TDS on Rent related Confusion and Clearance !!

1) Rent = 10% on all Rent Payment fulfilling both condition:

- Payment having source in Nepal
- Payment must be done by Resident Person

(except payment made for Natural Resources and House Rent income of Natural Person not
operating any business !!)

(तर Lease Rental Income कुनै Resident Natural Person ले कमाउँ छ other than operating
business भने पनन 10% tds withhold गनप
ुन छन !)

2) Rent = 10% on payment made for Transportation Services !

(all kind of Transportation except ढुवानी सेवा or ढुवानी साधन related service)

3) Rent = 2.5% on payment made for Carriage Service !

(ढुवानी सेवा or ढुवानी साधन related service)

4) Rent = 1.5% on all Rent payment made to Vat Registered Person operating business of
providing vehicles on Rent !!

Note: The rate 15% is not applicable for TDS on any Rent payment !!

Before The Commencement After The Commencement

@1.5% on all Rent
of Act of Act @5% if payment is @1.5% if payment is payment made to Vat
made by Resident made to Resident Registered Person
Manpower Service Provider who: operating business
Company to Non- - deals in VAT exempted
Shall be exempt: of providing vehicles
Resident Person goods/service
- Provident Fund on Rent
- CIT If payment is made by:- Contributory URF Non-Contributory OR
- Gratuity - GON or - is registered in VAT
- Contributory ARF @ 1.5% on amount @10% on payment of
- Accumulated Leave Pay given as a
- Medical Expenses up to amount on Lease of
Gain TDS @ 15% commission from: @5% in payment to Aircraft
Rs.1,80,000 (Retirement Payment less Retirement - Premium received
- Exempt up to Rs. 5 lakhs foreign school or
or 50% of Actual Payment Contribution) for Reinsurance university for: -on return from Payment made in Payment made in C भनने मानछे ले RRR मभु भ हे र् PISA खाँरै थियो।
from a Non- @10% in payment Shall be withheld by respect of loan taken respect of loan taken
(higher of above) -Registration Charge, deposits, bonds,
If were in service or work on the Resident Insurance made for use of Resident BFI’s in in foreign currency by
-TDS @5% beyond 5 lakhs -Study Charge & government bonds in foreign currency
date of commencement of act Company satellite, bandwidth, respect of deposit hydro project based
-Examination Charge -having source in Nepal by resident BFI’s for
-Premium paid to optical fiber, tools made by Life Insurance reservoirs or semi- investment in the
-not related on
Non-Resident related to Company reservoirs with sector as specified
operation of business
Treat the balance amount of medical If payment is made If payment is made by Insurance Company @2.5% for payment of communication or capacity more than by Nepal Rastra Bank
expenses as Non-Contributory and by Resident Person Non-Resident Person Carriage Service or electricity 200 MW completing its
deduct TDS @ 15% under any contract Rent Payment for transmission line financial closure within
Carriage Transportation Chaitra end 2082 B.S.
TDS @ 5% Shall be included No tax shall be withheld
in income in an amount received
by an individual for
house rent

1. Payment not having source in Nepal,

2. Withholding agent if not being Resident of Nepal i.e. taxpayer,

3. In the motivational amount for payment made through payment cards, e-

money (wallet), mobile banking like electronic payment under the prevailing
@ 1.5% on amount
given as a law on purchase of goods or service by consumer,
commission from:
- Premium received
for Reinsurance 4. Payment by Natural Person in relation to other than operation of business,
from a Non-
Resident Insurance
5. Payment in relation to article written in Newspaper,
Company 6. Payment made to any Resident BFI’s,
-Premium paid to
Non-Resident
Insurance Company 7. Payment of Interest by any Cooperative Banks or Cooperative ltd to each
under any contract other on loan transactions,
Payment of amount
exceeding Rs. 50 lakhs
for a work to be
performed by a
8. Payment in relation to tax exempt,
consumer’s committee
9. Payment in relation to inter-regional interchange fee made to any bank
issuing credit card,
By a resident person By a resident person
while making payment for all kind of InCome TAx And vAT noTeS:-
of sum exceeding Rs. payment in relation to 10.Rent paid for a land or house having source in Nepal or goods and equipment
50,000 in last 10 days any contract or deed
(moving 11 days) installed in the house of an individual other than operating a business,
InCome TAx And vAT dISCuSSIon:-
11. No tax shall be withheld in an amount received by an individual for house rent.