Karachi, December 8, 2024 – The Federal Board of Revenue (FBR) has issued directives to Pakistan Stock Exchange (PSX) investors, requiring them to maintain detailed records of their securities transactions and accounts. This initiative by the FBR is in line with the Income Tax Rules, 2001, and aims to enhance transparency and compliance within the stock market.
As per Rule 13I of the Income Tax Rules, the FBR mandates that investors keep records that allow for the verification of their tax obligations. The following guidelines, outlined by the FBR, must be adhered to by all investors:
1. Separate Accounts for Brokerage Activities: Investors are required to maintain distinct records for each brokerage account to ensure clarity and facilitate verification by the FBR.
2. Detailed Documentation:
o Fortnightly Ledger Statements: Investors must keep fortnightly ledger statements for every brokerage account, including those held in their own names or benami accounts.
o Fortnightly CDC Statements: The FBR requires fortnightly statements of Central Depository Company (CDC) sub-accounts associated with each brokerage account.
o Annual Records of Securities: Investors must document the value and details of securities held in their accounts as of June 30 each year, as specified by the FBR.
o Cash Balances: A record of cash balances in brokerage accounts on June 30 is mandatory.
o Funds Deposited: The FBR emphasizes the need for a thorough record of funds deposited into brokerage accounts.
o Funds Withdrawn: Investors are also required to maintain a record of all withdrawals from their brokerage accounts.
This directive by the FBR underscores its commitment to curbing tax evasion and ensuring accountability in stock market activities. By implementing these measures, the FBR seeks to foster transparency and strengthen the regulatory framework governing Pakistan’s securities market.
The FBR has advised investors to comply with these requirements to avoid penalties or complications during audits. Proper documentation will not only ensure adherence to tax laws but also support the FBR’s broader efforts to enhance fiscal discipline and improve revenue collection.