ISLAMABAD: The Federal Board of Revenue (FBR) has notified rate of capital gain tax as introduced through Finance Act, 2022 and effective from July 01, 2022.
The FBR issued Income Tax Circular No. 15 of 2022-2023 to explain important amendment made through the Finance Act, 2022 to the Income Tax Ordinance, 2001.
The FBR said that a separate block of taxation of capital gains on disposal of securities is available under the Ordinance.
Earlier, flat tax rate of 12.5 per cent was applicable on gain on disposal of securities irrespective of holding period.
Now graduated tax rates have been provided with respect to securities acquired after July 01, 2022, by substituting the Table in Division VII of Part I of First Schedule as under:
01. For holding period less than 1 year: the tax rate shall be 15 per cent.
02. For holding period from 1 year to 2 years: the tax rate shall be 12.5 per cent.
03. For holding period from 2 years to 3 years: the tax rate shall be 10 per cent.
04. For holding period from 3 years to 4 years: the tax rate shall be 7.5 per cent.
05. For holding period from 4 years to 5 years: the tax rate shall be 5 per cent.
06. For holding period from 5 years to 6 years: the tax rate shall be 2.5 per cent.
07. For holding period more than 6 years: the tax rate shall be zero per cent.
08. Future commodity contracts entered into by members of Pakistan Mercantile Exchange: the tax rate shall be five per cent.
However, gain on disposal of securities acquired on or before 30th day of June, 2022 will continue to be charged to tax at the earlier flat rate of 12.5 per cent irrespective of the holding period, the FBR added.