TDS Rates in Nepal for FY 2083/84 | Quick reference to Tax Deducted at Source under the Income Tax Act, 2058

TDS Rate in Nepal for FY 2083/84

Quick reference to Tax Deducted at Source under the Income Tax Act, 2058 (Sections 87, 88, 88Ka and 89). Shaded = Final TDS

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Employment income Section 87

Paid by a resident employer to a resident employee: TDS at slab rates.

First Rs. 10,00,000	Next Rs. 5,00,000	Next Rs. 10,00,000	Next Rs. 15,00,000	Balance
1% (SST)	10%	20%	27%	29%

The 1% SST does not apply to: (a) proprietorship firms (business income), (b) pension income, (c) a natural person participating in SSF.
Paid to a non-resident employee: 25%.

Interest Section 88

Rate	Payment
No TDS	Interest paid to resident BFIs; interest on loans between co-operative banks and co-operatives; interest exempt from tax; interest on deposits up to Rs. 25,000 paid by rural municipality-based microfinance, Rural Development Bank, Postal Savings Bank, or co-operatives with agro/forest-based income or operating in rural municipalities (if interest exceeds Rs. 25,000, TDS applies only on the excess) (amendment FY 2083/84).
5%	Interest on deposits of life insurance companies paid by resident BFIs; interest on foreign currency loans from foreign banks/FIs for reservoir/semi-reservoir hydro projects above 200MW completing financial closure by end of Chaitra 2082; interest paid by resident BFIs on foreign currency loans from foreign banks/FIs invested in NRB-prescribed areas.
6%	Final TDS, only if all conditions are met: paid to a natural person; paid by a resident bank, financial institution, co-operative, bond-issuing entity or listed company; on deposits, bonds, debentures or government bonds; not connected to the recipient's business.
15%	Interest paid to tax-exempt organizations (final TDS); to a natural person for business purposes; to entities.

Natural resource payments Section 88

15%	Payment for natural resources.

Rent Section 88

No TDS	House rent paid to a natural person, other than for conducting business (the payer pays Bahal Kar at the Ward).
1.5%	Carriage service and rent of transportation vehicles, or payment to a person in the vehicle-hiring business, where the recipient is VAT registered.
2.5%	Carriage service and rent of transportation vehicles where the recipient is not VAT registered.
10%	All other rental payments.

Royalty Section 88

No TDS	Payment for articles published in a newspaper.
1.5%	Payment to a resident person for literary articles or compositions.
15%	All other royalty payments (fees paid for affiliation to a university are treated as royalty).

Service fee Section 88

No TDS	Inter-regional exchange fee paid to the bank issuing credit cards. If a training venue is not in Nepal, the training is deemed provided outside Nepal, so no TDS on that payment.
1.5%	Services that are VAT exempt, or services paid to a VAT-registered party.
5%	Registration, education and exam fees paid to a foreign school or university.
15%	Final TDS: meeting fee up to NPR 20,000 per meeting; question setting and answer checking; part-time teaching or guest lectures.
15%	Meeting fee above NPR 20,000 per meeting; all other service fees.

Commission and sales bonus Section 88

No TDS	Incentives given to consumers who pay for goods/services through digital instruments (ATM, e-money/wallet, mobile banking).
5%	Payment by a resident employment agency to a non-resident person.
20%	Final TDS: service charges or commission paid to an insurance agent who is a resident natural person (amendment FY 2083/84).
15%	All other commission or sales bonus payments.

Dividend Section 88

5%	Paid by a resident company or partnership, on the gross amount (final TDS).

Investment insurance and mutual funds Section 88

5% of gain	Gains on investment insurance (final TDS).
5%	Gain paid by a mutual fund to a natural person (final TDS).
15%	Gain paid by a mutual fund to any entity other than a natural person.

Retirement payments Section 88

No TDS	PF, CIT, gratuity and accumulated payments relating to the period before 19.12.2058; medical expenses up to NPR 1,80,000 for employees employed before 19.12.2058, received after retirement.
5% of gain	Final TDS on payment by the Government of Nepal or a contribution-based approved retirement fund. Gain = gross payment, less payment accrued till 18.12.2058, less the higher of (a) NPR 5,00,000 or (b) 50% of the retirement payment liable to tax (Sec. 65(1)(b)).
5% of gain	Final TDS on payment by a contribution-based un-approved retirement fund. Gain = gross payment, less payment accrued till 18.12.2058, less retirement contribution paid by the person.
15%	Non-contributory retirement payments (final TDS).

Windfall gain Section 88Ka

No TDS	Awards up to Rs. 5 lakhs for contributions in literature, art, culture, sports, journalism, science, technology, agriculture or public administration; or national/international awards in those sectors published in the Nepal Gazette.
25%	Final TDS on awards above Rs. 5 lakhs not exempted by Nepal Gazette publication (TDS only on the excess amount) (amendment FY 2083/84); and on all other windfall gains.

Contract payments Section 89

No TDS	Payment to a resident person under a contract where the total of the previous 10 days' payments does not exceed NPR 50,000; work done through a consumer committee (amendment FY 2083/84).
1.5%	Final TDS: premium paid to a non-resident insurance company; commission on reinsurance premium accepted from non-resident insurance companies.
1.5%	Payment to a resident person under a contract where payments exceed Rs. 50,000 (total of the previous 10 days).
5%	Final TDS on payment to a non-resident person under a contract or agreement.

Payments treated as final TDS Section 92

The tax withheld is the recipient's final tax on: dividends paid by resident companies or partnerships; house/land rent paid to a natural person not running a business; gains on investment insurance; benefits from un-approved retirement funds; interest meeting the 6% conditions above; payments to non-residents under Sections 87, 88, 88Ka or 89; all retirement payments (except regular pension); meeting fees up to Rs. 20,000 per meeting, part-time teaching, and question setting or answer checking; windfall gains; mutual fund returns to natural persons; and commission paid to insurance agents.

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Source: compiled from the FY 2083/84 TDS guide by CA Bishal Bhattarai (Accountants' Adda) and the Inland Revenue Department's TDS and advance tax schedule under the Income Tax Act, 2058. This note is a study summary, not tax advice. Check the latest Finance Act and IRD notices before applying any rate.

Santosh Tharu · www.tharusantosh.com.np

Law of Contract - Complete Exam Notes (Business Law, BBS / CA Cap-I)

Based on The Muluki Civil Code Act, 2074 (National Civil Code, 2074)
Prepared By Santosh Tharu | www.tharusantosh.com.np

Download PDF NotesFree PDF • 8 pages • Google Drive

1. Meaning of Contract

• Generally, contract law is the law of promises. It is the oldest commercial law and the foundation of modern business law.
• It applies not only to business but also to our day-to-day life.
• Definition: A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. As per Section 504(1) of the Civil Code, 2074: a contract is an agreement between two or more parties to do or abstain from doing something, which is enforceable by law.
• In juristic concept a contract has two constituent elements: Agreement and Obligation.

Daily-life activity	Type of contract
Buying a television set	Contract of sale
Travelling in a bus	Contract of carriage
Giving a laptop for repair	Contract of bailment

2. Contract Law in Nepal

• Contract law is specified in the Muluki Civil Code Act, 2074 (MCCA-2074) – formally Muluki Devani Samhita, 2074; English title: National Civil Code, 2074. Contract provisions are in Part 5.
• Party autonomy: the Law does not say what contracts parties may make. They are free to make their own bargain, subject to the limits laid down in the Law. Contract law therefore lays down the limits within which parties are free to contract.

Historical development (short)

• Early period: Nepali law was influenced by Hindu philosophy – the Sruties and Smrities of Munies like Narad, Yajnavalkya, Manu. Customs and usages based on Hindu religion governed contractual relations.
• Muluki Ain, 1910 (Rana period) – first time a few provisions on contract were made. Replaced by the new Muluki Ain, 2020.
• Contract Act, 2023 – first separate law on contracts (insufficient and defective in principle).
• Contract Act, 2056 – replaced the 2023 Act with a more complete law.
• Civil Code, 2074 – unified Civil Code; the Contract Act 2056 was repealed. It incorporates modern principles of English and Indian contract law.

Year	Law
1910	Muluki Ain (first contract provisions)
2020	New Muluki Ain
2023	Contract Act, 2023
2056	Contract Act, 2056 (replaced 2023 Act)
2074	Muluki Civil Code – Contract Act 2056 repealed

3. Major Provisions of the Civil Code, 2074

S.N.	Subject	Section	Key point
1	Definition	504 (1)	Contract = agreement between two or more parties enforceable by law. Offer = proposal made by one to another to obtain assent. Acceptance = assent given in the same sense as the offeror intended.
2	Contractual capacity	506	Minors, persons of unsound mind and persons disqualified by law cannot contract. Sec 32 defines minor; Sec 33 defines unsound mind.
3	Autonomy of parties	507	Parties can choose subject matter, fix nature and amount of consideration, terms and conditions, remedies for breach, and procedure to settle disputes.
4	Offer and acceptance	508 – 512	Communication, revocation, when offer/acceptance is treated as revoked, general offer, place of contract.
5	Contingent contract	513	Rules on performance of contingent contracts.
6	Void and voidable contracts	517, 518	Sec 517: list of void contracts (restraint of trade/profession, restraint of marriage, against public policy and welfare of state, unlawful object or consideration). Sec 518: cases where a contract becomes voidable.
7	Specific contracts	Chapters 6 – 14	Indemnity and guarantee, bailment and pledge, sale of goods, agency, carriage of goods, lease, hire-purchase, contract labour, etc.
8	Performance of contract	521 – 534	Ways, manner, time, date and place of performance; who can demand it; who is bound; when performance is not needed.
9	Breach and remedies	535 – 544	Remedies: rescission, damages, specific performance, quantum meruit and injunction.
10	Limitations	Each chapter	Time limit within which the injured party must go to court; otherwise no remedy.

4. Contract vs Agreement

Contract = Agreement + Enforceability (legal recognition).

Agreement	Enforceability of agreement
An offer when accepted becomes an agreement.	Legal obligation arising from the agreement. (Obligations arising without agreement cannot be contractual.) Parties must be legally bound to perform their promises.

Case law – Balfour v. Balfour: A husband promised to pay his wife a monthly allowance of 30 pounds for her maintenance. They later separated and he stopped paying. The wife sued. The court held that such arrangements are not contracts because the parties did not intend to create legal relations. Suit dismissed.

Legal obligations without agreement

Some legal obligations arise even without any agreement and are enforceable by courts – e.g. the duty to maintain wife and children, or obligations from tort (civil wrong). There is enforceability but no agreement, hence not a contract.

Conclusion

• A contract is an agreement enforceable by law; the agreement must create a legal obligation.
• All agreements cannot be enforced, so not all agreements are contracts. Hence: "All contracts are agreements but all agreements are not contracts."
• Not all legal obligations are contractual (they may arise without agreement).
• The law of contract is neither the whole law of agreements nor the whole law of obligations. It is the law of (i) those agreements which create legal obligations, and (ii) those obligations which arise from agreements.

Distinction between Contract and Agreement

Basis	Contract	Agreement
Definition	An agreement enforceable by law.	An offer when accepted becomes an agreement.
Enforceability	Every contract is enforceable.	May not be enforceable.
Inter-relationship	A contract includes an agreement.	An agreement does not include a contract.
Scope	Limited – includes only commercial agreements (legal assumption).	Wider – includes both social and commercial agreements (legal assumption).
Validity	Only legal agreements are contracts.	May be legal or illegal.
Legal obligation	Every contract contains a legal obligation.	Not necessary for every agreement.

5. Essential Elements of a Valid Contract

Section 10 of the Indian Contract Act (a model for the Nepali provisions): All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not expressly declared void. Textbook summary lists 12 elements: two parties; offer and acceptance; intention to create legal relationship; consensus-ad-idem; consideration; free consent; capacity; lawful object; not expressly void; possibility; certainty; legal formalities.

1. Proper offer and acceptance (agreement)

• At least two parties; one makes the offer/proposal, the other accepts.
• Offer and acceptance must be legal.

2. Intention to create legal relationship

• A relationship enforceable by law is a legal relationship.
• Social/domestic agreements: presumed no intention to create legal relations (Balfour v. Balfour).
• Commercial agreements: presumed intention exists.

3. Lawful consideration

• Consideration = something in return, "Quid pro quo".
• It must not be unlawful, immoral or opposed to public policy.

4. Capacity of parties

• Every person is competent to contract if he/she is a major (adult; minor is defined in Sec 32), of sound mind (Sec 33) and not disqualified by law.
• A person of unsound mind may contract during a lucid interval.
• Not competent: alien enemy, foreign sovereigns and accredited representatives of a foreign state, insolvents, convicts.

5. Free consent

• Parties must agree upon the same thing in the same sense – consensus-ad-idem (identity of mind).
• Consent is free when not caused by coercion, undue influence, fraud or misrepresentation.

Example: A threatens to shoot B unless B sells his house to A for Rs. 20,000, and B agrees. This is coercion, so consent is not free – the agreement is voidable at the option of B.

6. Lawful object

• Object = purpose or design. It must not be illegal, immoral or opposed to public policy.

Example: A and B agree to smuggle goods out of Nepal. The object is unlawful, so the agreement cannot be enforced in court.

7. Possibility of performance

• An agreement to do an act impossible in itself is void.

Example: An agreement to discover treasure by magic is void.

8. Certainty

• An agreement whose meaning is unclear or vague is void, unless the terms can be made certain from the circumstances.

Example: A deals in kerosene and coconut oil; B agrees to buy 10 litres of "oil" – meaning is uncertain, so it cannot be enforced. If A deals only in kerosene, the meaning is clear from the circumstances and the agreement is valid.

9. Not expressly declared void

• Agreements in restraint of trade, marriage or legal proceedings are expressly void (Sec 517).

10. Legal formalities

• A contract may be oral or written. Where the law requires writing, registration or attestation, these must be complied with; otherwise it is not enforceable.

Example: A promise to pay a time-barred debt must be in writing.

6. Interpretation of Contract

• Interpret according to the collective desire (intention) of the parties, taking into account their views, conduct and the circumstances.
• If intention cannot be determined, interpret as a person of common prudence would in ordinary circumstances.
• Interpret so as to give effect to the entire contract – no phrase may be set aside, and no single phrase given effect in isolation.

7. Classification of Contracts

Five bases: (A) Enforceability, (B) Formation, (C) Execution/Performance, (D) Liability (existing duty), (E) Creation of obligation (future contingency).

A. On the basis of Enforceability

Type	Meaning and key points
1. Valid contract	Satisfies all essential elements; enforceable by law; both parties have rights and obligations (A can enforce against B and B against A).
2. Void agreement	Not enforceable by law; creates no rights or obligations; not a contract at all; void ab initio (void from the beginning).
3. Void contract	Valid when made but later ceases to be enforceable due to supervening impossibility, change of law, destruction of subject matter, death or unsoundness of mind of a party – circumstances beyond both parties' control. English law: doctrine of frustration.
4. Voidable contract	Enforceable at the option of one party only (the party whose consent was not free). Binding until that party rescinds it – within a reasonable time or before a third party acquires title to the goods. (If both parties can set it aside it is void; if only one can, it is voidable.)
5. Illegal agreement	Object is unlawful; cannot be enforced; void ab initio; even collateral agreements become void.
6. Unenforceable contract	Cannot be enforced in court because of a technical defect – absence of writing, barred by limitation, lacking signature, stamping or registration.

B. On the basis of Formation

Type	Meaning and key points
7. Express contract	Made by words spoken or written.
8. Implied contract	Offer and acceptance made otherwise than in words – by acts of parties or circumstances.
9. Tacit contract	Part of implied contract; inferred from conduct. E.g. cash withdrawal from an ATM; sale by fall of the hammer (auction).
10. Quasi contract	A contract created by law, based on equity and the principle of unjust enrichment.

C. On the basis of Execution / Performance

Type	Meaning
11. Executed contract	Both parties have fulfilled their obligations; nothing remains to be done.
12. Executory contract	Both parties still have to perform their obligations.
13. Partly executed and partly executory	One party has performed; the other has still to perform.

D. On the basis of Liability (existing duty)

Type	Meaning and key points
14. Unilateral contract (MCQ)	Only one party makes a promise; one-sided – the other party has already performed by doing the desired act. Promise on one side is exchanged for an act on the other. E.g. reward announced for whoever finds a lost passport – if found, the announcer must pay.
15. Bilateral contract	Two-sided; both parties must fulfil obligations. Reciprocal promises – each promise is the consideration for the other.

E. On the basis of creation of obligation (future contingency)

Type	Meaning
16. General (simple) contract	Not subject to any future contingency; obligation arises immediately.
17. Contingent contract	Arises only when something happens or does not happen in the future (Sec 513).

8. Important Comparisons

Void agreement vs Illegal agreement

Matter	Void agreement	Illegal agreement
What	Not prohibited by law.	Prohibited by law.
Collateral transaction	Enforced.	Not enforced.
Punishment	No.	Yes.
Void ab initio	May not be void ab initio.	Always void ab initio.

Void contract vs Voidable contract

Basis	Void contract	Voidable contract
Meaning	Contract that ceases to be enforceable (valid when made, later becomes void).	Contract enforceable at the option of one party, not the other.
Cause	Supervening impossibility, change of law, etc. (doctrine of frustration).	Consent not free – coercion, undue influence, fraud, misrepresentation.
Option	Neither party can enforce it; either may ignore it.	Only the aggrieved party may rescind or affirm.
Status until avoided	Void from the date it becomes impossible/illegal.	Valid and binding until the aggrieved party rescinds it.
Rights of parties	No rights or obligations after it becomes void.	Rights remain unless and until it is avoided; third parties acquiring title in good faith are protected.
Example	Contract to deliver a particular painting; painting destroyed by fire.	A threatens B to sell a house for Rs. 20,000; B may avoid it.

Note: The void-vs-voidable table is added from standard contract-law principles for the exam question "Distinguish between void and voidable contract". Match it with your teacher's own points if they differ.

9. Nature and Functions of Contract

Nature

• An agreement between two or more persons on a particular matter.
• Creates legal and binding obligations between the parties.
• Establishes a course of action to be performed by them.
• Provides remedies to the affected party if things go wrong.
• Recognised and enforced by law, i.e. contract law.

Functions

• Establishes the value of the exchange or transaction.
• Lays down the respective responsibilities of parties and the standard of performance expected.
• Enables the economic risks involved in transactions to be managed.
• Provides remedies if a promise is not fulfilled.
• Is the instrument by which separate and conflicting interests of participants are reconciled and brought to a common goal.

10. Short Answers (Brief Questions)

Q1. What is contract?
An agreement between two or more parties to do or abstain from doing something, which is enforceable by law (Sec 504(1)). Contract = Agreement + Enforceability.

Q2. What is consideration?
Something in return – "quid pro quo". It must be lawful (not illegal, immoral or against public policy).

Q3. Persons suffering from incapacity to contract?
Minors, persons of unsound mind, and persons disqualified by law (e.g. alien enemy, insolvents, convicts).

Q4. When is consent free?
When it is not caused by coercion, undue influence, fraud or misrepresentation, and parties agree on the same thing in the same sense.

Q5. Define unlawful agreement.
An agreement whose object is illegal, immoral or opposed to public policy; it is void ab initio and cannot be enforced, and collateral agreements also become void.

Q6. What is void agreement?
An agreement not enforceable by law; it creates no rights or obligations and is void ab initio.

Q7. When is a contract voidable?
When it is enforceable at the option of one party only – generally where consent was not free. The aggrieved party may rescind within a reasonable time or before a third party acquires title.

Q8. Distinguish void and illegal agreement.
See Section 8 – void is not prohibited by law, collateral enforced, no punishment; illegal is prohibited, collateral not enforced, punishable, always void ab initio.

Q9. Distinguish void and voidable contract.
See Section 8 – void is unenforceable by both parties; voidable is valid until the aggrieved party avoids it.

Q10. When is an agreement enforceable by law?
When it has all essentials: offer and acceptance, intention to create legal relations, lawful consideration, competent parties, free consent, lawful object, possibility, certainty, formalities, and is not declared void.

11. Exam Question Map and Answer-Writing Guide

Exam question	Use these sections
Define contract; nature and functions	1, 9
"All contracts are agreements but all agreements are not contracts" (and reverse form)	4 (conclusion), Contract vs Agreement table, 5
Law of contract is not the whole law of agreement nor obligation	4 (last conclusion point + Balfour v. Balfour)
Essential elements of a valid contract; when does an agreement become void	5, 7A, 8
Types of contracts; short notes (unenforceable, executed/executory, contingent, quasi)	7
Void vs voidable; void vs illegal	8
Contract vs agreement; factors essential for valid contract	4 table + 5
Law of contract in Nepal / Civil Code provisions	2, 3

How to write a descriptive answer (10 marks)

• Introduction: definition of contract (Sec 504(1)) in 2 – 3 lines.
• Body: headings with 1 – 2 lines each; add a small example for consent, object, possibility and certainty.
• Table or case: use a comparison table when the question says "distinguish"; quote Balfour v. Balfour for intention to create legal relations.
• Conclusion: one-line summary, e.g. "Thus, a contract is an agreement enforceable by law."

Quick memory trick: O-I-C-C-F-L-P-C-F = Offer and acceptance, Intention, Consideration, Capacity, Free consent, Lawful object, Possibility, Certainty, Formalities (plus: not expressly void).

Download PDF NotesFree PDF • 8 pages • Google Drive

For more free notes visit www.tharusantosh.com.np
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ICAN Guidelines on Marketing Professional Services 2023 PDF | Professional Accountants in Public Practice (Including Second Amendment 2026)

This official publication issued by the Institute of Chartered Accountants of Nepal (ICAN) provides comprehensive guidance on how Professional Accountants in Public Practice should market their services while maintaining compliance with professional ethics and the Code of Ethics. The guideline aims to ensure that accountants communicate their services responsibly without engaging in misleading, deceptive, coercive, or unethical advertising practices.

Key Topics Covered

• Objectives of marketing professional services
• Ethical principles governing publicity and advertisements
• General rules regarding marketing and client solicitation
• Website design, content, and permitted disclosures
• Social media marketing guidelines (Facebook, LinkedIn, YouTube, TikTok, etc.)
• Rules regarding firm profiles, brochures, and promotional materials
• Signboards, letterheads, business cards, logos, and professional documents
• Participation in seminars, webinars, fairs, and public events
• Restrictions on advertising audit and attestation services
• Prohibited activities and disciplinary consequences for violations
• Guidelines on the use of logos by professional accounting firms
• First Amendment 2025 and Second Amendment 2026 updates

This PDF is an essential reference for Chartered Accountants (CA), Registered Auditors (RA), accounting firms, audit practitioners, accounting students, compliance professionals, and anyone interested in understanding the regulatory framework governing professional service marketing in Nepal. It helps practitioners ensure that their promotional activities remain compliant with ICAN regulations and professional ethics standards.  

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आर्थिक वर्ष २०८३/८४ को नयाँ व्यक्तिगत आयकर संरचना: पुरानो कर स्ल्याबसँग तुलना, कर दर र प्रभावको विस्तृत विश्लेषण