Couple vs individual filing: the one checkbox that changes your tax slab in Nepal

The HR form on my friend's first day at a Kathmandu bank had a line his orientation never explained: Filing status: Single / Couple. He was three months married, so he ticked Couple, reasoning that lying to HR about marriage seemed worse.

His wife runs a clinic and out-earns him. That tick, if payroll had actually processed it as a Section 50 election covering both incomes, would have been one of the more expensive checkboxes of his year. Nobody at the bank could tell him what it did.

What the election actually is

Section 50 of the Income Tax Act 2058 says a resident natural person and their resident spouse "may, by giving a notice in writing, choose to be treated as one natural person in any specific income year."

Every word there is doing work:

• May: it is optional. Marriage does not change your filing status by itself, and tax firms spell out that the option "is not an automatic choice," requiring a declaration from the non-earning spouse.
• In any specific income year: the election is annual. Couple this year, individual next year, recomputed whenever the household's earning pattern changes.
• One natural person: both spouses' incomes merge into a single computation. This is the part dual-earner couples miss.
• Notice in writing: for salaried people this flows through the employer's payroll declaration, which sets which slab table your monthly TDS uses; self-filers set status on their return in the IRD taxpayer portal.

One more clause worth knowing before electing: Section 50(2) makes electing spouses jointly and severally liable for the year's tax. If the tax goes unpaid, the IRD can pursue either of you for all of it.

And one humane provision: Section 50(3), added by a later amendment (so it does not appear in the original translation linked above), extends couple treatment to a resident widow or widower with dependents, no election partner required.

The two tables, FY 2082/83

The current-year slabs, from PKF and RSA's tax cards (the blog's full slab history is in the 2082/83 brackets post):

Taxable income band	Individual	Couple
First band, at 1%	Up to Rs 5,00,000	Up to Rs 6,00,000
10% band	Rs 5–7 lakh	Rs 6–8 lakh
20% band	Rs 7–10 lakh	Rs 8–11 lakh
30% band	Rs 10–20 lakh	Rs 11–20 lakh
36% band	Rs 20–50 lakh	Rs 20–50 lakh
39% band	Above Rs 50 lakh	Above Rs 50 lakh

The whole difference is the first row's extra Rs 1,00,000, rippling each boundary upward until the tables converge at Rs 20 lakh. (The 1% on the first band is the social security tax, waived for SSF contributors, pensioners, and registered sole proprietors.)

When couple filing saves: one income

For a household where one person earns, electing couple status is close to free money. The saving by taxable income, computed from the tables above:

Taxable income	Tax as individual	Tax as couple	Couple saves
Rs 6,00,000	Rs 15,000	Rs 6,000	Rs 9,000
Rs 8,00,000	Rs 45,000	Rs 26,000	Rs 19,000
Rs 10,00,000	Rs 85,000	Rs 66,000	Rs 19,000
Rs 15,00,000	Rs 2,35,000	Rs 2,06,000	Rs 29,000
Rs 25,00,000	Rs 5,65,000	Rs 5,36,000	Rs 29,000

Rs 29,000 is the ceiling, reached at Rs 11 lakh and never exceeded, because above Rs 20 lakh both statuses use identical bands. RSA's own worked example at Rs 60 lakh shows the same Rs 29,000 gap (Rs 18,55,000 versus Rs 18,26,000).

So the rule for single-earner households is short: elect couple, every year, and redirect the Rs 19,000–29,000 somewhere deliberate.

When couple filing costs: two incomes

Here is the trap my friend nearly ticked his way into. The election makes you one taxpayer. Two salaries stack into a single computation against a single Rs 6 lakh first band.

Filing individually, each spouse keeps their own Rs 5 lakh band:

Scenario	Spouse A (Rs 5L)	Spouse B (Rs 5L)	Household tax
Both file individual	Rs 5,000	Rs 5,000	Rs 10,000
Elect couple (Rs 10L combined)	—	—	Rs 66,000

Same household, same Rs 10 lakh, a Rs 56,000 difference. The gap shrinks as the two incomes become more unequal, but the direction holds: whenever both spouses have meaningful income, separate individual filing wins, because Rs 5 lakh + Rs 5 lakh of low-rate headroom beats Rs 6 lakh.

In practice, dual-earner couples in Nepal simply never elect. Each employer runs individual-status TDS, each spouse files (or is filing-exempt) individually, and Section 50 stays unused. The election exists for the household where it was designed to help: one earner, one dependent spouse.

The fine print that interacts with the election

Four second-order effects, all sourced from the CA-firm tax cards:

The women's 10% rebate conflicts with couple status. A woman with only remuneration income gets a 10% rebate on her tax liability when filing individually. IRD's Income Tax Directive treats the rebate as unavailable under couple assessment, and although the Revenue Tribunal has ruled the other way in at least three cases (a reading many payrolls follow), planning against the Directive text is the safe move. A married woman earning Rs 8 lakh whose husband doesn't earn faces a genuine comparison: individual with rebate (Rs 45,000 minus 10% = Rs 40,500) versus couple without (Rs 26,000). Couple still wins there, but run your own numbers; at higher incomes the rebate compounds.

Insurance premiums club but the cap doesn't double. Under couple election, both spouses' life insurance premiums can be combined toward the deduction, but the ceiling stays a single Rs 40,000 (health insurance Rs 20,000). Two individual filers get Rs 40,000 each. Another quiet penalty on dual-earner elections; the full deduction stack is in how to legally lower your income tax.

Allowances that scale off the first band scale with it. The disability deduction is 50% of the first-band amount (Rs 2.5 lakh individual, Rs 3 lakh couple in 2082/83); the pension-income deduction is 25% of it (Rs 1.25 lakh vs Rs 1.5 lakh). Couple status nudges these up too.

The retirement deduction is per taxpayer. The cap, the lowest of Rs 5 lakh, one-third of assessable income, or actual contribution, applies to the return being filed. Two individual filers get two caps; an elected couple gets one. By FY 2082/83 this unified Rs 5 lakh cap covers SSF, EPF, and CIT together (the older Rs 3 lakh non-SSF cap is gone since FY 2081/82, via the fifteenth amendment to the Income Tax Rules 2059).

From Shrawan 2083, the checkbox stops mattering

The 2083/84 budget quietly ends this whole calculation. ICAN's digest of the Finance Bill 2083 states the individual/couple slab distinction is removed, replaced by one schedule for every natural person from Shrawan 1, 2083 (17 July 2026): 1% to Rs 10 lakh, 10% to Rs 15 lakh, 20% to Rs 25 lakh, 27% to Rs 40 lakh, then a surcharge structure on top that reporting reads as the 29% headline rate. (The bill schedules it as 27% plus a 2% surcharge; the budget speech and coverage say 29%, pending the final Act's surcharge wording. Background on what was and wasn't confirmed on budget day is in the 2083/84 slabs post.)

What this means concretely:

• The single-earner couple's Rs 29,000 edge disappears, swallowed by the far larger Rs 10 lakh first band that everyone now gets.
• Dual earners lose nothing; they were filing individually anyway, and each now gets Rs 10 lakh of 1% headroom.
• Section 50 itself was not repealed in the digest, so the election presumably survives as a legal mechanism (with its joint liability), but with one slab table it no longer changes the slab math. Whether secondary interactions (the rebate, band-scaled allowances) keep any couple/individual gap depends on the final Finance Act text.

So if you are a single-earner household reading this before mid-July 2026: the election still pays for FY 2082/83. Make sure payroll applied it for the year ending Asar, then stop worrying about it.

How to actually set it

1. Salaried, single-earner household: confirm your employer's payroll has you as couple (दम्पती). It shows up as lower monthly TDS; the line-by-line check is in how to read your salary slip. A declaration from the non-earning spouse goes in your employee tax file.
2. Salaried, both earning: confirm you are each marked individual. If one employer has someone as couple while both spouses earn, the year-end reconciliation can produce an ugly shortfall.
3. Self-filers: status is selected on the income return (D-03 for normal filers; D-01 and D-02 cover presumptive and turnover filers) in the IRD taxpayer portal, and ticking the couple column on the return counts as the written notice. It is an annual choice; revisit it any year the household's earning pattern changed.

What you actually need to know

• Couple status is an annual written election, never automatic. It merges both spouses into one taxpayer with joint liability for the bill.
• One income: elect it. Worth Rs 9,000 to Rs 29,000 in FY 2082/83. Two incomes: don't. Filing separately preserves two Rs 5 lakh low-rate bands and can be Rs 56,000 cheaper, plus it protects the women's rebate and doubles the insurance deduction headroom.
• This is the final year it matters for slabs. From Shrawan 1, 2083 one uniform schedule (1% to Rs 10 lakh, 29% reported top) replaces both tables. Check your payroll status once before Asar closes, then let the checkbox retire.

This post is part of the Nepal Money Basics guide — the tax and income section.

If your payslip's TDS doesn't match the table for your declared status, send the numbers (no names needed) to parjanya57@gmail.com and I'll check the math.