Knowing your taxable income is important for everyone — whether you run a business, work a job, or freelance. It helps you pay the correct amount of tax and avoid penalties.
In this guide, we’ll explain the main types of taxable income in Nepal in simple terms.
What is Taxable Income?
Taxable income is the money that the government charges tax on. Every individual and business in Nepal must pay tax according to the Income Tax Act, 2058.
Main Types of Taxable Income in Nepal
1. Employment Income
This is money you earn from a job. Examples include:
- Salary and wages
- Bonuses and allowances
- Overtime payments
- Benefits like housing or transport
2. Business Income
This is money you earn from running a business or offering services. Examples include:
- Profits from your company or firm
- Freelance work or consultancy fees
- Service charges and commissions
Even small or home-based businesses must report income and pay tax.
3. Investment Income
This is money you earn from investments. Examples include:
- Bank interest
- Dividends from shares
- Profit from selling property or shares (capital gains)
- Rental income
Different investment incomes may have different tax rules, so check carefully or ask a tax professional.
Other Taxable Income
Some people may also earn taxable income from:have other taxable incomes such as:
- Work abroad
- Lottery or awards
- Royalties and copyrights
- Retirement pensions (in some cases)
Why It’s Important to Know About Taxable Income
Knowing your taxable income helps you:
- Pay the correct tax
- Avoid fines or legal problems
- Plan your money better
- Follow Nepal’s tax laws
For the latest tax rates, you can read our blog on Income Tax Rates in Nepal 2025: Corporate and Individual Taxation.
Final Words
Whether you’re an employee, freelancer, or business owner, understanding taxable income is key to managing your taxes. If you need help with tax filing, company registration, or business compliance, Company Sewa can guide you.