Karachi, November 28, 2023 – The Federal Board of Revenue (FBR) has issued a directive to all investors in the Pakistan Stock Exchange (PSX) to maintain comprehensive records for the verification of liability discharge during the tax year 2024.
The FBR has updated the Income Tax Rules, 2002, and emphasized the importance of adherence to these regulations for investors engaged in the stock market.
According to the revised rules, every investor participating in the securities business is required to maintain accounts and records separately for each brokerage account. These records should be sufficient to enable the verification of the discharge of their obligations as outlined in the Income Tax Rules.
The specific accounts and records that investors are instructed to maintain include fortnightly ledger statements of their brokerage accounts, whether in their own name or any benami accounts. These statements must be generated by their respective brokers to provide a detailed overview of transactions and financial activities.
Additionally, investors are required to keep fortnightly statements from the Central Depository Company (CDC) pertaining to their CDC sub accounts. If an investor holds more than one brokerage account, these records should correspond to each account, whether held in the investor’s name or any benami accounts.
The FBR has outlined specific records that investors must maintain, including a record of security holdings and their values as of June 30th each year. This comprehensive snapshot of assets is crucial for tax verification purposes. Furthermore, investors are mandated to keep records of cash balances in their brokerage accounts as of June 30th, as well as documentation of funds deposited and withdrawn during the relevant periods.
The directive from the FBR aims to enhance transparency and compliance within the stock market, ensuring that investors fulfill their tax obligations accurately. By maintaining detailed records, investors contribute to a more robust and accountable financial system, ultimately supporting the government’s efforts to streamline tax procedures and revenue collection.
This move by the FBR is part of broader efforts to strengthen the tax framework and promote a culture of financial responsibility among investors. The adherence to these rules is not only a legal requirement but also essential for maintaining the integrity and stability of the financial markets in Pakistan.
Market participants are urged to promptly implement these record-keeping measures to avoid any potential complications during tax audits and to demonstrate their commitment to the regulatory standards set by the FBR. As the tax year 2024 approaches, investors in the Pakistan Stock Exchange should proactively ensure that their records are accurate, up-to-date, and readily available for verification processes.
