Karachi, September 5, 2023 – The National Clearing Company of Pakistan Limited (NCCPL) has announced that the collection of capital gain tax (CGT) on the disposal of shares will take place on September 12, 2023.
(more…)Tag: Capital Gain Tax
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Tax Makeover: Capital Gains on Securities and Shares Get Fresh Look
Karachi, July 26, 2023 – The Federal Board of Revenue (FBR) has announced significant tax amendments pertaining to capital gains on securities and shares through an official notification, Circular No. 2 of Income Tax.
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NCCPL Set to Collect Capital Gain Tax on June 21
Karachi, June 14, 2023 – The National Clearing Company of Pakistan Limited (NCCPL) has announced its plan to collect capital gain tax (CGT) for the month of May 2023 on June 21.
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NCCPL Authorized to Collect Super Tax on Capital Gains
In a significant development, the National Clearing Company of Pakistan Limited (NCCPL) has been granted the authority to collect super tax on capital gains.
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NCCPL announces schedule for CGT collection on disposal of shares
The National Clearing Company of Pakistan Limited (NCCPL) on Tuesday May 23, 2023 released the schedule for the collection of Capital Gain Tax (CGT) on the disposal of shares at the Pakistan Stock Exchange (PSX) and Pakistan Mercantile Exchange (PMEX).
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FBR plans increasing CGT rates, period on immovable properties
Federal Board of Revenue (FBR) is planning to increase capital gains tax (CGT) rates and period on immovable properties in order to discourage short-term buying and selling.
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NCCPL to collect capital gain tax on March 31
National Clearing Company of Pakistan Limited (NCCPL) on Friday announced to collect Capital Gain Tax (CGT) on March 31, 2023 on disposal of shares during the month of February 2023.
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CGT on disposal of securities to be collected on Dec 07
The National Clearing Company of Pakistan Limited (NCCPL) announced on Tuesday that it will collect the aggregate amount of Capital Gains Tax (CGT) on disposal of securities for the month of October 2022 on December 07, 2022.
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FBR notifies graduated tax rates on disposal of securities
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.
READ MORE: FBR applies separates CGT rates on immovable properties
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.
READ MORE: FBR explains tax on deemed income from immovable property
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.
READ MORE: Super tax to apply for Tax Year 2022 and onwards: FBR
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.
READ MORE: Pakistan enhances income tax rates for banks
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.
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FBR applies separates CGT rates on immovable properties
ISLAMABAD: The Federal Board of Revenue (FBR) has implemented capital gain tax on disposal of immovable properties as amended through Finance Act, 2022.
The FBR issued Income Tax Circular No. 15 of 2022-2023 to explain the important amendments introduced through the Finance Act, 2022 to the Income Tax Ordinance, 2001.
READ MORE: FBR explains tax on deemed income from immovable property
The FBR said that earlier, the gain arising on the disposal of immovable property after the holding period of 4 years was exempt from tax.
Now the holding period concession will separately apply which for open plots is six years, for constructed property is four years and for flats is two years.
Further, whole amount of gain on disposal of immovable property will be taxable at graduated rates provided in Division VIII of Part I of First Schedule of the Ordinance given as under:
READ MORE: Super tax to apply for Tax Year 2022 and onwards: FBR
01. Where the holding period does not exceed one year: the tax rate for open plots shall be 15 per cent; for constructed property at 15 per cent; and for flats 15 per cent.
02. Where the holding period exceeds one year but does not exceed two years: the tax rate for open plots shall be 12.50 per cent; for constructed property at 10 per cent; and for flats at 7.5 per cent.
03. Where the holding period exceeds two years but does not exceed three years: the tax rate for open plots shall be 10 per cent; for constructed property at 7.5 per cent; and zero per cent for flats.
READ MORE: Pakistan enhances income tax rates for banks
04. Where the holding period exceeds three years but does not exceed four years: the tax rate for open plots shall be 7.5 per cent; for constructed property at 5 per cent; and zero per cent for flats.
05. Where the holding period exceeds four years but does not exceed five years: the tax rate for open plots shall be 5 per cent; zero per cent for constructed property; and zero per cent for flats.
06. Where the holding period exceeds five years but does not exceed six years: the tax rate for open plot shall be 2.5 per cent; zero per cent for constructed property; and zero per cent for flats.
07. Where the holding period exceeds six years: the tax rate shall be zero for open plots, constructed property and flats.
READ MORE: Declaring beneficial owner made mandatory for companies, AOPs
The concessional taxation regime for capital gains has been made applicable only to disposal of immovable properties situated in Pakistan.
The benefit of holding period and concessional rate of tax is not available in respect of capital gains arising on disposal of immoveable property situated outside Pakistan.
Furthermore, to streamline capital gains taxation regime, the concessions earlier available under sub-sections (3) and (3A) of section 37 in terms of reduction in capital gain by certain percentages on disposal of capital assets held for more than one year has been withdrawn.
READ MORE: Pakistan reintroduces capital value tax on motor vehicles
Sub-section (4A) of section 37 has been omitted.
Accordingly, non-recognition provision of section 79 will apply to determine the cost of acquisition on transfer of capital asset under the circumstances contained therein.