KARACHI: Through the Finance Act, 2022 the tax rates on disposal of securities have been notified for tax year 2023 and onwards.
According to interpretation of PwC A. F. Ferguson & Co. gain on disposal of listed securities (that was previously chargeable to tax at 12.5 per cent irrespective of the holding period) shall now be subject to revised tax rates based on holding period. The revised rates in terms of section 37A of Income Tax Ordinance, 2001 are as under:
(i) the above-referred revised rates shall apply on disposal of securities acquired on or after July 1, 2022; and
(ii) rate of 12.5 per cent shall apply on disposal of those securities which were acquired on or before June 30, 2022 irrespective of holding period.
Previously, in respect of Mutual Fund or Collective Investment Scheme or a REIT scheme, no capital gains tax was deductible if the holding period of the security was more than 4 years.
Through Finance Act, 2022, such holding period has now been increased to 6 years.
KARACHI: Clearing members of Pakistan Stock Exchange (PSX) have been asked to pay Capital Gain Tax (CGT) on disposal of securities by June 30, 2022.
National Clearing Company of Pakistan Limited (NCCP) in a notification on Thursday stated that the aggregate amount of CGT arising on disposal of shares at Pakistan Stock Exchange for the period May 01, 2022 to May 31, 2022, would be collected on Thursday, June 30, 2022 through respective settling banks of the Clearing Members.
All clearing members have been asked to ensure requisite amount in their respective settling bank’s account. Necessary details and reports for the said period have already been made available in the CGT System.
Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange for the period May 01, 2022 to May 31, 2022, would also be collected from the Pakistan Mercantile Exchange on Thursday, June 30, 2022.
Necessary details and reports for the said period have already been made available.
Moreover, the aggregate amount of CGT arising on redemption of units of open end mutual funds have also been finalized for the period April 01, 2022 to April 30, 2022. Necessary details and reports have already been made available in the CGT System.
Clearing Members and Pakistan Mercantile Exchange have been advised to verify the investor wise details of capital gain or loss and tax thereon, if any, through reports/downloads. Please note that, in case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations.
37A. Capital gain on disposal of securities.—(1) The capital gain arising on or after the first day of July 2010, from disposal of securities, other than a gain that is exempt from tax under this Ordinance, shall be chargeable to tax at the rates specified in Division VII of Part I of the First Schedule:
Provided that this section shall not apply to a banking company and an insurance company.
(1A) The gain arising on the disposal of a security by a person shall be computed in accordance with the following formula, namely: —
A – B
Where —
(i) ‘A’ is the consideration received by the person on disposal of the security; and
(ii) ‘B’ is the cost of acquisition of the security.
(2) The holding period of a security, for the purposes of this section, shall be reckoned from the date of acquisition (whether before, on or after the thirtieth day of June, 2010) to the date of disposal of such security falling after the thirtieth day of June, 2010.
(3) For the purposes of this section “security” means share of a public company, voucher of Pakistan Telecommunication Corporation, Modaraba Certificate, an instrument of redeemable capital,debt Securities, unit of exchange traded fund and derivative products.
(3A) For the purpose of this section, “debt securities” means –
(a) Corporate Debt Securities such as Term Finance Certificates (TFCs), Sukuk Certificates (Sharia Compliant Bonds), Registered Bonds, Commercial Papers, Participation Term Certificates (PTCs) and all kinds of debt instruments issued by any Pakistani or foreign company or corporation registered in Pakistan; and
(b) Government Debt Securities such as Treasury Bills (T-bills), Federal Investment Bonds (FIBs), Pakistan Investment Bonds (PIBs), Foreign Currency Bonds, Government Papers, Municipal Bonds, Infrastructure Bonds and all kinds of debt instruments issued by Federal Government, Provincial Governments, Local Authorities and other statutory bodies.
“Explanation: For removal of doubt it is clarified that derivative products include future commodity contracts entered into by the members of Pakistan Mercantile Exchange whether or not settled by physical delivery.”
(3B) For the purpose of this section, “shares of a public company” shall be considered as security if such company is a public company at the time of disposal of such shares.
(4) Gain under this section shall be treated as a separate block of income.
(5) Notwithstanding anything contained in this Ordinance, where a person sustains a loss on disposal of securities in a tax year, the loss shall be set off only against the gain of the person from any other securities chargeable to tax under this section and no loss shall be carried forward to the subsequent tax year:
Provided that so much of the loss sustained on disposal of securities in tax year 20l9 and onwards that has not been set off against the gain of the person from disposal of securities chargeable to tax under this section shall be carried forward to the following tax year and set off only against the gain of the person from disposal of securities chargeable to tax under this section, but no such loss shall be carried forward to more than three tax years immediately succeeding the tax year for which the loss was first computed.
(6) To carry out purpose of this section, the Board may prescribe rules.
The rate of tax to be paid under section 37A shall be as follows:—
KARACHI: The collection of capital gain tax (CGT) on disposal of securities for the month of December 2021 will be made on February 10, 2022, a statement said on Tuesday.
The National Clearing Company of Pakistan Limited (NCCPL) in a communication sent to Pakistan Stock Exchange (PSX) and the Pakistan Mercantile Exchange Limited (PMEX), said that the aggregate amount of CGT arising on disposal of shares at Pakistan Stock Exchange for the period December 01, 2021 to December 31, 2021, would be collected on Thursday February 10, 2022 through respective settling banks of the clearing members.
All clearing members have been advised to ensure requisite amount in their respective settling bank’s account.
Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange for the period December 01, 2021 to December 31, 2021, would also be collected from the Pakistan Mercantile Exchange on Thursday February 10, 2022.
Clearing Members and Pakistan Mercantile Exchange have been asked to verify the investor wise details of capital gain or loss and tax thereon, if any, through reports/downloads.
“In case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations,” it added.
Official data reveals a significant decline of 26% in the annual collection of Capital Gain Tax (CGT) from the disposal of securities during the fiscal year 2020/2021.
The National Clearing Company of Pakistan Limited (NCCPL) has announced that it will collect Capital Gain Tax (CGT) on the disposal of securities for the month of October 2021 on December 30, 2021.
KARACHI: The capital gain tax (CGT) on disposal of shares for the month of September 2021 will be collected on November 19, 2021, according to a notification issued on Thursday.
The National Clearing Company of Pakistan Limited (NCCPL) communicated the stock brokers that the aggregate amount of CGT arising on disposal of shares at Pakistan Stock Exchange (PSX) for the period September 01, 2021 to September 30, 2021, would be collected on Friday November 19, 2021 through respective settling banks of the Clearing Members.
All Clearing Members are hereby requested to ensure requisite amount in their respective settling bank’s account. Necessary details and reports for the said period have already been made available in the CGT System.
Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange for the period September 01, 2021 to September 30, 2021, would also be collected from the Pakistan Mercantile Exchange on Friday November 19, 2021.
Necessary details and reports for the period have already been made available, the NCCPL said.
Clearing Members and Pakistan Mercantile Exchange are hereby requested to verify the investor wise details of capital gain or loss and tax thereon, if any, through reports/downloads.
In case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations, according to the notification.
In a communication sent to stock brokers and investors, the NCCPL said that the aggregate amount of CGT arising on disposal of shares at Pakistan Stock Exchange for the period August 01, 2021 to August 31, 2021, would be collected on Friday October 29, 2021 through respective settling banks of the Clearing Members.
The NCCPL advised all clearing members to ensure requisite amount in their respective settling bank’s account. Necessary details and reports for the period have already been made available in the CGT System.
Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange (PMEX) for the period August 01, 2021 to August 31, 2021, would also be collected from the Pakistan Mercantile Exchange on Friday October 29, 2021. Necessary details and reports for the said period have already been made available.
Clearing Members and Pakistan Mercantile Exchange are advised to verify the investor wise details of capital gain or loss and tax thereon, if any, through reports/downloads. Please note that, in case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations.
The NCCPL will collect the CGT for the period July 01 – July 31, 2021, on Friday, September 24, 2021, through the respective settling banks of the clearing members.
All clearing members have been asked to ensure the requisite amount in their respective settling bank’s account.
Necessary details and reports for the period have already been made available in the CGT System.
Further, the aggregate amount of CGT arising on the trading of future commodity contracts at the Pakistan Mercantile Exchange for the period July 01, 2021, to July 31, 2021, would also be collected from the Pakistan Mercantile Exchange on Friday, September 24, 2021.
Necessary details and reports for the period have already been made available.
Clearing Members and Pakistan Mercantile Exchange have been advised to verify the investor-wise details of capital gain or loss and tax thereon, if any, through reports/downloads.
In case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations, it said.
