Debenture calculator Nepal: what a debenture pays you after tax

How the calculator works out a debenture

Each payment is the coupon × Rs 1,000 ÷ the payments in a year, on every unit, whatever you paid for it. Nepali debentures pay half-yearly unless they say otherwise: 67 of the 75 in nepsealpha's debenture tracker in August 2025 paid half-yearly and 8 quarterly, and RBB's and Prime's 2026 issues pay every six months. Pick quarterly for the ones that do.

At maturity the issuer repays the face value, Rs 1,000 a unit, with the last payment. For a debenture you buy part-way through its life, enter the years left, a fraction if need be: NEPSE adds no accrued interest to the price, so the first payment is a full one and simply comes sooner.

For a debenture you get in a public issue, leave the price at Rs 1,000. The full rules, the list of every listed debenture and its price, and how to apply are in the debenture guide.

Debenture interest after the 6% tax

The issuer deducts 6% of every interest payment and pays it to the Inland Revenue Department: section 88(3) of the Income Tax Act 2058, the same section and rate as for fixed deposit interest. For an individual it is final under section 92, so nothing more is owed and the interest is not added to your income for tax.

On Rs 1,00,000 in a 6% debenture, each half-year's Rs 3,000 loses Rs 180 and pays Rs 2,820. A coupon after tax is the coupon × 0.94: 6% becomes 5.64%.

Current yield and yield to maturity

The current yield is a year's interest after tax ÷ the price paid. The yield to maturity also counts that you get Rs 1,000 back, not what you paid: it is the yearly rate that makes every payment after tax, and the Rs 1,000, worth exactly the price. Bought at Rs 1,000 the two are the same, the coupon after tax.

Above Rs 1,000 the yield to maturity is lower than the coupon after tax; below it, higher. On 4 November 2026, 6.25% Prime Bank Debenture 2093 closed at Rs 1,115. With about 9 years 8 months to run, its current yield after tax there was 5.27% and its yield to maturity 4.64%, against 5.875% for someone who got it at Rs 1,000. It would have to reach about Rs 1,190 before it yielded no more than a 4% FD after tax, 3.76%.

Buying on NEPSE: the price and the costs

Debentures pay a lower commission than shares. Two brokers' published tariffs, read 5 November 2026, give the same bands for corporate debentures:

• Up to Rs 5,00,000: 0.1%, at least Rs 10.
• Rs 5,00,001 to Rs 50,00,000: 0.05%.
• Above Rs 50,00,000: 0.02%.
• SEBON's fee: 0.01% of the value. DP charge: Rs 25 per debenture per settlement.
• Example: 100 units of PBD93 at Rs 1,115 cost Rs 1,11,647.65 in all, Rs 1,116.48 a unit. Entered as the price, that brings the yield to maturity after tax to 4.62%.

A debenture against a fixed deposit

At the same rate, a debenture and an FD pay the same interest after tax. Rs 1,00,000 at 4% for five years brings Rs 18,800 either way: in a debenture paid half-yearly, or in an FD paid out quarterly (Rs 18,800). An FD that adds the interest to itself each quarter makes a little more, Rs 20,577.46, because the interest earns interest.

The difference is the rate. In Kartik 2083 a bank's newest debenture paid about 1.75 to 3 points more than its own top FD rate: RBB's 6% against its 4.00% for above 5 years. The calculator shows the same money in an FD at 4%, about the average top rate of the 20 commercial banks; change it in the FD calculator, which works FDs to the same rules.

The higher rate pays for real differences: a debenture is not covered by the Rs 5 lakh deposit guarantee, is usually repaid after depositors if the bank fails, and can be cashed early only by selling it on NEPSE, where trading is thin.

Debenture interest rates now

The 13 debentures SEBON approved in fiscal years 2081/82 to 2083/84 pay 6% to 9%; the latest, RBB's, 6%. In SEBON's pipeline on 2083/07/13 (30 October 2026), Nabil has asked to sell one at 5.5%. Older debentures pay up to 12%, but 31 of the 32 that traded on 4 November 2026 closed above Rs 1,000, so their yields are well below their coupons: enter the price to see by how much.

What the calculator leaves out

• Tax on a gain from selling. Gains on listed securities are taxed at settlement (3.75% or 5% for individuals since 22 September 2026), but nothing we read says how debentures are treated; ask your broker.
• The bank's ability to pay. The sums assume every payment is made. Check the credit rating and the bank's quarterly report.
• Inflation. A fixed coupon buys less each year when prices rise.
• The exact day count. Issuers work interest by the day, so a payment can differ from this by a few rupees.