Nepal IRD Tax Penalty & Late Interest (जरिवाना तथा ब्याज) Estimator

Under Section 29 of the Nepal Value Added Tax Act 2052, if a taxpayer fails to file their monthly VAT return by the 25th of the following Bikram Sambat month, the Inland Revenue Department (IRD) assesses a late filing penalty of 0.1% of the tax payable per day or NPR 1,000 per month (or part thereof), whichever is higher. If it is a Nil or credit return, a flat NPR 1,000 per month penalty applies.

Under Section 119 of the Nepal Income Tax Act 2058 and Section 19 of the VAT Act 2052, interest on late tax payments is charged at 15% per annum on a daily basis (Simple interest: Unpaid Tax × 15% × Overdue Days / 365) from the statutory due date until the actual date of deposit to the government revenue account.

Under Section 117(1)(c) of the Income Tax Act 2058, failure to furnish a withholding tax statement by the 25th incurs a penalty of 1.5% per annum on the amount of withholding tax or NPR 100 per month, whichever is higher, plus 15% per annum Section 119 interest on unpaid withholding tax amounts.

Under Section 94 of the Income Tax Act 2058, entities must pay estimated income tax in three installments: (1) 1st Installment by Poush end (minimum 40%), (2) 2nd Installment by Chaitra end (minimum 70%), and (3) 3rd Installment by Ashadh end (100%). If installments fall below 80% of actual tax liability, Section 118 penalty of 15% per annum applies.

Fines and interest are paid directly to the designated Nepal Rastra Bank government revenue accounts via commercial bank branches or ConnectIPS using official IRD Revenue Head Codes (राजस्व शीर्षक) such as 11411 for VAT, 11111 for Corporate Tax, and 11113 for Remuneration TDS.

ByaparOS features automated statutory tax calendars with 5-day and 2-day advance alerts for VAT Annex 5/6, TDS deposits, and advance CIT deadlines, ensuring your accounting team never misses an IRD statutory date.