The tax authority has clarified how holding periods are calculated for securities, short positions and futures contracts under Section 37A of the Income Tax Ordinance, 2001.

ISLAMABAD: The Federal Board of Revenue (FBR) has outlined the holding period rules for 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, for the tax year running from July 1, 2026, to June 30, 2027.

Under Rule 13C, securities held for a maximum period of 182 days shall be treated as having a holding period of six months. Similarly, securities held for a maximum of 365 days shall be considered held for one year.

The rule also explains the calculation of holding periods for short positions.

In the case of short positions, the holding period will be calculated from the date a security is sold short until the date it is purchased to cover that short position.

Meanwhile, for futures contracts, the holding period will be determined by the time between entering into the futures contract and exiting from it.

These provisions form part of the rules governing the computation of capital gains on the disposal of securities under Section 37A.

The clarification provides a framework for determining the holding period of different types of securities and financial contracts when calculating capital gains tax for Tax Year 2027.