Nepal Freelancer & Sole Proprietor — D-01 Income Tax Return

Confirm the client is a resident natural person or sole proprietor subject to Nepal income tax under the Income Tax Act 2058. Establish PAN status, assessment type (single vs couple), SSF enrolment, gender (female-taxpayer rebate), age (senior-citizen exemption), and fiscal year in scope (Bikram Sambat FY 2082/83, Shrawan 1 – Ashad end). Determine whether any income other than self-employment exists (employment salary, rental, dividends) that must be included on the D-01.

Classify the client into the correct tax regime before any computation: (a) presumptive fixed tax (turnover ≤ NPR 3,000,000 and income ≤ NPR 300,000, non-excluded profession — fixed NPR 7,500 / 4,000 / 2,500 by municipality type); (b) turnover-based tax (turnover NPR 3,000,000–10,000,000, profit ≤ NPR 1,000,000 — rate 0.25%–2.00% on gross turnover by business type); or (c) normal slab return (everyone else, and all excluded professionals such as doctors, lawyers, auditors, engineers, consultants, and actors). Excluded professionals cannot use (a) or (b) regardless of turnover.

Classify all bank-statement transactions for Shrawan 1 – Ashad end FY 2082/83 into income heads and deductible/non-deductible expense categories. Business income includes client payments, freelance platform payouts (Upwork, Fiverr, Payoneer, Wise), and digital-wallet settlements (eSewa, Khalti, ConnectIPS). Deductible expenses include office rent, CA/audit fees, SaaS subscriptions, marketing, bank charges, and business travel. Capital items (laptops, furniture, vehicles) are capitalised and depreciated under Schedule 2 of the Act, not fully expensed. Personal drawings, fines, income tax payments, and entertainment are non-deductible. VAT collected and advance tax instalments are excluded from income.

Apply all allowable deductions in the correct order on the D-01: approved retirement contributions (EPF/CIT/SSF combined, capped at lower of 1/3 of assessable income or NPR 500,000), life-insurance premium (up to NPR 40,000), health-insurance premium (up to NPR 20,000), and donations (up to 5% of adjusted taxable income or NPR 100,000, whichever is lower). Add the senior-citizen extra exemption (NPR 100,000 for age 65+) if applicable. Apply couple-assessment slab thresholds if elected. Confirm whether the 1% Social Security Tax (SST) first band applies (non-SSF enrollees) or is waived (SSF enrollees). Apply the 10% female-taxpayer rebate on computed tax if the client is a resident woman with employment/remuneration income.

Reconcile all tax already paid or withheld against the computed liability. Collect TDS certificates (E-TDS) from clients who withheld at source (service-fee TDS 15%, contract payment TDS 1.5%, rent TDS 10%). Reconcile advance/installment tax paid during the year — three instalments under Income Tax Act Section 94: 40% by end of Poush, 70% by end of Chaitra, 100% by end of Ashad. Confirm receipts from the IRD portal. Calculate the net tax payable or refund position. If a shortfall in instalments exists, note any interest exposure for the practitioner's review.

Complete and submit Form D-01 on the IRD taxpayer portal (taxpayerportal.ird.gov.np) within 3 months of FY end (end of Ashoj, approximately mid-October). If an extension is required, file an application for up to 3 further months (to end of Poush, approximately mid-January). Enter all income heads, deductions, TDS credits, advance tax credits, and net tax payable. Pay any balance due via bank draft or online through the portal. Retain the filed return acknowledgement and payment receipts for at least 5 years. Ensure the tax paid confirmation number is reconciled with the IRD account.