Trading on the share market/stock market is becoming more popular day by day in Nepal. Many entered in share market after the first phase of the national-wide lockdown. Many investors are in the online trading platform for trading.
But, how well do you know about the broker commissions, charges, SEBON fees, and capital gain taxes charged on each transaction? If you are unaware of these commissions and fees, you may be losing even when the price you are selling is higher than buying.
For example, you purchased 10 shares at NPR 300 each paying a total of NPR 3037.45 and sold at NPR 307 each. For normal people, there is a profit of NPR 70. Right? But you will receive only NPR 3031.27 which is less than what you have paid.
Therefore, here we have collected data about Broker commission, SEBON fees, and capital gain taxes charged in share/stock transactions in NEPSE trading.
Types of Charges on Stock Trading in Nepal
There are four different charges, fees, and taxes involved in share transactions. These are as follows:
- Broker Commission
- SEBON Fee
- Depository Participant Charge (DP Charge)
- Capital Gain Tax (Only on profit on sale)
Broker Commission
Broker commission is charged by stock brokers registered under prevailing laws. The broker collects a certain percentage of the transaction amount from both the buyer and seller involved in that particular transaction. The rate of commission depends upon the range of transaction amount. Also, the rate of commission and range of transactions differs based on the types of stocks they are transacting.
Broker Commission in Nepal on Trade of Equity Shares
Equity is the major stock traded in NEPSE. The following are the ranges of transactions and respective broker commission rates in Nepal.
| Range of Transaction Amount in NPR | Broker Commission Rate |
|---|---|
| Up to 50,000 | 0.40% or Rs. 10 whichever is higher |
| Above 50,000 to 500,000 | 0.37% |
| Above 500,000 to 2,000,000 | 0.34% |
| Above 2,000,000 to 10,000,000 | 0.30% |
| Above 10,000,000 | 0.27% |
Broker Commission in Nepal on Trade of Government and Corporate Bonds in Nepal
| Range of Transaction Amount in NPR | Broker Commission Rate |
|---|---|
| Up to 500,000 | 0.10% or Rs. 10 whichever is higher |
| Above 500,000 to 5,000,000 | 0.05% |
| Above 5,000,000 | 0.02% |
Broker Commission in Nepal on Trade of Mutual Fund
| Range of Transaction Amount in NPR | Broker Commission Rate |
|---|---|
| Up to 500,000 | 0.15% or Rs. 10 whichever is higher |
| Above 500,000 to 5,000,000 | 0.12% |
| Above 5,000,000 | 0.10% |
Broker Commission in Nepal on Trade of Other Stocks not Mentioned Above
| Range of Transaction Amount in NPR | Broker Commission Rate |
|---|---|
| Up to 50,000 | 0.75% |
| Above 50,000 to 5,000,000 | 0.60% |
| Above 5,000,000 | 0.40% |
So, in total how much does a broker make from each transaction? Out of the commission charged from the buyer and seller, the broker pays 20% of the commission to NEPSE and 0.6% of the commission to SEBON as a regularity fee. After the deduction of these fees, the broker gets 79.6% of the commission charged to traders.
SEBON Fee
In addition to broker commission, both buyer and seller have to pay a SEBON fee on the transaction amount. Currently, the rate of the SEBON fee is 0.015% of the traded amount.
Depository Participant Charge (DP Charge)
DP charge is a flat transaction fee and is irrespective of the number of stock sold. And, the fee charged is per transaction and not the volume sold.
The depository participant charge in Nepal is NPR 25 per transaction. DP charge has to be paid for buying and selling stocks.
Capital Gain Tax (Only if there is a gain on sale)
Any individual or entity earning capital gain on sale is entitled to pay tax.
The capital gain tax rate for an individual is 5% of the net gain amount. However, short-term traders with a holding period of less than one year will be taxed 7.5% on capital gains. Similarly, an entity involved in the trade of shares has to pay a 10% capital gain tax on the gain.
Previously, the tax rate for an individual was only 5% on the gain amount. The budget speech for the fiscal year 2078/79 has increased the tax rate on capital gains by 50% for individual investors with a holding period of fewer than 365 days.
The net gain = Sales price (no of stock x price per unit) – Fees and Commission – Purchase Cost.
These four are the main reasons for the reduction in the amount on sale of stocks.
Apart from this, you need to pay ASBA charges to the bank while applying for IPO. This is different from trading fees and commissions, but it’s better to know how much your bank charges. Read – C-ASBA Charges Charged by Commercial Bank in Nepal.
Investors also Ask
How much do brokers charge to sell shares in Nepal?
The brokerage charges to buy or sell shares in Nepal is as follows.
| Range of Transaction Amount in NPR | Broker Commission Rate |
|---|---|
| Up to 50,000 | 0.40% |
| Above 50,000 to 500,000 | 0.37% |
| Above 500,000 to 2,000,000 | 0.34% |
| Above 2,000,000 to 10,000,000 | 0.30% |
| Above 10,000,000 | 0.27% |
How much is DP Charge in Nepal?
The Depository participant charge also called DP charge is NPR 25 per transaction regardless of the traded amount. Depository participate charge (DP Charge) is flat rate. It means this charge doesn’t change for broker, type of shares or volume of shares. In my opinion it is higher than expected for me.
What are the additional charges for buying shares in Nepal?
The additional charges for buying shares in Nepal are brokerage commission, SEBON fee and DP charge. However, you must need a Demat account, Meroshare Account and a Broker Account to buy shares online in Nepal which generally costs money.
How much is the capital gain tax rate in Nepal for shares?
An individual is liable to pay 5% of net gain on sale of shares. Short-term traders with a holding period of less than one year will be taxed 7.5% on capital gains. While any institution (corporate body) involved in trading of shares have to pay 10% capital gain tax. There will be a revision in the tax from the beginning of fiscal year 2078/79. You can visit Share Calculator by ShareSansar for more detailed share price, commission and tax calculations.
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