Calculate the exact tax owed when selling NEPSE shares (5% vs 7.5%) and real estate (5% vs 7.5%) - including holding period rules and Malpot valuation traps.
Capital Gains Tax (CGT) is an income tax levied on the net profit realized from the disposition of capital assets, principally shares traded on the Nepal Stock Exchange and parcels of land or residential real estate transferred at the Land Revenue Office (Malpot Karyalaya). Under the Income Tax Act 2058, CGT applies only when the disposal selling price exceeds the purchase cost plus authorized improvement and transaction expenses.
Selling an ancestral plot of land in Pokhara or liquidating a large stock position can trigger millions of rupees in tax liability. In Nepal, timing your sale by just one week can save you tens of thousands of rupees: selling shares on Day 366 instead of Day 364 drops your tax rate from 7.5% to 5.0% (a 33% tax reduction). Similarly, selling land after 5 completed years cuts your property capital gains tax from 7.5% to 5.0%.
For NEPSE shares, check your Demat credit date in MeroShare (threshold is 365 days). For land and property, check the registration date stamped on your Red Land Ownership Certificate (Lalpurja) (threshold is 5 years).
Net Gain = Gross Sales Value − Selling Broker Fees − WACC Cost (Purchase Price + Purchase Broker Fees + DP Fees). If positive, apply 5.0% (holding > 365 days) or 7.5% (holding ≤ 365 days).
At the Land Revenue Office (Malpot), Capital Gain = Declared Deed Value (which must be at or above Government Minimum Valuation) − Purchase Price on Previous Deed. Apply 5.0% (> 5 years) or 7.5% (≤ 5 years).
Your stockbroker deducts CGT automatically and files it under your PAN. For land, Malpot collects the CGT bank voucher before stamping the deed transfer (Rokka/Dakhil Kharej).
| Asset Class | Holding Period Threshold | CGT Rate (Individual) | CGT Rate (Institutional / Corporate) | Tax Status |
|---|---|---|---|---|
| NEPSE Listed Shares (Long-Term) | More than 365 Days (> 1 Year) | 5.0% on net profit | 10.0% on net profit | Final Withholding (Individual) |
| NEPSE Listed Shares (Short-Term) | 365 Days or Less (<= 1 Year) | 7.5% on net profit | 10.0% on net profit | Final Withholding (Individual) |
| Land & Buildings (Long-Term) | More than 5 Years (> 60 Months) | 5.0% on net gain | 15.0% / Corporate rate | Final Withholding at Malpot |
| Land & Buildings (Short-Term) | 5 Years or Less (<= 60 Months) | 7.5% on net gain | 15.0% / Corporate rate | Final Withholding at Malpot |
| Unlisted Shares (Pvt Ltd Shares) | Any duration | 10.0% on net gain | 15.0% on net gain | Advance / Adjustable Withholding |
A common structural reality in Nepal's land market is the divergence between "Government Minimum Valuation" (Sarkari Mulya) determined by the Land Revenue Office and actual "Market Value" (Chalan-Chalti Mulya). Historically, buyers and sellers under-reported deed values to evade CGT and registration fees. However, IRD and the Department of Land Management now cross-reference banking transactions exceeding NPR 10 Lakh, making accurate deed reporting essential to avoid future anti-money laundering audits.
Bikash bought a commercial plot in Bhaktapur 4 years and 10 months ago for NPR 50 Lakh. He received an offer to sell it for NPR 90 Lakh and was preparing to sign the transfer deed immediately.
His tax advisor pointed out that holding the land for just 2 more months would cross the 5-year statutory threshold. On a net gain of NPR 40 Lakh: selling at 4 years and 10 months incurs 7.5% CGT = NPR 3,00,000. Waiting 60 days to cross 5 years incurs 5.0% CGT = NPR 2,00,000. Bikash delayed the closing by two months, legally saving NPR 1,00,000 in cash taxes.
Goal & Dilemma: Minimizing capital gains tax on an NPR 400,000 net profit in commercial bank shares.
Final contract sale value or deed transfer price in Nepalese Rupees.
WACC for shares; recorded purchase deed price plus legal transfer fees for real estate.
5% for long-term (shares > 1 yr, land > 5 yrs); 7.5% for short-term.
Sold NEPSE stock after 420 days for NPR 5,00,000. Total WACC purchase cost = NPR 3,50,000. Net capital gain = NPR 1,50,000. Because holding > 365 days, long-term CGT rate is 5.0%. Total CGT deducted by broker = 1,50,000 * 0.05 = NPR 7,50,00. If sold on Day 300, tax would be 7.5% = NPR 11,250.
Selling shares on Day 360 instead of Day 366.
Always hold fundamentally sound shares for at least 366 days to capture the lower 5.0% rate.
Losing the previous purchase deed (Lalpurja/Rajinama) when selling land.
Maintain certified copies of your original purchase deed to establish your cost basis at Malpot.
Assuming that selling shares at a loss triggers tax.
If your selling price is below your WACC, your net capital gain is zero and CGT is NPR 0.
For individual retail investors, Capital Gains Tax deducted by your broker is legally treated as a final withholding tax in Nepal.
No. Under the Income Tax Act 2058, losses from securities trading cannot be cross-offset against capital gains realized from real estate or vice versa.
Under Nepali law, the seller (Vikreta) is legally liable for paying the Capital Gains Tax, while the buyer (Kretā) typically pays the Land Registration Pass Fee (Likhat Dastur).
Under CDSC and IRD regulations, bonus shares have a base acquisition cost of NPR 100 per share. When calculated through MeroShare WACC, your blended purchase price across all lots is adjusted automatically.
At the Land Revenue Office (Malpot), individuals pay 5% CGT on net profit if the property was owned for more than 5 years, and 7.5% CGT if owned for 5 years or less.