A minor scuffle took place between the agitating Tibetans and the security personnel as they broke up the protest.
Security personnel detained some 54 Tibetan refugees, including 19 women from Jawalakhel in Lalitpur district.
However, eye-witnesses said over 70 Tibetans were detained. Media reports said police tore down banners and photos of Tibetan spiritual leader Dalai Lama.
The agitated Tibetans shouted anti-China slogans and called for a "free Tibet".
Ten Tibetans, including monks, former monks and a nun have self-immolated since March in Tibet in protest against Chinese rule.
Nepal is home to around 20,000 exiled Tibetans and the capital has been the scene of several anti-China protests.
China has stepped up pressure on Nepal to better control the Tibetan refugees within its borders and stop the protests.
Nepal supports 'one-China policy' that views Tibet as an integral part of China. It has repeatedly assured its giant northern neighbour that it will not allow its territory to be used against the communist nation.
Despite tight security enforced by the Nepalese and Chinese government in the border areas, every year hundreds of Tibetans cross the border on their way to meet the Dalai Lama in Dharamshala, where he is based since fleeing from his motherland in 1959.