions under Section 92 of the Income Tax Act as amended. Not all freelancers qualify automatically.

What Should You Do After Nepal Budget 2083/84?

Practical steps based on your taxpayer type. Verify with a qualified tax adviser before acting.

For Individuals & Salaried Employees

• Recalculate your FY 2083/84 taxable income using the new slabs. Use our Nepal Income Tax Calculator.
• Check whether you qualify for the 1% slab waiver (SSF contributor, pension, qualifying sole-proprietor).
• Review your insurance, education, and donation deductions — these reduce taxable income.
• Verify the TDS deducted by your employer matches the correct slab rates.
• If you have old tax disputes, check whether the settlement scheme applies to you (deadline: Poush 30, 2083).

For Freelancers & IT Exporters

• Determine whether your foreign-currency income qualifies for the 5% final WHT under Section 92.
• Confirm you are using a qualifying domestic banking channel for foreign payments.
• If your income does not qualify for 5% WHT, it falls under normal income tax slabs — plan accordingly.
• Check DST registration requirements if you provide digital services to Nepal-based clients.

For Businesses

• Review your VAT registration status and e-invoice / CBMS compliance obligations.
• Verify updated TDS deduction rates for all payment types relevant to your business.
• If you import goods, review the updated 7-tier customs tariff schedule for your HS codes.
• Check whether the tax settlement scheme applies to any pending disputes.
• Ensure ride-sharing or digital-service platforms are withholding and remitting VAT/advance tax correctly.

For Investors & Share Traders

• Check the updated CGT rates for listed securities (short-term and long-term holding periods). Verify rates against IRD notices, as the applicable rate depends on your holding period.
• Use our NEPSE WACC Calculator for cost-of-capital analysis under revised CGT.
• If you sold property during FY 2083/84, check the applicable real-estate CGT rate based on holding period.

For Taxpayers with Old Disputes

• Determine whether your liability falls under the one-time settlement scheme.
• Calculate the principal tax + 1% settlement fee.
• Check the exact deadline for your specific provision (general: Poush 30, 2083).
• Confirm with the IRD before making any payment.

This checklist is for informational purposes only. Tax obligations depend on individual circumstances. Consult a registered tax adviser or the IRD for compliance decisions.