The event, held on Sunday evening, also saw Tenzin Khechoe and Tenzin Nordron being named first and second runners-up, respectively.
Paldon, 21, is a cabin crew member of Spice Jet and hails from Kollegal.
"I will use the title of Miss Tibet to inspire the younger generations in every way possible. The title will also be immensely helpful to my modelling career," Paldon said.
"The modelling agency has already come forward with more offers."
Pladon, who also won the Miss photogenic title which was decided by online voting, got a cash prize of Rs 1 lakh as well as a two-week trip to Vietnam, sponsored by Claire Huynh Hong Hai.
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The winners were named after seven rounds of contests over the period of three days.
A record of nine contestants from India, United States and Europe took part in the 15th edition of the beauty contest.
Miss Tibet Pageant was introduced in 2002 by Lobsang Wangyal Production.