Capital Gains Tax: Shares, Land and Business Sales
Nepal taxes disposal gains as income. Listed share rates rose and became final, property turns on a five-year line, and offshore sales can still be caught.
Nepal does not have a capital gains tax. It has an income tax that treats a gain on disposal as income, and then, for two asset classes ordinary people own, collects it at concessional rates through an intermediary at the moment the transaction settles. Read the rules as though they described a separate tax and almost everything else about them goes wrong.
What changed on 17 July 2026
Two things moved at the start of FY 2083/84 (2026/27), and they pull in opposite directions for an investor.
The rates on listed shares rose. A gain on shares held more than 365 days is charged at 7.5 percent, up from 5 percent. A gain on shares held for 365 days or fewer is charged at 10 percent, up from 7.5 percent. Both took effect on 1 Shrawan 2083 (17 July 2026).
At the same time the charge became a final tax. Announcing the budget on 29 May 2026, Finance Minister Swarnim Wagle said investors would face no further tax after paying capital gains tax on share profits, and that income already taxed under the provision would not count towards the personal income brackets.
For a small investor the two changes roughly cancel. For a high earner whose share gains used to stack on top of salary and be taxed at the top marginal rate, finality is worth a good deal more than 2.5 percentage points. Their effective rate on trading profits has fallen even as the headline rate rose.
Listed shares
| Holding period | Rate for FY 2083/84 | Previous rate |
|---|---|---|
| More than 365 days | 7.5% | 5% |
| 365 days or fewer | 10% | 7.5% |
The collection point makes the listed-share regime workable. Under section 95Ka of the Income Tax Act 2058 (2002), tax is taken in the settlement process rather than assessed on a return filed months later. The seller receives net proceeds. There is no separate payment to make and, with the tax now final, no later reconciliation.
The holding period is measured to the day, and the boundary sits at 365 days rather than one calendar year, which matters for a disposal in a leap-year window. The cost base for shares acquired at different times follows the method the Act prescribes rather than the seller’s preference, so an investor who has built a position over years cannot match a sale against the highest-cost tranche.
Land and buildings
The step here falls at five years. A disposal of land or a building held for five years or more is charged at 7.5 percent, a disposal below that period at 10 percent. Both rates rose in the FY 2083/84 budget. The sources disagree on the short-holding rate for FY 2082/83: a budget report gives 5 percent, a professional rate summary gives 7.5 percent. Compulsory acquisition by government is charged at 2.5 percent.
Advance tax is collected through the land revenue office at registration of the transfer, so the tax is paid before the deed is registered rather than after the money is banked. That sequencing is what makes Nepali property tax collection effective. It also turns an undocumented price allocation between land and structure into a problem at the counter rather than at audit.
Business assets and business sales
Gains on assets used in a business work differently. For an entity, disposing of a depreciable asset or of trading stock produces ordinary business income taxed at the entity rate of 25 or 30 percent, and the concessional disposal rates have no application. Selling a business as an asset sale therefore carries a materially different tax profile from selling the shares in the company that owns it, and the burden lands on different parties. The asset sale taxes the company; the share sale taxes the shareholder.
For unlisted shares the advance-tax rates are higher than for listed shares and vary by the class of disponer. We do not state them. The professional source we have gives a range without allocating each rate to a class of seller, and we could not check it against the Finance Act 2083.
Offshore sales and section 57
A foreign seller faces much the same rates. Whether Nepal can reach the transaction at all is a different question.
Section 57 of the Income Tax Act 2058 treats a change in the ownership of an entity as an event with tax consequences for the entity itself. An extended full bench of the Supreme Court applied it in April 2019 to the sale of an indirect holding in Ncell, a transaction executed in St Kitts and Nevis between two non-Nepali parties. Writing in Nepali Times that month, the advocate Semanta Dahal set out the court’s reasoning: Ncell was the taxable entity, the telecommunications licence was the asset, and the change of ownership from the Swedish holder to the Malaysian acquirer amounted to a disposal. The court directed the Large Taxpayers Office to assess within three months, and the office went on to demand a further NPR 39 billion on top of NPR 21 billion already paid.
Three planning consequences follow for anyone selling a Nepali business through an offshore holding structure. The Nepali authorities pursue the Nepali operating entity rather than the offshore seller, which puts the buyer’s asset at risk in a dispute the buyer did not create. The trigger is a change in ownership measured over a period rather than a single sale, so a staged disposal is not automatically outside the provision. And a tax indemnity in the sale agreement is the only mechanism that puts the cost back where the parties intended, which makes it the clause to negotiate hardest.
The timing lever
Nepal gives a seller very little to work with once a transaction is agreed. There is no indexation of cost for inflation, no rollover into a replacement asset that we could identify, and no loss offset between the concessional disposal regime and ordinary income. What is left is the calendar.
On shares, the difference between day 365 and day 366 of holding is 2.5 percentage points of the gross gain. On a position with a large embedded gain that beats most trading decisions taken in the same week, which is why volume around a holding anniversary is not random. On property the five-year boundary does the same thing over a much longer horizon, and a second constraint runs with it. Land transactions in Nepal are registered at the land revenue office, so the disposal date is a matter of public record and cannot be presented as anything other than what the register shows.
A foreign investor holding through a Nepali company faces a third timing question that neither rate schedule addresses. Section 57 measures a change in ownership over a period rather than at an instant, so the relevant clock may have started well before the current shareholders think it did. Diligence on a Nepali target should establish the entity’s ownership history and not only its current cap table.
What is unsettled
We cannot state the rate applying to a change-in-control gain for FY 2083/84. The 15 percent referred to in reporting of the Ncell judgment reflected the law the court was considering, and the collection provision it was read with has been amended since.
The treatment of a disposal of a private residence, which in most systems attracts some form of relief, is also open here. A relief of that kind has existed in Nepal, conditioned on ownership period and value, and we could not verify its current terms.
For a seller with a live transaction, two dates decide the tax: the acquisition date and the settlement date. Both are usually fixed before anyone looks at the rate.
Sources
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Capital Gains Tax Rate Increased in Nepal from Today
Bajarko Chirfar (English) · 17 July 2026, reporting rates effective 1 Shrawan 2083 · Tier 6 — Professional or news source
Supports: Listed share rates of 7.5 percent above 365 days and 10 percent at or below 365 days from FY 2083/84, replacing 5 and 7.5 percent, and their designation as a final tax.
Accessed 26 August 2026
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Capital gains tax on share trading declared final tax
The Himalayan Times · 29 May 2026 · Tier 6 — Professional or news source
Supports: The budget announcement by Finance Minister Swarnim Wagle that capital gains tax on share transactions becomes a final tax from FY 2083/84 and that taxed gains do not enter the personal income computation.
Accessed 26 August 2026
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Tax changes in the budget for fiscal year 2083/84
Investopaper · 30 May 2026 · Tier 6 — Professional or news source
Supports: Land and building rates of 7.5 percent at five years or more and 10 percent below, and 2.5 percent on government acquisition.
Accessed 26 August 2026
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Nepse Bajar, reporting the Inland Revenue Department · 25 Shrawan 2083 (August 2026) · Tier 6 — Professional or news source
Supports: The Department's published disposal rates for shares and for land and buildings for FY 2083/84.
Accessed 26 August 2026
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Ncell ruling opens a can of worms
Nepali Times (author Semanta Dahal, advocate) · 14 April 2019 · Tier 6 — Professional or news source
Supports: That an extended full bench of the Supreme Court applied section 57(1) of the Income Tax Act 2058 to a share sale executed in St Kitts and Nevis, treating the change in ownership of the Nepali entity as a disposal, and directed the Large Taxpayers Office to assess.
Accessed 26 August 2026
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Inland Revenue Department, Ministry of Finance · Posted 18 Poush 2082 (January 2026); Act in force · Tier 1 — Primary legal instrument
Supports: The statutory basis for disposal gains, section 57 change in control, and advance tax collection under section 95Ka.
Accessed 26 August 2026
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