Capital Gains Tax Rates Reduced, Decision Published in Gazette

The government has formally published its decision to reduce the capital gains tax on share investments in the Nepal Gazette, with the revised tax rates coming into effect from today.

According to a notice issued by the Ministry of Finance, the capital gains tax rate for resident natural persons on gains from the disposal of securities listed with the Securities Board of Nepal (SEBON) has been revised based on the holding period of the shares.

Under the new provision, a 3.75% capital gains tax will be levied on gains from shares held for more than 365 days.

Similarly, gains from shares held for 365 days or less will be subject to a 5% capital gains tax.

The revised rates will be implemented from today, with investors subject to the new capital gains tax provisions from the effective date.

Previously, capital gains tax rates for short-term and long-term investors were comparatively higher and differentiated based on the holding period.

The government's decision is expected to provide relief to investors participating in the stock market, particularly those making long-term investments.

According to the Ministry of Finance, the decision was made by the Council of Ministers by exercising the authority granted under Sub-section (1) of Section 18 of the Economic Act, 2083. The decision has now been formally published in the Nepal Gazette, making the revised capital gains tax provisions officially applicable.