No capital gains tax for individual stock market investors: NBR

Individual investors will not be taxed on the capital gains of any listed security, the National Board of Revenue (NBR) has clarified.

Individual investors’ capital gains on all listed securities have been exempted from tax through a previous NBR Regulatory Order (SRO), and this remains the same, said Bapan Chandra Das, Second Secretary of NBR for fiscal policy.

Previously, capital gains from the transfer of public enterprise (PE) shares and government securities that include treasury bills, bonds and other government debt securities were not taxable. They became taxable after the publication of the Paripatra 2022-23 income tax on Wednesday.

This year’s budget law made capital gains on public securities taxable, while the Paripatra income tax also included shares of public companies.

Only institutional investors’ capital gains from publicly listed public company shares and government securities will be taxed, similar to what they paid on their capital gains from non-governmental companies, a the NBR official told The Business Standard.

According to the Income Tax Paripatra, capital gains of all government securities and listed companies will be taxed, creating panic among financial market investors fearing a stock sell-off.

However, since the 2015 SRO which exempted individual investors from paying any tax on their capital gains from the sale of listed securities is still in force, and individual capital gains on all listed securities will remain tax exempt, explained Bapan Chandra Das.

Only institutional investors will now pay capital gains taxes on all securities.

In Bangladesh, the capital gains tax is 10%.

Promoter-directors and owners of more than 10% shares are allowed to pay a 5% capital gains tax on the disposal of their shares, according to the SRO 2015.

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