Nepal Cuts Share Capital Gains Tax to 3.75% and 5%, Effective 22 September 2026

Updated 22 Sept 2026 · 4 min read

The capital gains tax cut on share transactions is now in the Nepal Gazette. Long-term gains are taxed at 3.75% and short-term at 5% from 22 September 2026. What changed, what it saves, and what did not make it in.

The capital gains tax cut on share transactions is no longer a proposal. The notice was published in the Nepal Gazette on 21 September 2026 and the new rates apply from 22 September 2026. Long-term gains are taxed at 3.75% and short-term gains at 5% — both rates exactly half of what they were the day before.

The rates in force

The 365-day line is unchanged, and so is everything about how the gain itself is measured: tax is charged on the gain, not the sale value, a loss creates no liability, and the gain is computed against your weighted average cost. Only the two percentages moved.

The Ministry of Finance notice records the change as a Council of Ministers decision taken under the power granted by Section 18(1) of the Economic Act, 2083. That is the route that let the rates change by gazette notice rather than by waiting for the next budget.

What it saves

Same trade, before and after — 100 shares bought at Rs 500, sold at Rs 550 inside a year:

The tax halves, but the rest of the round trip does not: broker commission, the 0.015% SEBON fee and the flat Rs 25 per scrip DP charge are untouched by this notice. On small positions those fixed costs, not the tax, still set your breakeven — the full cost breakdown is unchanged apart from the two rates.

The gap between the two rates matters less now

Because both rates were halved rather than compressed, the incentive to hold past a year survives in relative terms — long-term is still taxed at 75% of the short-term rate. In absolute terms it is much weaker. Holding an extra month to cross the 365-day line used to save 2.5 percentage points of the gain; it now saves 1.25. On a Rs 100,000 gain that is Rs 1,250 instead of Rs 2,500. Letting tax drive the sell decision was always a weak argument, and it is now half as strong.

What did not come with it

The gazette notice changes the rates and nothing else. The two other items from the reform proposal — the rule letting losses offset gains within the same income year, and treating capital gains tax as a final tax for individuals — are not in it.

So the transaction-by-transaction assessment stands. Sell one scrip at a Rs 40,000 loss and another at a Rs 50,000 profit in the same income year and you are still taxed on the full Rs 50,000. Netting requires a change to the tax law and to the settlement systems that compute the deduction, which is a slower path than a rate notice. Treat it as still pending.

Practical notes

• The rate is set at the point of sale. Shares bought years ago and sold on or after 22 September get the new rate; the notice sets rates going forward and does not carve out earlier purchases.
• The tax is still deducted at source. CDS and Clearing computes and withholds it on the sale, so the lower rate should show up on your contract note without you filing anything.
• Check your holding period before selling. The 3.75% / 5% split turns on 365 days, so an accurate purchase date and cost basis still decides the bill. The portfolio tracker keeps both per holding and applies the schedule in force to each transaction.
• Sales settled before 22 September keep the old rates. Anything already taxed at 7.5% or 10% is done; there is no retrospective refund in the notice.

This article describes a tax change for general information. It is not investment, tax or legal advice — confirm your own position with a qualified advisor before acting.

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