The optimization process and recommendations:

1. Avoid Calling Functions With Indexed Columns (query line: 41): When a function is used directly on an indexed column, the database's optimizer won’t be able to use the index. For example, if the column `date_month` is indexed, the index won’t be used as it’s wrapped with the function `YEAR`. If you can’t find an alternative condition that won’t use a function call, a possible solution is to store the required value in a new indexed column.
2. Avoid Subqueries (query line: 27): We advise against using subqueries as they are not optimized well by the optimizer. Therefore, it's recommended to join a newly created temporary table that holds the data, which also includes the relevant search index.
3. Avoid Subqueries (query line: 36): We advise against using subqueries as they are not optimized well by the optimizer. Therefore, it's recommended to join a newly created temporary table that holds the data, which also includes the relevant search index.
4. Avoid Subqueries (query line: 45): We advise against using subqueries as they are not optimized well by the optimizer. Therefore, it's recommended to join a newly created temporary table that holds the data, which also includes the relevant search index.

The optimized query:

SELECT
        txh.clid AS clid,
        txh.id AS hlid,
        holdinNo,
        holding,
        ClientID AS cliendID,
        ClientName,
        itm.itemID,
        itm.Item,
        itm.rate,
        (SELECT
            TOP 1 asset 
        FROM
            tx_asset 
        WHERE
            tx_asset.hlid = txh.id 
        ORDER BY
            txh.id DESC) AS asset 
    FROM
        tx_holding AS txh 
    INNER JOIN
        tx_set_bill_holding AS itm 
            ON txh.id = itm.hlid 
            AND itm.status = 1 
    WHERE
        txh.id IN (
            SELECT
                hlid 
            FROM
                tx_asset 
            WHERE
                asset IS NOT NULL 
                AND asset != 0
        ) 
        AND txh.id NOT IN (
            SELECT
                hlid 
            FROM
                tx_bill_pay 
            WHERE
                YEAR(tx_bill_pay.date_month) = YEAR(@tdate) 
                AND hlid IS NOT NULL
        ) 
        AND txh.clid IN (
            SELECT
                tbl_client.id 
            FROM
                tbl_client 
            WHERE
                tbl_client.client_type = 'Non-Govt.'
        ) 
        AND itm.type = 'Non-Govt.' 
        AND txh.roadno = @roadno