The Federal Board of Revenue has clarified acceptable methods of acquiring and disposing of securities and the documentary evidence required to calculate capital gains tax under Section 37A.

ISLAMABAD: The Federal Board of Revenue (FBR) has explained the rules governing the acquisition and disposal of securities for Tax Year 2027 under Section 37A of the Income Tax Ordinance, 2001.

The FBR issued the Income Tax Rules, 2002, updated up to September 15, 2026, covering the tax year running from July 1, 2026, to June 30, 2027.

Under Rule 13A, securities can be acquired through purchase, exchange, bonus issues, rights issues, gifts, bequests, inheritance, leverage schemes and derivative contracts.

The rules allow securities to be acquired in electronic book-entry form or through physical certificates. Transactions can take place through a stock exchange trading platform or off-market arrangements.

For securities other than open-ended mutual fund units, acceptable supporting documents include brokers’ purchase bills, computerised brokerage account ledger statements, Central Depository Company (CDC) sub-account statements and proof of payment through cheques.

For open-ended mutual fund units, a certified investor account statement issued by the asset management company serves as supporting evidence of acquisition.

Meanwhile, Rule 13B explains the disposal of securities through sale, gift, exchange or any other form of transfer by the security holder.

Disposal may also take place through electronic book-entry systems or physical certificates, either on a stock exchange trading platform or through off-market transactions.

For securities other than open-ended mutual fund units, supporting evidence includes brokers’ sale proceeds or difference bills, computerised brokerage ledger statements, CDC sub-account statements and proof of payment through cheques.

In the case of open-ended mutual funds, a certified investor account statement issued by the asset management company is acceptable evidence of disposal.

These provisions establish the documentary requirements for determining capital gains on securities under Section 37A for Tax Year 2027.