KATHMANDU: Just one week after the release of the budget, the government has reversed its decision to include share transactions in the income tax bracket.
By including share investors’ earnings under the income tax bracket in addition to the current capital gains tax, the government announced in its budget on May 29.
According to the amount of time that individual investors have held shares before selling them, they are currently responsible for paying capital gains tax at a rate of either 5 percent or 7 point 5 percent.
According to the new system, investors must once more pay income tax on any remaining capital gains after paying capital gains tax.
If the capital gains exceeded the maximum limit of Rs 5 million, the investors were required to pay additional income tax of up to 39 percent. .
Investors have protested against the government rule since Thursday, calling it “unfair.”. Even the stock brokerages were forced to close their doors on Sunday.
The Inland Revenue Department even released a statement clarifying that the new provision only applies to commercial investors and excludes small investors in order to calm the irate investors.
The government taxman’s efforts, though, failed to calm down investors who have already lost more than Rs 613 billion on the stock market in the first nine months of the current fiscal year. .
Finance Minister Prakash Sharan Mahat invited the investors for a meeting on Sunday as a result of pressure from the investors. As a result, the Ministry of Finance announced in a press release that it would not be implementing the new regulation.
In his conversation with the investors, Minister Mahat stated that the government would remove the clause from the budget while it was brought up for discussion in parliament.