Capital gains tax on NEPSE shares

The rates

For individual investors, capital gains tax (CGT) on listed shares has two rates. Institutions follow different rules, and this guide covers individuals only.

• 7.5% of the profit if held under one year
• 5% of the profit if held one year or more

What counts as profit

Profit is what you receive from the sale after selling costs, minus what you paid including buying costs.

Selling costs are broker commission, the 0.015% SEBON fee and the Rs 25 DP charge. Buying costs are broker commission and the SEBON fee.

Holding period

The holding period starts on the day you bought the shares. Once a holding passes one year, selling it pays 5% instead of 7.5%.

StockYan's portfolio shows when a holding crosses one year, so you can see when the lower rate applies.

Keep your cost on record

Tax is worked out from your buying cost. Keep the purchase price of your shares up to date in MeroShare so the profit and the tax come out right.

Near the one-year mark

If a holding is close to one year old, the lower rate can make a real difference on a large profit. The price can also move a lot in that time, so tax is one thing to weigh among several.

No profit, no tax

If you sell at a loss, there is no capital gains tax on that sale. You still pay commission, the SEBON fee and the DP charge.

Working it out step by step

Follow these steps for any sale.

• Sale amount minus selling costs
• Minus buying amount and buying costs
• That is your profit
• Profit times 7.5% or 5% is the tax