How to File Income Tax in Nepal 2025

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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