Information and communication technology (ICT) plays an important role in service delivery to the entire socio-economic and political development of the country. United Nations Department of Economic and Social Affairs measure the status of e-government by assessing indicators and develop an e-government development index. Considering the importance of ICT, the study has been carried out; this article compares Nepal's digital government status with SAARC countries on the basis of United Nations e-government survey 2012 to 2018. The article also presents the challenges and opportunities for implementing digital government. To implement digital policy of Nepalese government, Nepal has been facing many challenges such as Insufficient infrastructure, illiteracy, language barrier, lack of  human resources, digital divide, political instability and sustainability, limited financial resources, insufficient law, rule, regulation, strategy and plans, lack of integrity of system, employee barrier, lack of  feasibility  study, rapidly changing  technology, security and privacy issues. Despite these challenges, there are many opportunities like immerging Social Media, Cloud Computing, the rapid development of mobile technology, the digital government experience of developed and developing countries. Regarding these issues, this paper presents few opportunities and challenges of digital government.