For payments subject to withholding, these are common income-tax rates for FY 2083/84. Specific exemptions and special categories must still be checked.
| Payment | TDS |
|---|---|
| General service fees | 15% |
| Service fees to a VAT-registered resident service provider | 1.5% |
| Dividend paid by a resident company | 5% |
Salary withholding follows annual Schedule 1 tax bands; it is not a flat 1.5% or 15% charge.
Example: a business pays a qualifying VAT-registered resident consultant a fee of NPR 100,000, excluding separately stated VAT. Income-tax TDS at 1.5% is NPR 1,500. Record the fee, VAT and TDS separately; VAT withholding, where applicable, is a different obligation.
Obtain the correct PAN and confirm the recipient's VAT status. A low TDS rate does not mean the recipient's final income-tax liability is equally low.