--- name: nepal-tds description: "ALWAYS read this skill before touching any Nepal TDS / withholding tax work. Use whenever asked to compute or deduct Nepal withholding tax (TDS) on rent, interest, dividends, service/contract payments, or payments to non-residents under the Income Tax Act 2058. Trigger on phrases like \"Nepal TDS\", \"Nepal withholding\", \"TDS rates Nepal\", \"Section 88 Nepal\", \"rent TDS Nepal 10%\", \"dividend TDS Nepal 5%\", \"interest TDS Nepal 6%\", \"contract TDS Nepal 1.5%\", or \"FY 2082/83 TDS\". Out of scope — personal income tax computation (separate skill), corporate tax (separate skill), payroll/SSF salary TDS (use the payroll skill), and VAT." license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)" metadata: source: openaccountants openaccountants_url: "https://www.openaccountants.com/skills/nepal-tds" jurisdiction: "NP" tax_year: "2025" last_updated: "2026-07-13" reviewed_by: "Ashish Bista" review_status: "current" --- # Nepal Tds ## Nepal — TDS / Withholding Tax — Skill v1.0 > **Produced by OpenAccountants (openaccountants.com).** Research-grade (tier 2) for FY 2082/83. **Source provenance:** figures derive from Nepali professional-firm publications (PKF T.R. Upadhya, Union Nepal) reflecting the Income Tax Act 2058 §87–§88 and Finance Act 2082 — not re-anchored to primary IRD pages. A Nepali CA must confirm against the statute before reliance. Not tax advice. ## Verified rates & thresholds (accountant-reviewed) > Reviewed against the cited tax authorities by **Ashish Bista** on 2026-06-06. > Items flagged for further clarification are tracked separately and excluded here. > This block is generated from verified `skill_facts` — edit the facts, not the prose. ### TDS (Withholding) - **Rent (paid by a resident person)** — 10% _(Income Tax Act 2058 s.88 (PKF s.7.1))_ - **Dividend (resident company/partnership)** — 5% (resident AND non-resident) _(PKF s.7.1)_ - **Interest (Nepal source) — natural person not in business** — 6% _(PKF s.7.1; Union Nepal)_ - **Interest (Nepal source) — entities** — 15% _(PKF s.7.1)_ - **Contract/agreement payment to a non-resident** — 5% _(PKF s.7.1)_ - **Resident contract/supply payments exceeding NPR 50,000** — 1.5% _(PKF s.7.1)_ - **Flat 15% Section 88 on interest/rent/service** — REFUTED — do not use; the effective rates above govern _(PKF s.7.1)_ - **10% dividend TDS** — 5% (10% figure refuted) _(PKF s.7.1)_ - **Non-resident service/royalty/technical fees + DTAA** — 15% standard TDS (subject to lower rates if a DTAA applies) _(Income Tax Act 2058 s.88)_ - **TDS deposit / return due dates** — 25th of the following Nepali month _(Income Tax Act 2058 s.90)_ - **Consultancy & Service Fees (Resident)** — 1.5% (if VAT registered) / 15% (if not VAT registered) _(Income Tax Act 2058 s.88)_ - **Freight & Transportation Services** — 1.5% (if VAT registered) / 2.5% (if not VAT registered) _(Income Tax Act 2058 s.88)_ - **Windfall Gains (Prizes, Lottery)** — 25% (Final withholding) _(Income Tax Act 2058 s.88)_ ## Section 1 — Quick reference (rates, FY 2082/83 — "no change" from FY 2024-25) **Payment type / Rate / Notes** | Payment type | Rate | Notes | | --- | --- | --- | | **Rent** (paid by a resident person) | **10%** | | | **Dividend** (paid by resident company / partnership) | **5%** | Same to resident AND non-resident | | **Interest** (Nepal source, from resident banks / FIs / cooperatives / debenture issuers / listed companies) | **6%** to a natural person (not in business); **15%** to entities | | | **Contract / agreement payment to a non-resident** | **5%** | | | **Contract payments exceeding NPR 50,000** | **1.5%** | Resident contract/supply payments | **Field / Value** | Field | Value | | --- | --- | | Country / authority | Nepal — Inland Revenue Department (IRD), ird.gov.np | | Statute | Income Tax Act 2058 (2002) §87–§88, as amended by Finance Act 2082 | | Income year | Shrawan 1 – Ashad end (BS); FY 2082/83 | | Validated by | Pending — Nepali CA / registered tax practitioner | | Skill version | 1.0 | > **Refuted / do NOT use:** a flat 15% Section 88 TDS on interest/rent/service, and a 10% dividend TDS — both appear in some secondary commentary but were adversarially refuted; the effective FY 2082/83 rates above govern. ### Conservative defaults **Ambiguity / Default** | Ambiguity | Default | | --- | --- | | Recipient natural person vs entity (interest) | Treat as entity (15%) and flag | | Resident vs non-resident recipient | Flag; non-resident service/royalty/technical fees beyond the 5% contract rate are VERIFY | | Contract payment near NPR 50,000 threshold | Apply 1.5% if it exceeds 50,000 | ## Section 2 — Refusal catalogue - **R-NP-TDS-1 — Salary TDS** — Employment withholding sequences with SSF — use `nepal-payroll`. - **R-NP-TDS-2 — Non-resident service/royalty/technical fees + DTAA** — Beyond the 5% non-resident contract rate, the full non-resident Section 88 schedule and treaty overrides were NOT established — VERIFY; escalate. - **R-NP-TDS-3 — Full Section 88 schedule** — Many payment categories exist beyond those listed; this skill covers the common ones. Confirm the full §88 table for FY 2082/83. ## Section 3 — Tier 1 rules - **Tier 1 rules intro** — ### 3.1 Rent — 10% - **Rent** — TDS of 10% on rent paid by a resident person. ### 3.2 Dividend — 5% - **Dividend** — TDS of 5% on dividends paid by a resident company/partnership — to both resident and non-resident recipients. ### 3.3 Interest — 6% / 15% - **Interest** — On Nepal-source interest paid by resident banks, financial institutions, cooperatives, debenture issuers, or listed companies: 6% to a natural person who is not deriving the interest in the course of business; 15% to entities. ### 3.4 Contracts - **Contracts** — Payment under a contract/agreement to a non-resident: 5%. Resident contract/supply payments exceeding NPR 50,000: 1.5%. **Source:** PKF Trunco "Tax Rates 2082-83" §7.1 (each marked "No change"); Union Nepal TDS guide. _(PKF Trunco "Tax Rates 2082-83" §7.1; Union Nepal TDS guide)_ ## Section 4 — Worked examples - Rent NPR 200,000 to a resident landlord → TDS = 10% × 200,000 = **NPR 20,000**. - Bank interest NPR 100,000 to an individual (not in business) → TDS = 6% × 100,000 = **NPR 6,000**. - Dividend NPR 500,000 → TDS = 5% × 500,000 = **NPR 25,000**. - Resident supply contract NPR 300,000 → TDS = 1.5% × 300,000 = **NPR 4,500**. ## Section 5 — Filing TDS is deducted at payment and deposited to the IRD with a credit certificate to the payee. **Deposit/return due dates — VERIFY** against the IRD calendar (not established by the research). ## Section 6 — Sources Research-grade, FY 2082/83. **Secondary firm publications — re-anchor to primary IRD/statute (§87–§88):** 1. PKF T.R. Upadhya & Co. "Tax Rates 2082-83" §7.1 — https://pkf.trunco.com.np/files/publications/1748841198_Tax%20Rates%202082-83_Final_250601_213028.pdf 2. Union Nepal — TDS in Nepal — https://unionnepal.com/tds-in-nepal 3. Income Tax Act 2058 (2002) §88 — confirm at https://ird.gov.np **Known gaps / VERIFY:** full §88 schedule; non-resident service/royalty/technical-fee rates + DTAA; deposit/return due dates. ## Prohibitions - NEVER use the refuted flat 15% (interest/rent/service) or 10% dividend rates — use the rates in §1. - NEVER apply the 6% interest rate to an entity recipient — entities are 15%. - NEVER assert non-resident service/royalty/technical-fee TDS this skill flags as VERIFY. - NEVER present these as primary-IRD-confirmed — flag for verifier re-anchoring. - NEVER file or instruct filing — working paper for practitioner review only. ## Disclaimer For informational and computational purposes only; not tax, legal, or financial advice. All outputs must be reviewed and signed off by a qualified Nepali professional (CA / registered tax practitioner) before filing or acting upon. Latest verified version at [openaccountants.com](https://openaccountants.com). --- ## Talk to a verified accountant This guide is maintained by the OpenAccountants network — accountants who put their name behind the tax answers AI gives people. The live, always-current version (and the professional behind it) is at [openaccountants.com](https://www.openaccountants.com). - Use it in your AI: https://www.openaccountants.com/connect - Meet the accountants: https://www.openaccountants.com/network > **General reference only.** This document does not constitute tax, legal, or > financial advice. Verify figures against the cited primary sources or with a > licensed professional before relying on them. ## Today's figures and who stands behind this skill This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-07-13. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `nepal-tds` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/nepal-tds. If neither is available, confirm every figure against the official source pages cited above before relying on it.