Nepal TDS Calculator — Tax Deducted at Source 2082/83
Calculate TDS on rent, service fees, interest, dividends, capital gains, and other payments in Nepal.
What is TDS?
Tax Deducted at Source (TDS) is a system of collecting income tax in Nepal where the payer deducts a specified percentage of tax before making a payment to the payee. The deducted amount is deposited to the Inland Revenue Department (IRD) on behalf of the payee. This mechanism ensures regular tax collection and reduces the burden of lump-sum tax payment at year end.
TDS Rates Table 2082/83
| Payment Type | Individual Rate | Entity Rate |
|---|---|---|
| Salary | As per tax slab | N/A |
| Rent | 10% | 15% |
| Service Fee | 15% | 15% |
| Interest | 15% | 15% |
| Dividend | 5% | 5% |
| Capital Gains | 10% | 10% |
| Commission / Agency | 15% | 15% |
| Contract Payment | 1.5% | 1.5% |
How TDS Works in Nepal
When a person or organization makes certain types of payments (rent, service fees, interest, etc.), they are legally required to deduct a percentage of the payment as tax before releasing the funds. The deducted amount must be deposited to the IRD within 25 days of the following month. The payee receives a TDS certificate which can be used to claim credit against their annual tax liability.
For salary payments, TDS is calculated based on the employee's estimated annual income using the progressive tax slabs. The annual tax amount is divided by 12 and deducted monthly from the salary.
What is TDS in Nepal?
Tax Deducted at Source (TDS) is a method of collecting income tax in Nepal at the point where income is generated, rather than waiting until the end of the fiscal year. Under this system, the person or organization making a payment is legally responsible for deducting a prescribed percentage of tax before releasing the payment to the recipient. The deducted tax is then deposited directly to the Inland Revenue Department (IRD) on behalf of the income earner. TDS applies to a wide range of payments including salaries, rent, contract payments, interest, dividends, and professional service fees. For salaried employees, the employer calculates the estimated annual tax liability based on projected yearly income, divides it by 12, and deducts that amount from each monthly salary payment. This ensures a steady flow of tax revenue to the government and reduces the burden on taxpayers at year end.
Common TDS Rates in Nepal
TDS rates in Nepal vary depending on the type of payment and whether the recipient is an individual or an entity. For salary payments, TDS is calculated according to the progressive income tax slabs rather than a flat rate. Rent payments attract a TDS rate of 10% for both individuals and entities. Interest income from banks and financial institutions is subject to 5% TDS for individuals and 15% for entities. Dividend payments carry a 5% TDS rate across the board. Professional service fees and consultancy payments are taxed at 15% when paid to individuals and entities alike. Contract and commission payments typically attract 1.5% TDS for individuals. Capital gains from the sale of shares and securities are subject to 5–10% TDS depending on whether the shares are listed or unlisted. Understanding these rates helps businesses ensure compliance and helps recipients estimate their net income after tax deductions.