Introduction

Filing income tax in Nepal is mandatory for all individuals and businesses earning above the taxable limit. With the fiscal year 2025/26 approaching, it’s crucial to understand the process, documents required, and deadlines. This guide provides a step-by-step process for filing income tax in Nepal 2025, including e-filing tips and common mistakes to avoid.

Step 1: Determine Your Tax Liability

  1. Check your annual income from salary, business, or other sources.

  2. Verify the tax slabs for 2025 (as per Inland Revenue Department):

    • Income up to NPR 400,000 – 1%

    • NPR 400,001 to 500,000 – 10%

    • NPR 500,001 to 700,000 – 20%

    • NPR 700,001 to 2,000,000 – 30%

    • Above NPR 2,000,000 – 36%

(Note: Slabs are indicative; always confirm from the official IRD site.)

Step 2: Collect Required Documents

  • PAN (Permanent Account Number) certificate

  • Citizenship certificate or legal ID

  • Salary slips or business income records

  • Bank statements

  • Investment proofs, if claiming deductions

  • Previous year tax return (if applicable)

Step 3: Choose the Filing Method

  1. Online e-Filing (preferred):

    • Visit the official IRD e-filing portal: https://www.ird.gov.np

    • Register/login with your PAN

    • Fill in your income details, deductions, and tax paid

    • Submit and download the acknowledgment

  2. Manual Filing:

    • Visit your local Inland Revenue Office

    • Fill out the appropriate tax return form (ITR-1, ITR-2, etc.)

    • Submit with all documents

Step 4: Calculate and Pay Tax

  • Use the IRD tax calculator for accurate computation

  • Pay remaining tax (if any) online via bank or at the revenue office

  • Keep payment receipts for future reference

Step 5: Submit and Confirm

  • After submission, ensure you receive an acknowledgment receipt

  • Store copies of the submitted return and receipts safely

Common Mistakes to Avoid

  • Incorrect PAN or personal details

  • Missing income sources or underreporting

  • Forgetting deductions or claiming ineligible deductions

  • Late submission (penalties apply)

Tips for Easier Tax Filing

  • Maintain digital records of salary slips, invoices, and receipts

  • File your return early to avoid last-minute rush

  • Use IRD’s e-filing tutorials and helpdesk if needed

  • Keep updated on changes in tax slabs or rules annually

Conclusion
Filing income tax in Nepal 2025 is straightforward if you follow the steps carefully. Whether salaried or self-employed, staying organized and using the IRD e-filing system will save time and ensure compliance.

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