Tax & Levies for Nepali Share Investors: CGT, Dividend Tax, Brokerage & Fees

Buying and selling shares on the Nepal Stock Exchange (NEPSE) is never free of charges. Every transaction carries a stack of small levies: broker commission, a Securities Board of Nepal (SEBON) regulatory fee, and a depository participant (DP) charge collected through CDS and Clearing Ltd (CDSC). On top of these transaction costs, the government taxes your investment income twice over — capital gains tax (CGT) when you sell at a profit, and dividend tax when a company distributes earnings. Understanding each line lets you calculate your true break-even price and your net take-home from a sale.

The two buckets are distinct. Transaction charges (commission, SEBON fee, DP charge) are paid on both the buy leg and the sell leg regardless of whether you make money. Taxes are paid only when there is income — CGT only on a realised gain, dividend tax only when a dividend is declared. All the transaction charges are, however, deductible when computing the taxable gain, because they are documented acquisition and disposal costs under Section 36 of the Income Tax Act 2058 (2002 AD).

This page explains each levy that applies to ordinary (equity) share trading by a resident individual, then walks through a full worked example. It complements Amar Nepal's share and IPO calculators, which crunch the arithmetic; here we explain the rules, rates, and legal basis so you know exactly why each number appears. All rates are stated with their Nepali fiscal year (FY) so you can confirm they still apply — tax rates in Nepal change with the annual Finance Act (Arthik Ain).

Capital gains tax is charged on the profit — sale proceeds minus cost of acquisition minus all allowable transaction charges — not on the gross sale amount. For resident individuals trading listed shares, the rate turns on the holding period measured from the date of acquisition to the date of disposal, with 365 days as the dividing line. A gain on shares held for 365 days or less is a short-term gain; a gain on shares held for more than 365 days is a long-term gain and is taxed more lightly to reward longer holding.

For FY 2082/83 BS (which runs mid-July 2025 to mid-July 2026 AD), the individual rates are 5% on long-term gains (held over 365 days) and 7.5% on short-term gains (held 365 days or less). These are the rates in force as this page is written in early July 2026. The Finance Act 2083, enacted with the Budget for FY 2083/84 (presented 29 May 2026, effective from Shrawan 1, 2083 BS / 16 July 2026 AD), raises both: long-term gains to 7.5% and short-term gains to 10%. Confirm which fiscal year covers your sale date, because CGT on listed securities is levied as a final tax at the applicable year's rate.

The cost base for shares is computed using the weighted average cost of acquisition (WACC) — the total rupees you paid across all your purchases (including their commissions and fees) divided by the number of shares held. This matters when you buy the same scrip in several lots at different prices, or receive bonus shares that dilute your average cost. Institutions and resident companies do not use the individual short-term/long-term split; their share gains are generally brought into taxable income, with a 10% rate commonly applied on listed-share gains at source.

Since Nepal moved to fully dematerialised trading, CGT on listed shares is deducted at source automatically. CDSC computes the gain from your demat purchase history and the broker withholds the tax during settlement, remitting it to the Inland Revenue Department (IRD). Because it is a final tax for individuals, you normally do not need to re-declare a listed-share gain in your annual return, though keeping your own records helps you verify the deduction.

When a listed company pays a cash dividend, the shareholder is taxed 5% under the final withholding mechanism of Section 54 of the Income Tax Act 2058, at the rate set in Schedule 1. The company deducts the 5% before it pays you, so the amount that reaches your bank is the net dividend. Because it is a final tax, an individual does not add the dividend to taxable income or pay any further tax on it — the 5% is the end of the story for that income.

The withholding is the company's responsibility, not yours. The paying company must deposit the tax it withholds with the IRD within 25 days of the end of the month in which the dividend was distributed. This is why dividend income needs no separate filing for ordinary retail investors: the tax has already been collected at source and the payment you receive is final and clean.

Bonus shares (stock dividends) work differently and often surprise investors. Issuing bonus shares is treated like distributing profit, so the company must withhold tax (in the same 5% manner) on the value of the bonus shares at the time of issue. The bonus shares you then hold have a zero acquisition cost of their own, which pulls down your weighted average cost per share. That lower WACC means a larger measured capital gain — and therefore more CGT — when you eventually sell, even though the bonus shares felt free when you received them.

One structural exemption is worth noting: a dividend paid by one resident company to another resident company that holds at least 25% of the voting rights is exempt, to avoid taxing the same profit repeatedly as it moves between companies. This inter-corporate relief does not apply to ordinary individual shareholders.

Every buy and every sell order executed through a licensed broker carries a commission set by a SEBON-approved slab. The rate falls as the trade gets bigger, rewarding larger transactions. SEBON reduced these rates by roughly 10% effective from Jestha 1, 2081 BS (mid-May 2024 AD), and the reduced schedule remains in force. Importantly, the slab rate applies to the whole trade value — a Rs 1,00,000 trade is charged the single rate for its band on the full amount, not tiered band by band.

The commission is not kept entirely by the broker. It is split roughly 79.4% to the broker, 20% to NEPSE as an exchange fee, and about 0.6% to SEBON. From the investor's point of view this split does not change what you pay; the total commission is simply deducted on each leg. Because commission is charged on both the purchase and the sale, it effectively widens the gap your share price must move before you break even.

The current equity commission slabs are listed below. Note that the same commission applies on both legs, so a round trip pays it twice.

Beyond commission, two further charges apply to every transaction. The SEBON regulatory fee is 0.015% of the transaction value, levied on both the buy and the sell. On a Rs 1,00,000 trade this is just Rs 15 per leg, but it is unavoidable and scales with the size of your trade. It funds the securities market regulator and is collected by the broker on SEBON's behalf.

The depository participant (DP) charge is a flat Rs 25 per company (scrip) per settlement day, collected by CDSC through your broker. Unlike commission and the SEBON fee, it does not scale with the value of the trade — selling Rs 5,000 or Rs 5,00,000 of one company on the same settlement both cost Rs 25. Because it is charged per company, trading several different scrips in one session incurs Rs 25 for each. This flat fee makes very small trades proportionally expensive.

Two related account costs sit outside individual trades but are worth budgeting for: opening a demat account costs a modest one-time fee (around Rs 50), with a small annual maintenance charge (around Rs 100), and the Mero Share online portal has a nominal registration and yearly renewal charge. These are indicative and set by your DP, so confirm the exact figures with your broker.

Suppose a resident individual bought 100 shares at Rs 500 each and later sells all 100 at Rs 700 each, holding them for more than one year (a long-term gain). We will use the FY 2082/83 long-term CGT rate of 5%. First the buy leg: purchase value is 100 x 500 = Rs 50,000. Commission at 0.36% (the up-to-Rs-50,000 band) is Rs 180; SEBON fee at 0.015% is Rs 7.50; DP charge is Rs 25. Total buy cost = 50,000 + 180 + 7.50 + 25 = Rs 50,212.50.

Now the sell leg: sale value is 100 x 700 = Rs 70,000. Commission at 0.33% (the Rs 50,001–5,00,000 band) is Rs 231; SEBON fee at 0.015% is Rs 10.50; DP charge is Rs 25. Total sell charges = Rs 266.50, so gross proceeds after charges = 70,000 − 266.50 = Rs 69,733.50.

The taxable capital gain is proceeds net of charges minus total cost of acquisition: 69,733.50 − 50,212.50 = Rs 19,521. CGT at the long-term rate of 5% is Rs 976.05, deducted at source. Your net cash from the sale is therefore 69,733.50 − 976.05 = Rs 68,757.45, against Rs 50,212.50 invested — a net profit of about Rs 18,545. Had this been a short-term sale in FY 2082/83, CGT would be 7.5% (about Rs 1,464); under FY 2083/84 rates the same short-term gain would attract 10%, materially reducing the net return.

The lesson: taxes and fees turn a headline Rs 20,000 paper gain into roughly Rs 18,500 in the hand, and the holding period alone can swing the CGT bill by hundreds or thousands of rupees. Always compute your break-even price including both legs of charges before deciding to sell.

Because CGT is deducted automatically at settlement, most retail investors never file anything for their listed-share gains — but you should still keep your own purchase and sale records. If you bought in multiple lots, verify that the WACC used by CDSC matches your own records, since an incorrect cost base directly changes the tax withheld. Discrepancies can arise around bonus shares, rights shares, and shares transferred between accounts.

Time your sales with the 365-day line in mind. Selling a day past the one-year mark converts a short-term gain into a long-term gain and, under both the current and upcoming rate structures, lowers the CGT rate. For dividends, remember the 5% is final — there is nothing further to pay or file, but factor it in when comparing the real yield of dividend-paying scrips.

Finally, treat every rate on this page as tied to its fiscal year. Nepal revises tax rates each year through the Finance Act that accompanies the national budget (usually presented in late Jestha, around late May, and effective from Shrawan 1, the start of the fiscal year in mid-July). For any large or time-sensitive transaction, confirm the current-year rate on the IRD or SEBON website, or with your broker, before you trade.