Budget 2075/76 increases Capital Gain Tax; Individuals to pay 7.5% and Institutions to pay 10% for gain in stock market

The budget for the fiscal year unveiled today had its shares of positives and negatives. However, the stock market investors were the most to be affected by the budget for the fiscal year 2075/76.

The presented budget has increased the rate of capital gain tax for all the investors. Incase of gain from sale of listed shares a resident natural person will be entitled to pay 7.5%,  resident entity will be entitled to pay 10% and others will be entitled to pay 25% as capital gain tax. Previously, the tax rate was 5% and 10% for resident individual and others respectively.

Similarly, for the gain from sale on non-listed shares, a resident natural person will be entitled to pay 10%, resident entity will be entitled to pay 15% and others will be entitled to pay 25% as capital gain tax. Previously, the tax rate was 10% for resident individual and 15% for others.

But the budget has also discarded the Value Added Tax (VAT) imposed on the commission paid to the brokers.

The increase in capital gain tax is likely to demoralise the investors as well as is supposed to keep new investors away from the market. The currently instable market will not be helped such decision taken by the government.