In a significant development, the National Clearing Company of Pakistan Limited (NCCPL) has been granted the authority to collect super tax on capital gains.
This move comes as part of the proposed amendment to the Income Tax Ordinance, 2001 outlined in the Finance Bill, 2023.
The proposed amendment, if enacted, would empower the NCCPL to calculate and collect super tax under Section 4C of the Income Tax Ordinance. This provision aims to streamline the collection process and enhance the efficiency of tax administration by leveraging the capabilities of NCCPL.
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Under the proposed amendment, NCCPL will not only be responsible for collecting capital gains tax but will also compute and collect tax as per the rates mentioned in Division IIB of Part I of the First Schedule.
The tax rates are:
1. For individuals or entities whose income does not exceed Rs. 150 million, the super tax rate is 0% of the income.
2. For individuals or entities with income exceeding Rs. 150 million but not exceeding Rs. 200 million, the super tax rate is 1% of the income.
3. For individuals or entities with income exceeding Rs. 200 million but not exceeding Rs. 250 million, the super tax rate is 2% of the income.
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4. For individuals or entities with income exceeding Rs. 250 million but not exceeding Rs. 300 million, the super tax rate is 3% of the income.
5. For individuals or entities with income exceeding Rs. 300 million but not exceeding Rs. 350 million, the super tax rate is 4% of the income.
6. For individuals or entities with income exceeding Rs. 350 million but not exceeding Rs. 400 million, the super tax rate is 4% of the income for tax year 2022, and 6% of the income for tax year 2023 onwards.
7. For individuals or entities with income exceeding Rs. 400 million but not exceeding Rs. 500 million, the super tax rate is 8% of the income.
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8. For individuals or entities with income exceeding Rs. 500 million, the super tax rate is 10% of the income.
The calculation of tax will be based on the capital gains determined in accordance with the provisions of this Schedule and the corresponding rules.
This step is expected to ensure a more streamlined and transparent process for the assessment and collection of taxes related to capital gains. By granting NCCPL the authority to handle these matters, the government aims to improve the overall efficiency of the tax collection system.
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