Income Tax & TDS
Capital Gain Tax in Nepal: Current Share and Land Rates for 2083/84
Capital gain tax in Nepal is charged on the profit earned when an asset is sold for more than its taxable cost. Investors usually face this tax when selling shares, land, buildings or ownership interests in a company.
The current rates are governed by the Income Tax Act 2058 and the Economic Act 2083. For FY 2083/84, Nepal has increased the capital gains tax rates for individual share investors and private property owners.
The tax is normally deducted before the investor receives the sale proceeds. Share brokers handle the deduction during settlement, while the registration authority or Land Revenue Office collects it when land or property ownership is transferred.
Last reviewed: August 2026, for FY 2083/84.
What Is Capital Gains Tax in Nepal?
Capital gains tax is a tax on the profit made from disposing of an asset.
An asset is disposed of when it is:
- Sold
- Transferred
- Exchanged
- Surrendered
- Cancelled
- Otherwise removed from the owner’s control
For most investors, the basic calculation is:
Capital gain = Sale proceeds − Adjusted cost of the asset
The adjusted cost can include the original purchase price and eligible expenses connected with buying or selling the asset.
Capital gains tax is generally charged on the profit, not the full amount received from the sale.
Simple Capital Gain Example
Suppose an investor buys an asset for NPR 500,000 and later sells it for NPR 650,000.
| Particulars | Amount |
|---|---|
| Sale proceeds | NPR 650,000 |
| Purchase and eligible cost | NPR 500,000 |
| Capital gain | NPR 150,000 |
The applicable tax rate is applied to the NPR 150,000 gain.
If the asset is sold for NPR 450,000, there is no capital gain in this simplified example. However, transaction charges may still apply.
Current Capital Gains Tax Rates for FY 2083/84
The Economic Act 2083 increased the capital gains tax rates for resident natural persons.
Older tax guides may still show 5% for long-term gains and 7.5% for short-term gains. Those were the earlier rates and should not be used for transactions taking place under FY 2083/84.
| Asset and holding period | Current FY 2083/84 rate | Earlier rate up to FY 2082/83 |
|---|---|---|
| Listed shares held for more than 365 days | 7.5% | 5% |
| Listed shares held for 365 days or less | 10% | 7.5% |
| Private land/building held for 5 years or more | 7.5% | 5% |
| Private land/building held for less than 5 years | 10% | 7.5% |
The current rates are confirmed in the IRD tax rates for natural persons for FY 2083/84 and the Economic Act 2083.
When Did the New Rates Take Effect?
The Finance Act 2083 officially increased the individual share CGT to 7.5% for long-term gains and 10% for short-term gains. Similarly, the long-term property CGT rate was increased to 7.5% and the short-term rate to 10%. These new rates became effective on Shrawan 1, 2083.
Share Market Capital Gains Tax in Nepal
When people search for share market tax Nepal, they are usually looking for the tax deducted when shares are sold through NEPSE.
For a resident individual, the applicable rate depends on how long the listed shares were held.
Current Share Capital Gains Tax Rates
| Investor and security type | Holding period | CGT rate |
|---|---|---|
| Resident individual selling listed shares | More than 365 days | 7.5% |
| Resident individual selling listed shares | 365 days or less | 10% |
| Resident entity selling listed shares | Any holding period | 10% |
| Other or non-resident seller of listed shares | Any holding period | 25% |
| Resident individual selling unlisted shares | Not divided by holding period | 10% |
| Resident entity selling unlisted shares | Not divided by holding period | 15% |
| Other seller of unlisted shares | Not divided by holding period | 25% |
This guide mainly focuses on resident individual investors. Companies, institutional investors, non-residents and investors carrying on share trading as a business may receive different tax treatment.
What Counts as a Long-Term Share Holding?
For listed shares, a long-term holding means the investor owned the shares for more than 365 days.
The exact boundary matters:
- Shares held for 366 days or more: 7.5%
- Shares held for exactly 365 days: 10%
- Shares held for fewer than 365 days: 10%
Do not assume that “one year” always qualifies for the lower rate. The law specifically uses more than 365 days.
Long-Term Share Gain Example
Suppose an individual investor has the following transaction:
| Particulars | Amount |
|---|---|
| Share sale proceeds | NPR 700,000 |
| Adjusted purchase cost | NPR 500,000 |
| Capital gain | NPR 200,000 |
| Holding period | 400 days |
| Applicable CGT rate | 7.5% |
| Capital gains tax | NPR 15,000 |
The investor’s CGT would be:
NPR 200,000 × 7.5% = NPR 15,000
Broker commission, SEBON charges, DP charges and other applicable settlement costs must also be considered when calculating the final amount receivable.
Short-Term Share Gain Example
Now assume the same NPR 200,000 profit was made on shares held for only 200 days.
| Particulars | Amount |
|---|---|
| Capital gain | NPR 200,000 |
| Holding period | 200 days |
| Applicable CGT rate | 10% |
| Capital gains tax | NPR 20,000 |
The tax increases to:
NPR 200,000 × 10% = NPR 20,000
The shorter holding period results in NPR 5,000 more tax on the same gain.
How the Purchase Cost of Shares Is Calculated
Section 95A of the Income Tax Act requires listed-share gains to be calculated using the weighted average cost of acquisition, commonly called WACC.
WACC is important when the investor buys the same company’s shares at different prices.
Updating WACC in MeroShare (EDIS)
For individual investors, the WACC and holding period calculations are handled digitally through CDS and Clearing Limited (CDSC). Before transferring sold shares via EDIS, you must log into your MeroShare account, go to the “My Purchase Source” tab to confirm your WACC, and then update the “My Holdings” tab to declare whether the shares are short-term or long-term.
WACC Example
Suppose an investor makes two purchases:
| Purchase | Number of shares | Price per share | Total cost |
|---|---|---|---|
| First purchase | 100 | NPR 300 | NPR 30,000 |
| Second purchase | 200 | NPR 450 | NPR 90,000 |
| Total | 300 | NPR 120,000 |
The weighted average price is:
NPR 120,000 ÷ 300 shares = NPR 400 per share
If the investor later sells 150 shares at NPR 550 each:
| Calculation | Amount |
|---|---|
| Sale value | NPR 82,500 |
| WACC of 150 shares | NPR 60,000 |
| Gain before eligible transaction adjustments | NPR 22,500 |
The applicable 7.5% or 10% rate is then selected based on the holding period.
Investors should review and confirm their purchase source and WACC records in the securities system. An incorrect purchase cost can result in too much or too little tax being deducted.
How Share CGT Is Deducted at Source
Investors normally do not deposit share capital gains tax separately after every NEPSE sale.
The deduction takes place during the share settlement process.
The practical process is:
- The investor sells listed shares through a licensed broker.
- The sale is matched and completed through NEPSE.
- The purchase cost and holding period are identified.
- The taxable gain is calculated using the applicable WACC.
- The 7.5% or 10% rate is applied to the gain.
- CGT and transaction charges are deducted from the gross sale proceeds.
- The remaining amount is credited to the investor’s broker account or bank account.
The investor therefore receives a net amount after deductions.
Check Your Broker Statement
The bank credit alone does not show the full transaction.
Investors should compare the bank credit with the broker statement or contract note. Check the following items:
- Gross sale amount
- Purchase cost or WACC
- Capital gain
- Holding period
- CGT rate
- CGT amount
- Broker commission
- SEBON fee
- DP charge
- Final amount receivable
If the broker applies 10% when the shares were held for more than 365 days, ask the broker to check the purchase-source and holding records.
Is Share Capital Gains Tax a Final Tax?
Section 95A describes CGT deduction as advance tax collection. It also allows the deducted amount to be credited against the taxpayer’s annual tax liability where an annual return is filed.
However, the Economic Act 2083 amended Section 92. It allows qualifying resident natural persons receiving gains under Section 95A(2) to treat the withholding as final when they do not choose to file an income return for that gain.
The correct treatment can depend on whether:
- The seller is a natural person or an entity
- The investment is personal or part of a business
- The investor files an annual income tax return
- The shares are listed or unlisted
- The investor is resident or non-resident
An individual with substantial trading activity, business income or several types of investment income should confirm the annual filing position with a tax professional.
Can You Claim Capital Losses?
One sharp edge for casual retail investors is that CGT is levied per transaction. Because it is often treated as a final tax for natural persons not operating a registered share-trading business, a loss on one stock sale does not net against a gain on another trade. You pay the tax on every profitable sale, regardless of any losses elsewhere in your portfolio.
Real Estate and Land Tax in Nepal
The phrase land tax Nepal can refer to several different charges. These may include annual land revenue, registration fees, local taxes and capital gains tax.
Capital gains tax applies to the profit made when taxable land, a house or a private building is sold.
It is separate from:
- Land registration charges
- Ownership transfer fees
- Provincial registration fees
- Local government property tax
- Annual land revenue or Malpot
- Service and administrative charges
These other charges may be based on the property value and can vary by province or local authority.
Current Capital Gains Tax on Land and Buildings
For a resident natural person disposing of taxable private land or a private building, the current rates are:
| Property holding period | Current CGT rate |
|---|---|
| Property held for 5 years or more | 7.5% of capital gain |
| Property held for less than 5 years | 10% of capital gain |
The five-year boundary differs from the share-market boundary.
For land and buildings:
- Exactly 5 years qualifies for the 7.5% rate
- More than 5 years qualifies for the 7.5% rate
- Less than 5 years attracts the 10% rate
Long-Term Property Sale Example
Suppose an individual bought land for NPR 5,000,000. Eligible acquisition and transfer costs were NPR 200,000.
The land is sold after six years for NPR 7,000,000.
| Particulars | Amount |
|---|---|
| Sale value | NPR 7,000,000 |
| Purchase and eligible costs | NPR 5,200,000 |
| Capital gain | NPR 1,800,000 |
| Holding period | 6 years |
| Applicable rate | 7.5% |
| Estimated CGT | NPR 135,000 |
The calculation is:
NPR 1,800,000 × 7.5% = NPR 135,000
This is an illustrative calculation. The registration authority will determine the acceptable value and supporting costs under the applicable law.
Short-Term Property Sale Example
If the same land was sold after three years, the current rate would be 10%.
NPR 1,800,000 × 10% = NPR 180,000
The shorter holding period increases the tax by NPR 45,000.
Property Transactions That Need Separate Treatment
The standard 7.5% and 10% rates apply to a natural person’s taxable non-business land or private building.
Different rules can apply in other situations.
Property Held as Business Stock
If a person regularly buys and sells land as a business, the land may be treated as trading stock or a business asset.
The resulting profit can be treated as business income instead of a personal capital gain. The 7.5% or 10% personal-property rates may not settle the full tax liability.
Property Sold by Other Persons or Entities
For land or buildings outside the natural-person private-property rule, Section 95A provides for advance tax collection at 1.5% of the disposal value in applicable cases.
This 1.5% is charged on the disposal value, not only on the gain. It should not be directly compared with the 7.5% or 10% rates applied to an individual’s capital gain.
Compulsory Government Acquisition
The Economic Act 2083 introduced a 2.5% rate for qualifying non-business taxable land or buildings involuntarily disposed of because of acquisition under a Government of Nepal decision.
Property Given to the Government Without Payment
No capital gains tax is collected when a natural person gives qualifying land or a private building free of cost to the Government of Nepal, a provincial government or a local level.
Are All Private Home Sales Taxable?
Not every transfer of land or a private home is treated as a taxable non-business asset.
Under the Income Tax Act 2058, exclusions can apply to:
- A qualifying private residence owned continuously for at least 10 years
- A qualifying private residence occupied by the owner for a total of at least 10 years
- Certain land, house or private-building disposals below the statutory value limit
- Certain transfers within three generations that are not purchases or sales
- Business assets, depreciable assets or trading stock, which follow separate tax rules
The private-residence exemption has strict ownership, occupancy and area conditions. Owning a house for 10 years alone may not be enough if the occupancy requirement is not met.
Property owners should confirm the exemption before signing the sale deed.
How Land Capital Gains Tax Is Deducted at Source
Capital gains tax on land and private buildings is normally collected during ownership registration.
The process generally works as follows:
- The buyer and seller prepare the property transfer deed.
- The previous ownership and purchase documents are submitted.
- The registration authority checks the ownership period.
- The sale value and legally accepted cost are reviewed.
- The capital gain is calculated.
- The applicable 7.5%, 10% or other prescribed rate is applied.
- The seller pays the CGT before or during registration.
- The ownership transfer is completed after the required taxes and fees are paid.
Traditionally, this work is handled through the Land Revenue Office. The Economic Act 2083 now uses the broader term “registration authority” in Section 95A.
The seller should keep the original CGT receipt. It may be needed for tax records, bank documentation, future property transactions or an income tax return.
Documents to Keep for a Property Sale
A property owner should retain:
- Lalpurja or ownership certificate
- Previous purchase deed
- Current sale deed
- Proof of the original purchase price
- Registration and transfer-fee receipts
- Evidence of eligible property improvement costs
- Capital gains tax receipt
- Citizenship and PAN details
- Bank payment or cheque records
- Loan-settlement documents, where applicable
Without the previous purchase deed and cost records, proving the correct taxable gain can become difficult.
Capital Gains Tax Under the Income Tax Act 2058
The Income Tax Act 2058 provides the main legal structure for calculating and collecting capital gains tax in Nepal.
Important provisions include:
- Section 37: Calculation of gains from the disposal of assets and liabilities
- Section 95A: Advance tax collection on shares, land, buildings and other specified transactions
- Section 92: Treatment of prescribed payments as final withholding payments
- Section 95A(2A): Use of weighted average cost for listed securities
- Section 95A(5): Tax collection on a natural person’s taxable land and private building
The Income Tax Act 2058 should be read together with the latest Economic Act because annual amendments can change the rates and procedures.
Common Capital Gains Tax Mistakes
Using the Old 5% and 7.5% Rates
For FY 2083/84, resident individuals generally face 7.5% on qualifying long-term gains and 10% on short-term gains.
Applying the Rate to the Full Share Sale Amount
For an individual listed-share investor, CGT is calculated on the gain, not the entire sale proceeds.
Using the Wrong Holding-Period Boundary
Listed shares require more than 365 days for the lower rate. Private land or buildings require five years or more.
Ignoring WACC
When the same share is purchased at several prices, the weighted average cost is used. Selecting only the cheapest or latest purchase price can produce the wrong gain.
Treating the Bank Credit as the Sale Value
The amount credited to the bank is usually net of CGT and other charges. Use the gross sale statement when reviewing the calculation.
Confusing CGT With Property Registration Fees
Capital gains tax, registration fees and annual land taxes are separate liabilities.
Losing the Tax Receipt
A tax deduction shown in a broker ledger or property receipt should be retained. It may be needed for tax credit, return filing or verification.
Frequently Asked Questions
What is the current capital gain tax in Nepal for shares?
For FY 2083/84, a resident individual generally pays 7.5% on the gain from listed shares held for more than 365 days and 10% when held for 365 days or less.
Is the long-term share CGT rate still 5%?
No. The 5% rate applied in earlier years. The Economic Act 2083 increased the long-term listed-share rate for resident individuals to 7.5%.
What is the current tax rate on land sold in Nepal?
A resident individual generally pays 7.5% on the gain from taxable private land or a building held for five years or more. The rate is 10% when held for less than five years.
Who deducts capital gains tax on NEPSE shares?
The tax is calculated and deducted through the securities settlement process. In practice, the licensed broker reflects the CGT deduction before releasing the net sale proceeds to the investor.
Who collects capital gains tax on land?
The relevant registration authority or Land Revenue Office collects the tax when the property transfer is registered.
Do I pay capital gains tax if I sell shares at a loss?
There is normally no capital gain tax on a transaction that produces no taxable gain. Broker commission, SEBON fees, DP charges and other transaction costs may still apply.
Is capital gains tax the same as income tax?
Capital gains tax is part of Nepal’s income tax system, but it applies specifically to gains from disposing of assets. Salary and business income follow different calculation rules.
Final Advice for Investors
Before selling shares, check the acquisition date, WACC and expected taxable gain. Do not rely only on the amount shown as the current market value.
Before selling land or a building, collect the old purchase deed, cost records and ownership documents. Confirm whether the property qualifies as a taxable non-business asset and whether the five-year holding rule has been met.
Most investors receive their money after CGT has already been deducted. Still, the seller remains responsible for checking whether the cost, holding period and rate were correctly applied.
Capital gains tax rates can change through each Economic Act. Confirm the transaction-year rate with the Inland Revenue Department or a qualified tax professional before completing a high-value sale.