Deduction from Salary in Nepal

The assessable income of a person for an income-year from any employment, business, or investment is the person’s income from the employment in Nepal. The taxable income of a person for an income-year is equal to the amount as calculated by subtracting reduction.

The taxable income of a resident individual for an income-year will be taxed at the following rates:

Up to Rs.100, 000 - Not taxable

From Rs.100,000 - upto Rs.1,75,000- @ 15 %

Above Rs. 1,75,000 - @ 25% plus Rs.11250.

The taxable income of a couple, if they chose to be treated as a couple will be taxed at the following rates;

Up to Rs.125,000 - Not taxable

From Rs.125,000 - upto Rs.2,00,000- @ 15 %.

Above Rs. 2,00,000 - @ 25% plus Rs.11250.

Any individual working in a prescribed remote area is entitled to deduct prescribed amount as remote area allowance from taxable income. Check with the income tax department for more details. Any individual is entitled to deduct the following amount from taxable amount, if he is having investment insurance policy : Rs. 10,000 or 7% of insured amount or the actual premium paid, which ever is less.

The repatriated income of a foreign permanent establishment of a non-resident person situated in Nepal will be taxed at the rate of 10%.