Inland Revenue Department (IRD)आन्तरिक राजस्व विभाग
The Inland Revenue Department is Nepal's tax administration, responsible for income tax, VAT and excise. For payroll it is the body that publishes the tax slabs, issues PANs, receives monthly withholding deposits and defines the eTDS format.
Also called: IRD, IRD Nepal, tax office Nepal, ird.gov.np
Key facts
- Responsible for
- Income tax, VAT, exciseNepal's tax administration.
- Publishes
- Annual tax slabsFollowing each year's budget.
- Issues
- PAN registrationsPersonal and business.
- Defines
- The eTDS formatThe layout withholding returns must follow.
What payroll deals with the IRD for
- Tax slabs and rates for each fiscal year, which change with the budget and drive every TDS calculation.
- PAN registration for the company and, indirectly, for each employee.
- The monthly deposit of tax withheld from salaries, due within 25 days of the month ending.
- The eTDS return, which reports what was withheld and for whom, in the layout the IRD specifies.
The rhythm of the payroll year
The Nepali fiscal year runs from Shrawan to Ashad. The budget, and with it any change to the slabs, lands before Shrawan, so the first run of the new year is the one most likely to be wrong if the rates were not updated.
Within the year the cycle is monthly: run payroll, withhold, deposit within 25 days, and report. The annual reconciliation at year end has to agree with the twelve monthly returns, which is why a correction made only in payroll and not in the filed return causes trouble later.
A distinction worth keeping straight
The IRD approves billing and invoicing software in Nepal. It does not approve or certify HR or payroll systems. What a payroll system can honestly claim is that it produces returns in the IRD's eTDS format, ready to upload, which is a statement about the file rather than about an endorsement.
Inland Revenue Department (IRD), answered
Tax withheld from salary is deposited within 25 days of the end of the month it relates to, along with the corresponding withholding return.
No. The IRD approves billing and invoicing software. For payroll, what matters is that the system produces returns in the eTDS format the IRD specifies, ready for you to upload.
With the annual budget, ahead of the new fiscal year that starts in Shrawan. The first payroll run of the year is where an un-updated slab table shows up.
- Income Tax Act 2058 and Inland Revenue Department published procedures (ird.gov.np).
This page explains general practice in Nepal. It is not legal or tax advice, and statutory figures are revised from time to time. Check the current Act, rule or notice before acting on it.
Related terms
- eTDSइ-टीडीएसeTDS is the Inland Revenue Department's electronic format for withholding returns. It reports, employee by employee and against each personal PAN, how much tax the employer withheld and deposited for the period.
- TDS (Tax Deducted at Source)स्रोतमा कर कट्टीTDS is income tax withheld by the employer from an employee's salary each month and deposited with the Inland Revenue Department on the employee's behalf. It is calculated on annual projected income and spread across the year, not charged month by month in isolation.
- Income Tax Slabsआयकर दरNepal's personal income tax is charged at marginal rates across annual income bands. For FY 2083/84 the first NPR 1,000,000 is taxed at 1%, rising through the bands to a top marginal rate of 29%.
- PAN (Permanent Account Number)स्थायी लेखा नम्बरA PAN is the taxpayer identification number issued by Nepal's Inland Revenue Department. Every employee needs a personal PAN for the tax withheld from their salary to be credited to them, and every employer needs a business PAN to deposit it.
- Nepali Fiscal Yearआर्थिक वर्षNepal's fiscal year runs from the first of Shrawan to the last day of Ashad in the Bikram Sambat calendar, which is roughly mid-July to mid-July in the Gregorian calendar. Tax slabs, leave accrual, bonuses and annual returns all follow it.
Stop looking this up. Let the system apply it.
NepalHRM applies Nepal's payroll, leave and attendance rules per employee, every run, so the policy in your handbook and the numbers on the payslip stay the same document.
- No minimum commitment
- Nepal IRD compliant
- Free onboarding
- Cancel anytime