Capital gains tax on NEPSE shares: the 5% and 3.75% rates explained

When you sell shares on NEPSE at a profit, capital gains tax (CGT) is deducted automatically before the money reaches you. The rates changed twice in 2026, so many investors aren't sure which one applies to them. This guide covers resident individual investors trading listed shares.

The current rates

Since 22 September 2026:

The rate depends on the date of the sale, not the date you bought. A sale on or after 22 September 2026 uses these rates, however long ago you bought the shares.

How the rates got here

The Finance Act for fiscal year 2083/84 raised the rates to 10% and 7.5% from mid-July 2026. A government notice published in the Nepal Gazette then cut them to 5% and 3.75% from 22 September 2026.

What counts as "short term"

Shares held for 365 days or less are short term. The count is in calendar days from the purchase date to the sale date.

When you sell, MeroShare asks how many of the shares being sold were held for more than 365 days and how many for less. If you bought the same company at different times, part of one sale can be long term and part short term, each taxed at its own rate.

How the gain is worked out

CGT applies to the gain, not the sale amount:

Gain = sale proceeds after fees − cost of the shares sold

• Sale proceeds after fees is the sale amount minus broker commission, the SEBON fee and the DP charge on the sale.
• Cost comes from your WACC (weighted average cost of capital), the average cost per share that MeroShare holds for each company. It includes the fees you paid when buying, not just the share price.

Because WACC is an average over all your purchases of that company, it changes every time you buy more. Make sure the WACC in MeroShare is correct before you sell, since the tax is worked out from it. If it's wrong or missing, the cost may default to the share's face value, and you'd pay tax on a gain you didn't make.

A worked example

You buy 200 shares at Rs 500 and sell them 40 days later at Rs 520:

Had you held the shares for more than 365 days, the CGT would have been 3.75%, or Rs 121.73.

How the tax is collected

You don't file anything for CGT on listed shares. When the sale settles (two trading days after the trade), the clearing system works out the gain from your MeroShare cost and deducts the tax. Your broker pays you the rest. For a resident individual, the tax deducted at settlement is the final tax on that gain.

Two things investors often get wrong:

• Losses don't reduce the tax on other sales. If you lose money on one company and make money on another, you pay CGT on the profitable sale anyway. A loss on one sale isn't set off against gains elsewhere.
• No gain, no tax. If a sale makes a loss or exactly breaks even, there's no CGT on it.

Dividends are taxed differently

Cash dividends are taxed at 5%, deducted by the company before payment. Bonus shares carry a tax of 5% of their face value (Rs 5 on a Rs 100 share), which the company usually collects through the cash dividend paid alongside the bonus. These taxes are separate from CGT.

Useful tools

• The share calculator works out the full sale bill, the CGT and your net profit for any date, using the rates in force that day.
• The WACC calculator helps you check your average cost against MeroShare before you sell.
• The dividend calculator covers cash dividend and bonus share tax.
• The NepseLytics portfolio applies the rate in force on each sale date automatically.

This article explains tax rules for individual investors in general terms. It isn't tax or investment advice. Companies, non-residents and professional traders are taxed differently; check with the Inland Revenue Department or a tax adviser for your situation.