You get visa at the airport upon arrival... Visa fee is $40 for 1 month and $100 for 3 months... How long you are planning to stay? Don't forget to take couple of PP size photo..

Thanks Porsche2014! My plan is to stay for around 4 months but let's see what the situation would be. Didn't think of carrying pp size photos so that was really good info. Perhaps no visa without photos?.
One more question: is the rule same for adults and minors? What about babies under 3 years?
Appreciated your response!

Cablecar,

The rules are the same for children (under 3) as well.

If you don't have a PP photo, they can take & provide instant picture at the airport for Rupees 250. You can pay them dollars & they return any change in Nepalese currency.

When you enter the immigration area at the airport, there are a few wooden circular islands that hold Visa forms for foreigners. Those sections that have these forms clearly state 'Visa forms for Foreigners'. Be sure to complete the form (one each for each passenger) & take them to the visa section, which is located in the left front side of the immigration hall.

Hope this helps!

If you are planning to stay longer you can also apply for Non-Tourist Visa based on "Foreigner of Nepalese origin or such children of a Nepalese father or mother, who have come Nepal to visit their relatives or Father, Mother, Brother or sister of the foreigner married with Nepalese citizen having recommendation letter of relationship from the concern embassy, who have come to Nepal to visit her/him".... Upon arrival get visa for a month and later you can apply for Non-Tourist Visa... I believe it will be cheaper than tourist visa... Check the links below...

Fees chargeable while issuing, or extending the validity of, the non-tourist visa:
1. If the non-tourist visa of 30 days has to be issued at the time of entry, 30 American Dollars or convertible foreign currency equivalent thereto.
2. Nepalese currency equivalent to five (5) American Dollars per month for the foreigner of Nepalese origin and the foreign passport holding child of Nepalese father or mother.
3. In issuing the non-tourist visa to a foreigner who gets married with a Nepalese citizen, Nepalese currency equivalent to ten (10) American Dollars per month.

http://www.nepalimmigration.gov.np/?page_id=88

http://online.nepalimmigration.gov.np/non-tourist-visa-dependent

Children do not have to pay visa fee

1. Get one month visa at the airport.
2. The next day (this will take a while), go to your local wada (municipality) and get a document of your relation, son/daughter of the local person who owns a Nepali citizenship etc etc. I have no clue how long it will take but I have heard it will be a pain.
3. After you have the relation document, go to immigration office near Dillibazar. Take your foreign passport, recent picture and the relationship document. There is an office outside, pay them some money and they will take care of it, $3-$5.
4. Go to room 206 (3rd floor) and submit the document. Both party of the relationship should be there (son and dad both). They will ask few questions and once approved,you pay the fees (room 106 downstairs, 2nd floor). It is $5 for a months. You can get visa for a year at a single visit. Then they will tell you to leave your passport, the original relationship document and come back after few hour and half.
5. Eat some good food at Ananmnagar, chill out and then go pick up your passport. Done.

Thanks a lot Porche2014, SuperSixNine, Yuvaraj and Vhootee! @Yuvaraj, you mentioned that children don't need to pay visa fees. Your experience?

Anyway, really appreciated all you guys to take time in responding. Loved the way you guys write too.