TDS calculator
Tax deducted at source, by payment type. The arithmetic is trivial; the rate is not. The same consultancy invoice is 1.5% or 15% depending on one document, and an amount agreed "in hand" has to be grossed up rather than marked up.
The payment
Rs 1,500.00withheld at 1.5% · Rs 98,500.00 paid to the payee
The three figures
| Gross | Rs 1,00,000.00 |
|---|---|
| TDS at 1.5% | Rs 1,500.00 |
| Paid to the payee | Rs 98,500.00 |
| Adding the rate back instead | — |
| Short by | — |
What happens next
| Rate | 1.5% |
|---|---|
| Deduction is | An advance |
An advance: the payee claims it as a credit against the tax they compute for the year.
The Rs 50,000 threshold is cumulative. Contract payments to one party cross into TDS once they pass Rs 50,000 for the year, not per invoice. Splitting a bill in two does not avoid the deduction, and a payer who assumes it does is the one who ends up liable.
The deduction is the payer's obligation, not the payee's. If you fail to withhold, the tax office comes to you for the amount plus interest — you do not get to point at the person you paid. Deposit by the 25th of the following month.
Grossing up is not adding the rate back
Contracts in Nepal are routinely agreed as an amount "in hand". If you promise Rs 50,000 net at 15%, the gross is Rs 58,823.53 — not Rs 57,500.00. Adding 15% to the net leaves you Rs 1,323.53 short, and the shortfall comes out of the payer, because the payee was promised a net figure.
The correct move is to divide the net by 0.85, not multiply it by 1.15. The gap widens fast with the rate: it is small at 1.5% and it is a third of a deduction at 25%.
One document, ten times the rate
A service or consultancy fee is withheld at 1.5% if the payee issues a VAT invoice, and 15% if they bill on a PAN alone. Nothing else about the transaction changes. That single fork is behind most of the wrong deductions in the country, in both directions: payers who apply 1.5% to a PAN bill are under-withholding and carry the liability themselves.
Final against advance, and why it matters
A final withholding closes the matter. Dividend, deposit interest for an individual, rent paid to a natural person, windfall gains — the tax is settled at source and the income does not go into an annual assessment. An advance withholding is a payment on account: the payee still computes their own liability for the year and claims the deduction as a credit.
Treating an advance as final is how a consultant with several clients reaches the end of the year believing they are square, and is not. Each of those 1.5% deductions was a down-payment against a bill computed on the income tax bands, not the bill itself.
Every rate on this page
| Payment | Rate | Final? |
|---|---|---|
| Service or consultancy fee, payee is VAT-registered | 1.5% | Advance |
| Service or consultancy fee, payee has a PAN only | 15% | Advance |
| Contract or agreement payment | 1.5% | Advance |
| Commission | 15% | Advance |
| Rent of land or a building, paid to a natural person | 10% | Final |
| Vehicle hire or carriage, payee is VAT-registered | 1.5% | Advance |
| Interest on a personal deposit, paid by a bank or finance company | 5% | Final |
| Interest paid to an entity | 15% | Advance |
| Dividend from a resident company | 5% | Final |
| Royalty | 15% | Advance |
| Meeting allowance | 15% | Final |
| Part-time teaching or an occasional lecture | 15% | Final |
| Windfall gain — lottery, prize, gift | 25% | Final |
| Retirement payment from an approved fund | 5% | Final |
| Service payment to a non-resident | 15% | Final |
| Contract or agreement payment to a non-resident | 5% | Final |
Rates carry the caveat at the top of this page: they are corroborated across published summaries of the Income Tax Act rather than read off an IRD circular, and finality in particular has exceptions this table does not carry. For anything unusual, or anything large, check the Act.
Related
The VAT calculator handles the other half of an invoice, and the salary tax calculator covers the annual assessment an advance deduction is credited against.
Common questions
- Is this Nepal TDS calculator page free to use?
- Yes. Every Kaamko tool is free, with no sign-up, no account and no usage limit. They are published by Imperial College of Engineering, a Tribhuvan University-affiliated engineering college in Tathali, Bhaktapur, and are not funded by advertising.
- Does what I type get sent anywhere?
- No. This tool runs entirely in your browser: the calculation happens on your own device, nothing you type is uploaded, and nothing is stored after you close the page.
- Where do the figures come from?
- Each tool names its source on the page, along with the date that source was read. Where a rate or a slab is provisional — announced in a budget speech but not yet gazetted, for instance — the page says so rather than presenting it as settled.
- Who maintains these tools?
- Imperial College of Engineering, formerly Janakpur Engineering College, in Tathali, Bhaktapur, Nepal. Corrections are welcome by phone on 01-5091616 or through the contact page, and a figure reported as wrong is checked against its published source rather than adjusted on request.
Last checked by Imperial College of Engineering. Rates, slabs and formulas are re-checked against their published source on this date.