TAX RATE FOR ENTITY

FOR THE INCOME YEAR 2079/2080

Section Entity Normal Rebate on Effective Remarks

Tax Rate Tax Rate Tax Rate
Cooperatives registered and carrying
out transaction under Cooperative Act,
2074 except those carrying out
transaction with tax exemption
Schedule 1 a. Metropolitan Area 20% 25% 15%
Section 2(3)
Schedule 1 b. Sub Metropolitan Area 20% 50% 10%
Section 2(3)
Schedule 1 c. Municipality Area 20% 62.5% 7.5%
Section 2(3)
Section 11(2) d. Others 20% 100% 0%
i. Agriculture & Forest Products
ii. Forestry Related Business
iii. Rural Based Cooperative doing
financial transaction
Section 11(2) Dividend distributed by Such 5% 100% 0%
Cooperative Societies
Section Special Industry (Fully Operated) 25% 20% 20% 1. Special industry means a manufacturing
11(2kha) industry, agricultural & forest based and
mineral industry other than an industry
producing cigarettes, bidi, cigar, chewing
tobacco, khaini, gutkha, pan masala or
other goods of a similar nature using
tobacco as the basic raw material, or
alcohol, beer, or other goods of a similar
nature.
2. Special industry is also eligible if any for
another tax rebate as per Section 11.
Section Special industry providing direct
11(3)(ka) employment throughout the year
a. 100 or more Nepalese Citizens 20% 10% 18%
b. 300 or more Nepalese Citizens 20% 20% 16%
c. 500 or more Nepalese Citizens 20% 25% 15%
d. 1000 or more Nepalese Citizens 20% 30% 14%
Section Special industry providing direct
11(3)(ka) employment throughout the year of
which at least 1/3 are women,
oppressed or incapacitated
a. 100 or more Nepalese Citizens 18% 10% 16.80%
b. 300 or more Nepalese Citizens 16% 10% 14.40%
c. 500 or more Nepalese Citizens 15% 10% 13.50%
d. 1000 or more Nepalese Citizens 14% 10% 12.60%
Section Information Technology industry
11(3)(ka) providing direct employment
throughout the year
a. 100 or more Nepalese Citizens 25% 10% 22.50%
b. 300 or more Nepalese Citizens 25% 20% 20%
c. 500 or more Nepalese Citizens 25% 25% 18.75%
d. 1000 or more Nepalese Citizens 25% 30% 17.50%
Section Information Technology industry
11(3)(ka) providing direct employment
throughout the year of which at least
1/3 are women, oppressed or
incapacitated
a. 100 or more Nepalese Citizens 22.50% 10% 20.25%
b. 300 or more Nepalese Citizens 20% 10% 18%
c. 500 or more Nepalese Citizens 18.75% 10% 16.875%
d. 1000 or more Nepalese Citizens 17.50% 10% 15.75%
Prepared By : Ajay Shah / CA Aspirants - ICAN

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TAX RATE FOR ENTITY

FOR THE INCOME YEAR 2079/2080

Section Entity Normal Rebate on Effective Remarks

Tax Rate Tax Rate Tax Rate
Special industries established in hilly districts of Sudurpashchim
Section Special industries starting commercial Province providing employment to more than 100 Nepali citizens
11(3)(kha) operation for the first 10 Years in shall be exempted from income tax for 15 years from the date of
starting the transaction
a. Very undeveloped (Remote) area 20% 90% 2%
b. Undeveloped area 20% 80% 4%
c. Under/Less developed area 20% 70% 6%
Section New Special industry & tourism No need to be a Nepali Citizen
11(3)(ga) industry (other than casino) with
capital investment of more than Rs.1
Billions and employing 500 individuals
during the whole year
a. First 5 Years 20%/25% 100% 0%
b. Next 3 Years 20%/25% 50% 10%/12.5%
Section Existing Special industry & tourism No need to be a Nepali Citizen
11(3)(ga) industry (other than casino) if increases
installed capacity by 25% and make
capital investment to Rs. 2 Billions and
providing direct employment to 300
individuals during the whole year
a. First 5 Years 20%/25% 100% 0%
b. Next 3 Years 20%/25% 50% 10%/12.5%
Section Industries established in Special
11(3ka) economic Zone (SEZ)
1. Special Industry
a. Himali Districts & GON prescribed
Hilly Districts
i. First 10 Years 20% 100% 0%
ii. Thereafter 20% 50% 10%
b. Other Areas
i. First 5 Years 20% 200% 0%
ii. Thereafter 20% 50% 10%
2. Other Industry
a. Himali Districts & GON prescribed
Hilly Districts
i. First 10 Years 25%/30% 100% 0%
ii. Thereafter 25%/30% 50% 12.5%/15%
b. Other Areas
i. First 5 Years 25%/30% 100% 0%
ii. Thereafter 25%/30% 50% 12.5%/15%
Section Dividend distributed by industry
11(3ka)(ga) established in SEZ
i. First 5 Years 5% 100% 0%
ii. Next 3 Years 5% 50% 2.5%
Section Income from foreign technology, 15% 50% 7.5%
11(3)(ka)(gha) management service fee and royalty
earned by foreign investor from
industries established in SEZ
Section Person transacting on minerals,
11(3kha) research & exploration of petroleum
products, Natural gas & Fuel. If
business operation starts within 2080
chaitra end
i. First 7 Years 25% 100% 0%
ii. Next 3 Years 25% 50% 12.5%
Section Industry related with software 25% 50% 12.5%
11(3ga) development, data processing, cyber
café,digital mapping established in IT
park, Zoological park,Geological
Park,Biotech park & IT park prescribed
by GON through publishing in Nepal
Gazette.
Prepared By : Ajay Shah / CA Aspirants - ICAN

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TAX RATE FOR ENTITY

FOR THE INCOME YEAR 2079/2080

Section Entity Normal Rebate on Effective Remarks

Tax Rate Tax Rate Tax Rate
Section Commercial commencement within However, the provision at time of getting
11(3gha) 2080 Chaitra of Generation, the license will be applicable for a licensed
transmission, or distribution of hydro person who has already commenced
electricity by a person licensed for commercial operation at the time of
generation, transmission, distribution introduction of this sub section.
of electricity. Similar facility will be
available for electricity generated from
solar,wind & Bio Product.
i. First 10 Years 25% 100% 0%
ii.Next 5 Years 25% 50% 12.5%
Section 1. Income from Export having source
11(3nga) in Nepal during any Income Year
a. Special Industry 20% 20% 16%
b. Other Industries 25% 20% 20% As mentioned in schedule 1 sec 2(1)
c. Other Industries 30% 20% 24% As mentioned in schedule 1 sec 2(2)
2. Income from export of manufactured
goods by manufacturing based
industry having source in Nepal
a. Special Industry 16% 50% 8% Effective rate as mentioned above will be
Normal Rate.
b. Other Industries 20% 50% 10% As mentioned in schedule 1 sec 2(1)
c. Other Industries 24% 50% 12% As mentioned in schedule 1 sec 2(2)
Section Earning income for First 10 years from
11(3cha) the date of commencement from
following Activity
i. Operation of any trolley bus, or tram 25% 40% 15%
ii. Operation of any ropeway, cable 25% 40% 15%
car, sky bridge after construction
iii. Operating after construction of 25% 50% 12.5%
Road, Bridge, Tunnel way, Tunnel,
Railway, Airport
Section Manufacturing, tourism, hydro
11(3chha) electricity generation, distribution and
transmission entities & Industry
related with software development,
data processing, cyber café,digital
mapping established in IT park,
Zoological park,Geological
Park,Biotech park & IT park
If Listed in Stock Exchange
i. Special Industry 20% 15% 17%
ii. Other General Industry 25% 15% 21.25%
Section 11(3ja) Fruit based industry manufacturing 15% 50% 7.5%
brandy, cider, and wine for 10 Years
from commencement of Operation in
i. Very Undeveloped Area 30% 40% 18%
ii. Undeveloped Area 30% 25% 22.5%
Section Royalty income from Export of 25% 25% 18.75%
11(3jha) Intellectual property
Section Income from sale of Intellectual 25% 50% 12.5%
11(3yna) property
Section 11 Tourism related industry or an airlines
(3tta) company carrying out international
flights establishing on capital
investment to Rs. 2 Million
i. First 5 Years 25% 100% 0%
ii. Next 3 Years 25% 50% 12.5%
Section 11 Dividend tax on capitalization of 5% 100% 0%
(3thha) accumulated profit through bonus
share by Special Industry & Industry
related with tourism for expansion of
capacity of industry
Prepared By : Ajay Shah / CA Aspirants - ICAN

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TAX RATE FOR ENTITY

FOR THE INCOME YEAR 2079/2080

Section Entity Normal Rebate on Effective Remarks

Tax Rate Tax Rate Tax Rate
Section Conversion of any operating private However, the public company established
11(3dda) company having paid up capital of under Section 12 of companies act, 2063
Rs.50 Crores or more into any Public will not enjoy the benefit provided under
company for Subsequent 3 Years of this sub section..
i. Special Industry 20% 10% 10%
ii. Other Industries 25% 10% 22.5% As mentioned in schedule 1 sec 2(1)
iii. Other Industries 30% 10% 27% As mentioned in schedule 1 sec 2(2)
Section Income earned from the sale of its
11(3ddha) products by the Domestic Tea
Manufacturing & Processing Industry,
Industry dealing in Dairy products,
Textile manufacturing Industry
a. Special Industry 20% 50% 10%
b. Other Industries 25% 50% 12.5% As mentioned in schedule 1 sec 2(1)
Section Health Institution Operated by 25% 20% 20%
11(3nna) Community

Section 11(3ta) Income of Micro Enterprises Micro industry means the industry
classified under sec 17(1)(a) of Industrial
Enterprises Act, 2076
1. Special Industry
a. Owned by Woman (for 10 Years) 20% 100% 0%
b. Owned other than by Female (for 7 20% 100% 0%
Years)
2. Other Industry As mentioned in schedule 1 sec 2(1)
a. Owned by Woman (for 10 Years) 25% 100% 0%
b. Owned other than by Female (for 7 25% 100% 0%
Years)
3. Other Industry As mentioned in schedule 1 sec 2(2)
a. Owned by Woman (for 10 Years) 30% 100% 0%
b. Owned other than by Female (for 7 30% 100% 0%
Years)
Section Entity wholly engaged in the projects 25% 20% 20%
11(3ttha) conducted by any entity so as to build
public infrastructure, own,
operate,and transfer it to GON and in
power generation, transmission or
distribution
Section Special industry operating after
11(3da) incorporating or shifting in industrial
area or Rural industrial area
i. For First 3 Years 20% 50% 10%
ii. Next 5 Years 20% 25% 15%
Section Income from sale of Raw material or
11(3dha) subsidiary raw material, produced
within country to Special Industry
a. Special Industry 20% 20% 16%
b. Other Industry 25% 20% 20%
Section 11 Startup Business as prescribed by 25% 100% 0% Upto 5 years from date of commencement
(3Na) department established by utilizing
innovative knowledge, concept, skill,
technology, system having annual
transaction upto Rs. 1 Crore
Section 11 Special industry which is in operation
(3pa) in Kathmandu Valley is shifted and
operated outside Kathmandu Valley
i. First 3 Years 20% 100% 0%
ii. Next 2 Years 20% 50% 10%
Prepared By : Ajay Shah / CA Aspirants - ICAN

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TAX RATE FOR ENTITY

FOR THE INCOME YEAR 2079/2080

Section Entity Normal Rebate on Effective Remarks

Tax Rate Tax Rate Tax Rate
Section 11(3fa) If an industry produces a new product
by utilizing only used materials that
directly affects the environment as raw
material
i. First 3 Years 20% 50% 10%
ii. Next 2 Years 20% 25% 15%
Section Industries manufacturing Health
11(3ba) Vaccine, Oxygen Gas, Sanitary Pad
i. First 5 Years 20% 100% 0%
ii. Next 2 Years 20% 50% 10%
Section Industry established for the purpose 20% 40% 12% For 5 years from the date of
11(3bha) of manufacturing & assembling commencement
electric vehicles by month of 2082
Ashadh
Section Industry established for the purpose 20% 100% 0% For 5 years from the date of
11(3ma) of producing Agricultural tools commencement
Schedule 1 General companies/firms/industries 25% - 25%
Section 2(1) (not listed below)
Schedule 1 Bank & Financial Institutions 30% - 30%
Section 2(2)
“ General Insurance Companies 30% - 30%
“ Petroleum Products as per Nepal 30% - 30%
Petroleum Act 2040
“ Person carrying business of cigarette, 30% - 30%
bidi, cigar, chewing tobacco, liquor,
beer
“ Money Transfer 30% - 30%
“ Security Market 30% - 30%
“ Merchant Banking 30% - 30%
“ Capital Market Business 30% - 30%
“ Operating commodity future market 30% - 30%
“ Commodity & Security Broker 30% - 30%
Schedule 1 Repatriation of income by foreign 5% - 5% On repatriated amount.
Section 2(6) permanent establishment
Schedule 1 Incomes earned from operation of 5% - 5%
Section 2(7) water transport, charter service or air
transport where the departure is from
Nepal or by operating a cable, radio,
optical fiber, or earth satellite
communication business from the
transmission of News or information
through the equipment installed in
Nepal
“ Incomes earned from providing air 2% - 2%
transport or telecommunication
services outside the territory of Nepal,
the first point of departure being
outside Nepal
Prepared By : Ajay Shah / CA Aspirants - ICAN

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TAX RATE FOR NATURAL PERSON

FOR THE INCOME YEAR 2079/2080

1. Normal Rate
A. Single Natural Person
Section Taxable Income Slab Tax Rate Exemption Effective Tax Remarks
Rate
Schedule 1 First Rs. 500000 (Social Security 1% - 1% Proprietorship
Section 1(1) Tax) firm/Business/Investment/Pension
Income/If such individual makes
contribution to contribution based
pension fund/Social security fund
{1% SST is not levied}
Next Rs. 200000 10% - 10%
Next Rs. 300000 20% - 20%
Next Rs. 1000000 30% - 30%
Balance 36% - 36% If the income of any person exceeds
20 lakhs then additional 20% tax is
levies on marginal tax rate.
B. Couple filing under Section 50
Schedule 1 First Rs. 600000 (Social Security 1% - 1% Proprietorship
Section 1(2) Tax) firm/Business/Investment/Pension
Income/If such individual makes
contribution to contribution based
pension fund/Social security fund
{1% SST is not levied}
Next Rs. 200000 10% - 10%
Next Rs. 300000 20% - 20%
Next Rs. 900000 30% - 30%
Balance 36% - 36% If the income of any person exceeds
20 lakhs then additional 20% tax is
levies on marginal tax rate.
2. Gain on NBCA (Non Business Chargeable Assets)
Section Particulars Tax Rate Exemption Effective Tax Ramarks
Rate
Schedule 1 I. Disposal of Land & Buildings
Section 1(3), (4)
Owned for more than or equal 5% - 5%
to 5 Years
Owned for less than 5 Years 7.5% - 7.5%
II. Listed Shares
Owned for more than 365 Days 5% - 5%
Owned for Less than or Equal 7.5% - 7.5%
to 365 Days
Prepared By : Ajay Shah / CA Aspirants - ICAN

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TAX RATE FOR NATURAL PERSON

FOR THE INCOME YEAR 2079/2080

3. Special Tax Rates for Natural Person

I. Income from Special Industry fully operated during any Income Year
A. Single Natural Person
Section Taxable Income Slab Tax Rate Exemption as Effective Tax Remarks
per Section Rate
11(2kha)
Schedule 1 First Rs. 500000 (Social Security 1% - 0% -
Section 1(1) Tax)
Next Rs. 200000 10% - 10%
Next Rs. 300000 20% - 20%
Next Rs. 1000000 30% 1/3 of Tax
rd 20%
Rate
Balance 36% 1/3rd of Tax 24% If the income of any person exceeds
Rate 20 lakhs then additional 20% tax is
levies on marginal tax rate.
B. Couple filing under Section 50
Schedule 1 First Rs. 600000 (Social Security 1% - 0%
Section 1(2) Tax)
Next Rs. 200000 10% - 10%
Next Rs. 300000 20% - 20%
Next Rs. 900000 30% 1/3rd of Tax 20%
Rate
Balance 36% 1/3rd of Tax 24% If the income of any person exceeds
Rate 20 lakhs then additional 20% tax is
levies on marginal tax rate.
II. Income from export having source in Nepal during any Income Year
A. Single Natural Person
Section Taxable Income Slab Tax Rate Exemption as Effective Tax Remarks
per Section Rate
11(3nga)(ka)
Schedule 1 First Rs. 500000 (Social Security 1% - 0% -
Section 1(1) Tax)
Next Rs. 200000 10% - 10%
Next Rs. 300000 20% 25% 15%
Next Rs. 1000000 30% 50% 15%
Balance 36% 50% 18% If the income of any person exceeds
20 lakhs then additional 20% tax is
levies on marginal tax rate.
B. Couple filing under Section 50
Schedule 1 First Rs. 600000 (Social Security 1% - 0%
Section 1(2) Tax)
Next Rs. 200000 10% - 10%
Next Rs. 300000 20% 25% 15%
Next Rs. 900000 30% 50% 15%
Balance 36% 50% 18% If the income of any person exceeds
20 lakhs then additional 20% tax is
levies on marginal tax rate.
Prepared By : Ajay Shah / CA Aspirants - ICAN

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TAX RATE FOR NATURAL PERSON

FOR THE INCOME YEAR 2079/2080

3. Special Tax Rates for Natural Person

III. Income from Export of Mfgd. Goods by mfg.ing based industry having source in Nepal during any Income Year
A. Single Natural Person
Section Taxable Income Slab Tax Rate Exemption as Effective Tax Remarks
after per Section Rate
Exemption 11(3nga)(ga)
in Section
11(3nga)(ka)
Schedule 1 First Rs. 500000 (Social 0% - 0% -
Section 1(1) Security Tax)
Next Rs. 200000 10% - 10%
Next Rs. 300000 15% 50% 7.5%
Next Rs. 1000000 15% 50% 7.5%
Balance 18% 50% 9% If the income of any person
exceeds 20 lakhs then additional
20% tax is levies on marginal tax
rate.
B. Couple filing under Section 50
Schedule 1 First Rs. 600000 (Social 0% - 0%
Section 1(2) Security Tax)
Next Rs. 200000 10% - 10%
Next Rs. 300000 15% 50% 7.5%
Next Rs. 900000 15% 50% 7.5%
Balance 18% 50% 9% If the income of any person
exceeds 20 lakhs then additional
20% tax is levies on marginal tax
rate.
Prepared By : Ajay Shah / CA Aspirants - ICAN