In just one month, 4.5 billion in revenue was generated following a rise in the stock market.

In July alone, the stock market brought in almost 4.55 billion rupees for the government. This is the stock market's largest revenue raising for the month of July thus far. The government has collected the most revenue in history during this era due to the improvement in trading volume and the rise in the NEPSE index of share trading.

Just in July of last year, investors had to pay capital gains tax of almost 4.235 billion rupees. For the purpose of advance tax collection, 31 crore 52 lakhs of tax had been collected in the same period. In July of last year, the stock market yielded a total of Rs 4.55 billion in revenue from capital gains tax and advance tax reduction, as reported by CDS and Clearing.

The sum that investors (individuals and institutions) trading in the stock market must pay to the government for any profits they make is known as capital gains tax, or CGT. If investors don't safeguard their profits, shares in the stock market will stay at book value even if they rise in value. If the investor makes a profit after selling the shares, they will be subject to taxes. The tax on capital gains is that.

Comparably, 15% advance tax deduction (TDS) on the commission received by the stockbroker for the purchase and sale of shares must be paid. It has been calculated by adding these two taxes that, in July of last year, the government only earned 4.5 billion in tax revenue from the stock market.

The current legislation stipulates that investors must pay a profit tax of between 5% and 10% on any profits they make from trading shares. Mutual funds, or collective investment funds, are exempt from taxation. It states that individual investors must pay 5% of the profit on shares sold in a period longer than a year (365 days) and 7.5 percent of the profit on shares sold in a shorter period of time. Institutional investors, however, are subject to a 10% profit tax. Individual investors own the majority of the shares traded overall, with institutional investors making up a very modest percentage of the total.

The government received 408 million rupees in July of the fiscal year 080/82, 426 million rupees in the fiscal year 079/80, and 3 billion 24 million rupees in the fiscal year 078/79 from capital gains tax, according to CDS and Clearing. Data shows that in July of the financial year 080/82, 52.2 million rupees were collected by advance taxation; in the financial year 079/80, 6.29 million rupees were collected; and in the financial year 078/79, 22.97 million rupees were collected.

Due to the low transaction amount and declining stock market during the preceding two years, investors lost money. As a result, this sector's revenue to the government also declined. However, the market has been expanding quickly since the start of this year, and the volume of transactions has also increased dramatically. The amount that the government receives in taxes has also increased, according to the Nepal Stock Exchange (NEPSE).

63 lakh 73,000 investors have created demat accounts as of last Friday in order to purchase and sell shares. This represents almost 22% of Nepal's overall population. 38 lakh 51 thousand 294 investors have created accounts for trading shares in the secondary market as of late July. Of these, 23 lakh 31 thousand 350 are engaged in online share trading. NEPSE reports that 15, lakh 19, thousand 944 individuals continue to purchase and sell shares using brokers (off line). Individual investors make up 3842,540 of the secondary market's total investors, with institutional investors making up the remainder 8754.

While the stock market began to show indications of life in the final week of May of last year, the NEPSE's growth really took off once the Nepali Congress and UML combination was guaranteed a place in government. These two parties inked a collaboration agreement on June 17 of last year. The NEPSE index was approximately 2,533 points on that particular day. NEPSE has risen by more than 900 points since then. The NEPSE index closed at 2,974 points last Thursday, and there has been a noticeable increase in transaction volume.

"The loose monetary policy of this financial year has helped the market, which has reached the path of growth, to increase its speed," according to a broker. "The positive finance minister, loose monetary policy, low interest rates, and more liquidity are the main reasons for the rise in the stock market."

Despite the current upswing in the stock market, the Nepal Securities Board, a regulatory agency, has been operating without a chairman since December 20. The stock market has not been adequately regulated in the absence of the chairman, but there has also been an uptick in activity this time around. As a result, the market share price of businesses with poor financial standing has also climbed quickly.