CDS and Clearing revises EDIS app to facilitate stocks transactions in the new capital gains tax rule

Published On: July 20, 2021 06:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 20: The CDS and Clearing Limited (CDSC), a subsidiary of Nepal Stock Exchange, has revised its stocks trading app EDIS (electronic deposit instruction slip) to facilitate investors to trade in the line of the new capital gains tax rule enforced by the government.

The capital gains tax is a type of tax applied to the profits earned on the sale of an asset. In the context of the capital market, this translates to the tax on gains made by the sale of shares of a company, units of a mutual fund, or other securities.

The government through the budget announcement for this fiscal year has revised the capital gain tax on shares transactions based on the short-term and long-term trading. As per the new provision, individual investors selling the shares before one year of purchase need to pay capital gains tax of 7.5 percent while the ones holding the shares for over a year need to pay capital gains tax of 5 percent.

According to the CDSC, the EDIS helps sort out the breakdown in the number of shares as per the duration of holding the shares. To use the new system, investors need to download and update the Meroshare app. The investors can access a new option called ‘my holding’ in the field named ‘my purchase source’ to settle transactions through the EDIS system, said CDSC.   

The Nepse records show that the government collected tax revenue worth Rs 13.33 billion from the secondary market in the first 11 months of the last fiscal year, a record high amount from Nepse in around three decades of its inception. The capital gain tax held the major contribution in the government revenue collected from the sector. 


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