Capital Gain Tax in Nepal

The capital gain tax in Nepal changed materially on the first day of fiscal year 2083/84. Through the Finance Bill presented with the budget on 29 May 2026, the government raised capital gains tax on both share trading and real estate transactions and, for the first time, declared capital gains tax on share transactions a final tax. Investors who had built their planning around the old 5% and 7.5% rates now face 7.5% and 10% on listed securities, and property owners face 7.5% and 10% on land and building gains. Anyone buying, selling, or holding assets in Nepal needs to understand the new structure before the next transaction.

This guide explains the capital gain tax in Nepal in complete and current detail. It covers the legal framework under the Income Tax Act 2058, the revised 2083/84 rate tables for shares, land, and buildings, the computation methodology with worked examples, the exemptions that still survive, the advance withholding collected at source, the filing process, and the planning strategies that remain lawful under the new rates. Everything is written for individual investors, traders, property owners, companies, and their advisors who need accurate figures for FY 2083/84.

What Is Capital Gain Tax in Nepal?

The Legal Foundation Under the Income Tax Act 2058

The capital gain tax in Nepal arises under the Income Tax Act 2058 on the gain derived from the disposal of an asset or liability. The Act classifies disposals into three categories, each with its own treatment. Depreciable assets are taxed on a pool basis, with gains or losses folded into business income when the pool dissolves. Business assets are taxed at normal business rates, since their gains are simply part of business profit. Non-business chargeable assets, the category that covers personal shares, land, and buildings, receive their own rate schedule and are taxed as investment income.

Section 37 of the Act supplies the computation rule. The gain from a disposal is the amount by which the total incomings of the asset exceed the total outgoings at the time of disposal. In plain language, the sale consideration minus the cost of acquisition, improvement costs, and the costs of the sale itself.

The Two-Layer Collection System

Collection of the capital gain tax in Nepal operates in two layers. Advance tax is withheld at source at the moment of the transaction: by the securities market infrastructure for share sales, and by the land revenue office at the time of property registration. The annual income tax return then reconciles the position, with the advance tax credited against the final liability. For resident individuals on non-business chargeable assets, the withheld amount is generally not final, but no additional liability typically arises beyond it.

Capital Gain Tax Rates in Nepal for FY 2083/84

The 2083/84 Revision: What Changed

The Finance Bill 2083 introduced two headline changes to the capital gain tax in Nepal. First, rates increased. Second, capital gains tax on share transactions was declared final, meaning income on which capital gains tax has been paid will neither be counted as personal income nor fall under the personal income tax bracket. The revised structure applies from the start of FY 2083/84.

Listed Securities: Shares and Debentures

Under the previous structure, resident individuals paid 5% on shares held more than 365 days and 7.5% on shorter holdings, and the tax was not final. The new regime raises both slabs and closes the door on any further personal income tax on the same gain.

Unlisted Securities

Land and Buildings as Non-Business Chargeable Assets

The previous structure applied 5% and 7.5% to these holdings, so the 2083/84 revision raises property gains tax by 2.5 percentage points at both levels. Non-business chargeable asset gains of resident individuals are otherwise taxed at a flat 10% after the applicable exemption threshold, with the land and building schedule taking precedence for property.

Other Categories at a Glance

How to Compute Capital Gain Tax in Nepal

The Computation Formula

The capital gain tax in Nepal is computed on the gain, not the sale price. The formula follows Section 37 directly.

Capital Gain = Selling Price − (Purchase Cost + Improvement Costs + Selling Costs)

Allowable costs include documented renovation and construction expenses, brokerage commissions paid to registered brokers or real estate firms, and legal fees. Undocumented costs are disallowed, which is why record-keeping from the day of acquisition determines the tax bill years later.

Worked Example: Listed Shares

An investor purchases 1,000 shares at NPR 400 each, paying NPR 5 per share in broker commission. Total cost is NPR 405,000. Two years later, the shares are sold at NPR 700 each, with NPR 7 per share in selling costs, producing net consideration of NPR 693,000. The gain is NPR 288,000. As a resident individual holding for more than one year, the applicable rate is 7.5% final. The tax is NPR 21,600, withheld through the market infrastructure at settlement, and no further personal income tax applies to the gain.

Worked Example: Land

A landowner purchases a plot for NPR 3,000,000 and sells it after seven years for NPR 8,000,000, incurring NPR 200,000 in documented selling costs. The gain is NPR 4,800,000. At the 7.5% rate applicable to holdings of five years or more, the tax is NPR 360,000. The land revenue office withholds advance tax at registration, computed on the gain basis prescribed for individuals, and the annual return reconciles the position.

Exemptions and Reliefs Under Capital Gain Tax in Nepal

Exemptions That Survive the 2083/84 Revision

Several important exemptions continue to apply to the capital gain tax in Nepal.

The exemption for the long-resided family home is one of the most valuable in the system, and it interacts with the holding-period rates in a way that rewards documentation of residence. Owners planning a sale should assemble occupancy evidence years in advance, not after the sale agreement is signed.

Withholding and the Advance Tax Mechanism

How Tax Is Collected at Source

The capital gain tax in Nepal is largely collected before the taxpayer ever files a return. On listed share sales, the entity conducting the securities market business withholds at the applicable rate under Section 95Ka(2), and from FY 2083/84 that withholding is final for individuals. On land and building disposals by individuals, the land revenue office withholds advance tax at registration under Section 95Ka(5) and 95Ka(6), with separate treatment for holdings above and below five years. On disposals by entities or of business assets, 1.5% of the sales value is withheld as advance tax.

The annual income tax return then credits these withholdings against the final computation. Where the advance exceeds the final liability, a refund claim follows the normal refund procedure.

Filing Process and Compliance

Reporting Capital Gains in the Annual Return

Gains from non-business chargeable assets are reported in the gain and loss statement, Schedule 15 of the annual income tax return, alongside the reconciliation of tax withheld at source. Individuals file by the mid-July deadline for the fiscal year ending mid-July, and entities follow the prescribed schedule with their audited accounts. Failure to report a taxable disposal exposes the taxpayer to assessment, penalties, and interest, and the land revenue office's transaction data makes unreported property sales increasingly visible to the Inland Revenue Department.

Record-Keeping Duties

The taxpayer must preserve purchase agreements, cost documentation, improvement invoices, brokerage statements, and sale agreements for every asset. Since the gain computation depends entirely on the outgoings being proven, the practical tax burden is set by the quality of the file, not merely by the rates.

Planning Under the New 2083/84 Rates

Legitimate Strategies After the Increase

The increase in the capital gain tax in Nepal does not eliminate planning room. Holding listed shares for more than one year still saves 2.5 percentage points, which on meaningful portfolios is substantial. Completing five years of property ownership before selling saves the same spread on land and buildings. Timing disposals across fiscal years can manage the exemption thresholds for individuals. For business assets, pooling and depreciation management continues to shape the effective rate. Every strategy depends on documentation and on professional advice, because the line between planning and evasion is drawn by the records.

Common Mistakes in Capital Gain Tax in Nepal

Frequent Errors Seen in Practice

Frequently Asked Questions About Capital Gain Tax in Nepal

What is the capital gain tax rate on listed shares in Nepal for FY 2083/84?
Resident individuals pay a final 7.5% on shares held more than one year and 10% on shares held one year or less. Resident entities pay 10% and others 25%.

Is capital gains tax on shares final in Nepal now?
Yes. From FY 2083/84, capital gains tax paid on share transactions is final and is not added to personal income.

What is the capital gain tax on land and buildings in Nepal?
7.5% on gains for property owned five years or more, and 10% for property owned less than five years, for individual owners.

How is capital gain calculated in Nepal?
Gain equals the selling price minus the purchase cost, documented improvement costs, and selling costs, under Section 37 of the Income Tax Act.

Is my family home taxable when sold?
A building owned and personally resided in for more than 10 years falls outside the chargeable asset definition and its gain is not taxed.

Is there an exemption for small land sales?
Gain on disposal of land up to NPR 10 lakh is not treated as chargeable.

How is capital gain tax collected?
Through withholding at source: by the securities market for shares and by the land revenue office at registration for property, reconciled in the annual return.

What rate applies to unlisted company shares?
10% for resident individuals, 15% for resident entities, and 25% for others.

Do companies pay capital gain tax differently?
Gains on business assets are taxed at normal business rates, and disposals of land and building by entities attract 1.5% advance tax on sales value.

What happens if I do not report a property sale?
Assessment, penalties, and interest follow, and land revenue data increasingly exposes unreported transactions.

Are losses on asset sales deductible?
Losses on business assets and depreciable pools are deductible under the Act, while losses on non-business chargeable assets have restricted use.

When did the new capital gain rates take effect?
The revised rates apply from the start of fiscal year 2083/84, following the Finance Bill presented on 29 May 2026.

Conclusion and Call to Action

The capital gain tax in Nepal entered a new era in FY 2083/84. Higher rates on shares and property, final taxation of share gains, and tighter reconciliation between withholding and returns mean that every transaction now deserves prior computation rather than after-the-fact surprise. The holding-period thresholds remain the most powerful planning tool available, and documentation remains the most powerful defense. Investors who model the tax before they trade keep materially more of their gains than those who compute it after settlement.

If you are planning a share sale, a property disposal, or a portfolio restructuring, professional tax guidance pays for itself in the first computation. Corporate Np Pvt. Ltd. provides complete capital gains tax support, including transaction modeling, exemption analysis, withholding reconciliation, return filing, record-structuring, and representation in tax disputes. Contact our team today for a confidential consultation, and manage your next disposal under the new rates with full knowledge of every figure before you sign.

References

For verification and further reading, the following sources are recommended:

• Inland Revenue Department Nepal – Official Website
• The Himalayan Times – Capital Gains Tax on Share Trading Declared Final Tax
• The Rising Nepal – Capital Gains Tax on Share Trading and Real Estate Transactions Increased
• Attorney Nepal Pvt. Ltd. – Official Website

Disclaimer: This article is provided for general informational purposes only and does not constitute tax or legal advice. Capital gains tax rates and rules in Nepal are revised annually through the Finance Act, and the 2083/84 provisions described here should be confirmed against the enacted legislation and Inland Revenue Department guidance before any transaction is completed.