Is there a gift tax in Nepal? What you owe when someone gifts you money or land

When my cousin's father transferred a plot in Bhaktapur into his name last year, the first question at the family dinner was not about the land. It was, "How much tax will he have to pay on a gift this big?" Someone at the table was sure it was 25%. Rs 25 lakh on a Rs 1 crore plot, gone to the government, just for receiving a gift.

That number is wrong, and it is wrong by a lot. It comes from Indian tax law, copied onto Nepali blogs by people who never checked the statute. Nepal taxes gifts very differently, and for most families the income tax on a gift of money or land is zero. The cost that does exist sits somewhere else entirely.

Nepal has no separate gift tax

There is no Gift Tax Act in Nepal. Gifts are dealt with inside the Income Tax Act 2058, and the relevant line is short. Section 10(f) lists, among exempt amounts:

"Amounts received as gift, inheritance or scholarship except the amounts required to be included in computing income pursuant to Sections 7, 8 or 9."

Read that carefully, because the whole answer is in it. A gift is exempt. The only exception is a gift that has to be counted as business income (Section 7), employment income (Section 8), or investment income (Section 9). A plot from your father, cash from an uncle abroad, dakshina at your wedding, money from a friend out of plain affection: none of these are business, employment, or investment income. They fall squarely inside the exemption.

The Act's definition of a gift is wide too: any payment made without consideration, or the excess where you pay less than market value for something. So a parent "selling" you a Rs 1 crore plot for Rs 10 lakh is, in tax terms, gifting you Rs 90 lakh of value. Even then, as a personal transfer, that gifted value is not taxed as your income.

The "25% gift tax" myth

One claim circulates widely enough to deserve a direct correction: that Nepal charges a 25% gift tax, with a Rs 500,000 exemption threshold and a 35-day payment deadline.

None of that is Nepali law. There is no 25% rate on gifts, no Rs 500,000 gift threshold, and no 35-day gift-tax deadline anywhere in the Income Tax Act 2058. Those figures track India's gift-tax framework, where gifts above Rs 50,000 from non-relatives are taxed and specific deadlines apply. Someone lifted the structure, changed a number, and posted it as Nepali guidance. The statute says the opposite: personal gifts are exempt, full stop. If a source quotes you a flat gift-tax percentage for Nepal, it has not read the Act.

When a gift is actually taxable

The exemption is for personal gifts. The moment a "gift" is really payment for something, it is taxed.

The clearest case is your employer. Section 8 of the Act includes prize, gift, bonus within remuneration from employment. So a Dashain bonus, a festival hamper, a gift in kind, or a cash "gift" from your company is employment income and is taxed like salary, with no separate exemption for calling it a gift. The Dashain bonus post walks through how that lands on your Kartik payslip.

The same logic catches gifts dressed up to avoid tax. A "gift" from a client that is really a consultancy fee is business income under Section 7. A "gift" that is really a return on an investment is investment income under Section 9. The label on the transfer does not decide the tax; the reason behind it does. Genuine family and personal gifts are clean. Disguised income is not.

Gifting land: the Malpot fee is the real cost

When the gift is property, income tax is the wrong thing to worry about. The cost that exists is the registration fee at the Land Revenue Office (Malpot), paid to put the lalpurja in the new owner's name.

For a normal arm's-length sale, that registration fee runs roughly:

Local level	Registration fee (approx., on assessed value)
Metropolitan city	~5%
Sub-metropolitan city	~4.5%
Municipality	~4%
Rural municipality	~2%
Apartment / flat	~1%

Inside the Kathmandu Valley, an additional 5% Bagmati Sabhyata Kosh levy stacks on top. The full Malpot stack for a Valley sale is covered in the property registration costs post.

Here is the part that matters for gifts. A transfer within the family, by gift deed (bakaspatra) or partition (ansha banda), is not charged the full sale rate. It gets a concessional, often nominal fee, far below the 4–5% a stranger-to-stranger sale attracts. The catch: under the Local Government Operation Act 2074, each local level sets its own rates, and a clean, current single percentage for family gift transfers is not reliably published. Treat "much lower than a sale, often under 1%" as the direction, and confirm the exact figure at your own Malpot office before you budget for it.

One more concession worth stacking. A woman registering property in her name gets a 25% discount on the registration fee in urban areas and 30% in rural municipalities. So gifting land to a daughter or wife often costs less to register than gifting the same plot to a son. The women's property rights post covers that discount in full.

A worked picture. A father gifts his son a Kathmandu plot assessed at Rs 1 crore. As a normal sale, registration plus the Bagmati levy would be in the order of Rs 10 lakh. As a family gift deed, the fee is concessional and a fraction of that. The son's income tax on receiving the plot is zero either way. The 25% "gift tax" the family feared, Rs 25 lakh, never existed.

The tax that shows up later: capital gains

Receiving a gift is tax-free. Selling it is not. This is where the real liability hides, and it can be years away.

When you sell property you were gifted, capital gains tax applies on the gain: 5% if you held it for 5 years or more, 7.5% if under 5 years, withheld by the Land Revenue Office at the point of sale. The gain is the selling price minus the cost basis. For inherited property, the cost basis is generally the fair market value at the time of inheritance. For gifted property, how the basis is set is less cleanly settled, and it directly decides how big your taxable gain is, so confirm it with a tax practitioner before you sell rather than after.

The practical takeaway: the day you receive gifted land, note its assessed value and keep the gift-deed paperwork. That record is what your accountant will need to work out the gain whenever you eventually sell.

No inheritance or estate tax either

Worth stating plainly, because the two questions always come together. Nepal levies no inheritance tax, no estate tax, and no death duty. The same Section 10(f) that exempts gifts also exempts inheritance. Property passing to heirs is not taxed as income at the moment of transfer; CGT only bites on a later sale. The full mechanics of who inherits and how the paperwork moves sit in the inheritance and wills post.

This is not because the idea never came up. Around 2018, the then finance minister said the government was considering an inheritance or estate tax to widen the tax net on wealth. It was discussed, debated, and never legislated. As of FY 2082/83, there is still no inheritance tax on the books.

What you actually need to know

• A personal gift of money or land is not taxed in Nepal. Section 10(f) of the Income Tax Act 2058 exempts it. The "25% gift tax" online is Indian law copied onto Nepali pages; ignore it.
• A gift is taxed only when it is really income. An employer's bonus or a fee disguised as a gift is taxable. A genuine family or personal gift is not.
• For gifted land, budget for the Malpot fee, not income tax. Family transfers are concessional; confirm the rate at your local Land Revenue Office, and remember capital gains tax waits for the eventual sale.

If you are planning a property gift or partition within the family and want to think through the registration cost and the future CGT before you sign anything, send the broad shape (no PII) to parjanya57@gmail.com.

This post is part of the Nepal Money Basics guide — the saving section, alongside the inheritance and wills and giving parents money posts.