Karachi, October 2, 2023 – The Federal Board of Revenue (FBR) has granted taxpayers the ability to offset losses against capital gains, providing relief and flexibility in income tax matters. Official sources confirmed this change on Monday, shedding light on the new provisions.
(more…)Tag: capital gain
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Pakistan stock brokers seek tax incentives
ISLAMABAD: Pakistan Stockbrokers Association on Wednesday proposed tax incentives on capital gain and investment in stock market.
Federal Minister for Finance and Revenue Shaukat Tarin held a meeting with a delegation of Pakistan Stockbrokers Association led by its Vice Chairman Zahid Latif Khan at Finance Division.
The delegation apprised the Finance Minister of certain issues and challenges impeding the growth of Capital market in Pakistan and sought support of government to resolve their issues.
They requested for providing tax incentives on Capital gain and investment in stock exchange.
Finance Minister Shaukat Tarin said that government is encouraging investment and enlisting of entities in the stock exchange.
He further assured the delegation his support to resolve their issues and for growth of Capital market in Pakistan.
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Finance Act 2019: Capital gain tax on immovable properties exempted on holding period above 8 years
KARACHI: The government has exempted the capital gain tax on immovable property where holding period is above eight years. The amendment has been brought through Finance Act, 2019 as it was proposed 10 years through Finance Bill 2019.
According to commentary on Finance Act, 2019 by PwC A F Ferguson Chartered Accountants, prior to finance bill 2019, capital gains on disposal of immovable properties were taxable as a separate block of income at the rates specified in the First Schedule, determined on the basis of holding period of immovable property.
The bill proposed to completely revamp the taxation of capital gains on disposal of immovable properties. It was proposed to tax gain on disposal of open plots as well as constructed properties at normal rates, subject to reduction in the amount of gain on the basis of holding period exceeding the specified thresholds.
Through amended finance bill, the taxability of gain arising on disposal of immovable properties as separate block of income has been restored.
However, the slab rates specified for such taxation are now based on the amount of gain, which are specified as under:
1. Where the gain does not exceed Rs 5 million: 5 percent
2. Where the gain exceeds Rs 5 million but does not exceed Rs 10 million: 10 percent
3. Where the gain exceeds Rs 10 million but does not exceed Rs 15 million: 15 percent
4. Where the gain exceeds Rs 15 million: 20 percent
Further, the holding period of property for ascertaining capital gain has been reduced vis-à-vis that proposed in the finance bill as under:
(a) For open plot of land, the gain chargeable to tax will be reduced by 25 percent if the holding period exceeds one year but does not exceed 8 years (as against 10 years proposed in the FB). Further, where the holding period exceeds 8 years (as against 10 years proposed in the FB), gain will be taken as zero.
(b) For constructed properties, the gain chargeable to tax will be reduced by 25 percent if the holding period exceeds one year but does not exceed 4 years (as against 5 years proposed in the FB). Further, where the holding period exceeds 4 years (as against 5 years proposed in the FB), gain will be taken as zero.