Estimated Tax Return

Submitting an accurate forecast of your annual earnings is a crucial legal requirement under the Inland Revenue Department (IRD) framework. Present Consultants Private Limited simplifies this process, ensuring seamless calculations and timely submission for total Tax Compliance in Nepal.

₨ 5,000.00

Categories Business Compliance, Tax Services

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Introduction: Estimated Tax Return

For corporate entities and individual taxpayers generating business or investment income, managing advance fiscal projections is an essential requirement. Under the regulatory landscape of Tax Compliance in Nepal, filing an estimate of your annual tax liability ensures that you pay your income tax progressively throughout the financial year rather than in a single lump sum. The procedural method requires calculating your projected net assessable income for the entire fiscal year, computing the estimated tax liability, and submitting a formal electronic forecast via the IRD Integrated Tax System (ITS) portal within the first six months of the income year.

Legal Requirements: Compliance Under the Income Tax Act, 2058

Pursuant to Section 95 of the Income Tax Act, 2058, every person who derives or expects to derive assessable income from a business or an investment during an income year must file an estimated tax return. This statement must details the estimated assessable income, the source-wise taxable income calculated under Section 7, and the total advance tax payable. According to the statutory directives, this electronic statement must be submitted to the Inland Revenue Department by Poush end (mid-January) of the active fiscal year. Furthermore, under Section 94, this estimate dictates your mandatory advance installment payments due in three parts: 40% by Poush end, 70% by Chaitra end, and 100% by Ashadh end. Our premium business consultancy Kathmandu assists entities in building legally accurate fiscal projections to comply fully with these timelines.

Failing to submit your forecast or deliberately understating your projected figures subjects your business to severe financial interest. Under Section 117(1)(Kha) of the Income Tax Act, 2058, failure to submit an estimated tax return within the prescribed deadline results in an administrative fine of Rs. 5,000 for each late period. More significantly, under Section 118, if your estimated installment payments are less than 90% of your actual final tax liability evaluated at year-end, the IRD charges interest calculated at the rate of 15% per annum on the deficit amount for each month of underpayment.

Process: Estimated Tax Return

Forecast Net Annual Assessable Income

Review your real-time accounting books for the first six months of the fiscal year and project your total revenue, deductible business expenses, and net profit for the entire year.

Compute Estimated Advance Tax Liability

Apply the current corporate tax rates to your projected net business income to determine your total annual tax liability, noting that your first installment requires a 40% deposit.

Submit Electronic Return via IRD Portal

Log into the IRD taxpayer portal, navigate to the ‘Estimated Tax Return Submission’ section, request a new Submission Number, input your calculated income forecasts, and transmit the return online.

Generate and Pay First Installment Token

Access the payment voucher module on the portal, lock in the 40% advance tax token, and deposit the required sum into the government treasury by Poush end to ensure complete Tax Compliance in Nepal.

Ready to file your Estimated Tax Return?

Filing complex financial projections with the tax administration requires precise bookkeeping and deep knowledge of current tax laws. Present Consultants Private Limited provides professional corporate planning to handle your mid-year forecasts, online system submissions, and installment computations flawlessly. Contact our premium business consultancy Kathmandu today to secure your tax files and eliminate expensive system interest charges.