Compliance
The female taxpayer rebate and the disability exemption band
Both reliefs attach to the taxpayer rather than to a payment, and they are applied at different points in the calculation — one to income, one to tax.
Updated August 2026
Most tax reliefs in Nepal attach to something the employee pays — a retirement contribution, an insurance premium. Two attach to the taxpayer instead, and they are applied at different stages of the calculation.
The female taxpayer rebate
A female taxpayer receives a rebate of 10% on the tax computed across the bands. It is applied last — after the bands have been worked through — and reduces the tax figure rather than the income figure.
Order matters here. Applying a 10% reduction to income before the bands produces a different and incorrect result, because the bands are progressive.
| Step | Amount |
|---|---|
| Tax computed across all bands | NPR 20,720.00 |
| Rebate at 10% | − NPR 2,072.00 |
| Annual TDS payable | NPR 18,648.00 |
| Monthly TDS | NPR 1,554.00 |
The wider exemption band for disability
An employee with a disability has the first exemption band widened by 50%. For FY 2083/84 that moves the opening band from the first NPR 10,00,000 of taxable income to the first NPR 15,00,000.
Every subsequent band shifts up by the same amount rather than changing width, so the 10% band begins at NPR 15,00,000 rather than at NPR 10,00,000, and so on up the schedule.
| Band | Standard | With disability relief |
|---|---|---|
| First band | 0 – 10,00,000 | 0 – 15,00,000 |
| 10% band | 10,00,000 – 15,00,000 | 15,00,000 – 20,00,000 |
| 20% band | 15,00,000 – 25,00,000 | 20,00,000 – 30,00,000 |
| 27% band | 25,00,000 – 40,00,000 | 30,00,000 – 45,00,000 |
| 29% band | Above 40,00,000 | Above 45,00,000 |
When both apply
The two reliefs are independent and can apply together. The wider band is applied first, when the bands are worked through, and the rebate is applied afterwards to whatever tax those bands produce.
What payroll needs to record
- Both attributes belong on the employee master record, not on a payroll run, since they persist across periods.
- Both feed the annual tax projection, so a change part-way through the year requires the projection to be rebuilt and the remaining months adjusted.
- Supporting documentation for a disability relief should be held on the employee record.
- Neither relief affects retirement contributions, which are computed on basic salary regardless.
Frequently asked questions
Is the female tax rebate applied to income or to tax?
To tax. The bands are worked through first, and the 10% rebate is then applied to the resulting tax figure. Applying it to income before the bands produces a different and incorrect answer.
Do the two reliefs stack?
Yes. They apply at different points — the wider exemption band changes how the bands are worked through, and the rebate then reduces the tax those bands produce.