KATHMANDU, May 29:The government has unveiled a revised income tax structure for the upcoming Fiscal Year (FY) 2026/27, introducing a progressive rate system based on annual earnings.
Under the new arrangement, individuals earning up to Rs 10 lakh per year will be subject to a 1 percent income tax. Income between Rs 10 lakh and Rs 15 lakh will be taxed at 10 percent on the additional Rs 5 lakh.
Revised interest rate corridor system introduced
Similarly, income between Rs 15 lakh and Rs 25 lakh will attract a 20 percent tax on the additional Rs 10 lakh. Earnings between Rs 25 lakh and Rs 40 lakh will be taxed at 27 percent on the additional Rs 15 lakh.
For individuals earning above Rs 40 lakh annually, a 29 percent income tax rate will apply.
The government said the revised structure is aimed at maintaining a progressive taxation system, ensuring higher earners contribute a greater share of tax revenue. The new rates will come into effect from the next fiscal year.
