Pkrevenue.com

Tag: Capital Gain Tax

  • FBR collects Rs1.8bn as capital gain tax on sale of securities

    FBR collects Rs1.8bn as capital gain tax on sale of securities

    KARACHI: Federal Board of Revenue (FBR) has collected Rs1.8 billion as capital gain tax on sale of securities during first eight months (July – February) 2020/2021.

    The collection of capital gain tax on sale of securities has increased by 31 percent to Rs1.8 billion during first eight months of the current fiscal year as compared with Rs1.37 billion in the corresponding period of the last fiscal year, sources in Large Taxpayers Office (LTO) Karachi said on Friday.

    The collection was made under Section 147 (5B) of Income Tax Ordinance, 2001.

    Adjustable advance tax on capital gain from sale of securities shall be chargeable as under, namely:—

    Where holding period of a security is less than six months: the rate of advance tax shall be two percent of the capital gains derived during the quarter.

    Where holding period of a security is more than six months but less than 12 months: the tax rate shall be 1.5 percent of the capital gains derived during the quarter.

    Provided that such advance tax shall be payable to the Commissioner within a period of twenty-one days after the close of each quarter: Provided further that the provisions of this sub-section shall not be applicable to individual investors.

  • Special procedure for capital gain tax computation

    Special procedure for capital gain tax computation

    The Federal Board of Revenue (FBR) has recently implemented a comprehensive update to the special procedure governing the computation of capital gain tax and the collection of tax.

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  • Capital Gain Tax: investors require maintaining accounts, records separately

    Capital Gain Tax: investors require maintaining accounts, records separately

    ISLAMABAD: Federal Board of Revenue (FBR) has said that every investor of stock exchange shall maintain accounts and records separately for each of his brokerage accounts regarding payment of capital gain tax (CGT).

    The FBR officials on Thursday said that the record shall be maintained in a way which sufficiently enable for verification of discharge of his obligations under these rules.

    Every investor shall maintain in particular the following accounts and records, namely:-

    (a) fortnightly ledger statements of the investor’s brokerage account or each brokerage account if there are more than one account whether in the investor’s own name or any benami accounts, generated by his broker;

    (b) fortnightly CDC statements of the investor’s CDC sub account or each CDC sub account corresponding to each brokerage account, if there are more than one brokerage account whether held in the investor’s own name or any benami accounts;

    (c) record of security holdings and their value carried in the investor’s brokerage account on 30th June of each year;

    (d) record of cash carried in the investor’s brokerage account as on 30th June of each year;

    (e) record of funds deposited in the investor’s brokerage account; and

    (f) record of funds withdrawn from the investors brokerage account.

  • TAX YEAR 2021: rate of CGT on immovable property

    TAX YEAR 2021: rate of CGT on immovable property

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rates of tax on capital gain on disposal of immovable properties that are applicable during tax year 2021 (July 01, 2020 – June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated June 30, 2020) after incorporating amendments brought through Finance Act, 2020. The FBR updated the following rate of tax on Capital Gains on disposal of Immovable Property.

    The rate of tax to be paid under sub-section (1A) of section 37 shall be as follows:—

    S.No.Amount of GainRate of tax
    (1)(2)(3)
    1.Where the gain does not exceed Rs. 5 million2.5%
    2.Where the gain exceeds Rs. 5 million but does not exceed Rs. 10 million5%
    3.Where the gain exceeds Rs. 10 million but does not exceed Rs. 15 million7.5%
    4.Where the gain exceeds Rs. 15 million10%
  • NCCPL announces collection of capital gain tax on September 30

    NCCPL announces collection of capital gain tax on September 30

    KARACHI: National Clearing Company of Pakistan Limited (NCCPL) on Wednesday announced that it will collect/deduct capital gain tax (CGT) for the period of July – August on September 30, 2020.

    In a letter to Pakistan Stock Exchange (PSX), the NCCPL said that the aggregate amount of CGT arising on disposal of shares at Pakistan Stock Exchange (PSX) for the period July 01, 2020 to August 31, 2020, would be collected on Wednesday September 30, 2020 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 period have already been made available in the CGT System, the NCCPL said.

    Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange for the period July 01, 2020 to August 31, 2020, would also be collected from the Pakistan Mercantile Exchange on Wednesday September 30, 2020.

    The NCCPL advised 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, it warned.

  • FBR explains holding period, tax rates on disposal of immovable properties

    FBR explains holding period, tax rates on disposal of immovable properties

    ISLAMABAD: Federal Board of Revenue (FBR) has explained holding period and tax rates for the computation of capital gains on disposal of immovable properties, which were amended through Finance Act, 2020.

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  • Rate of capital gains tax on disposal of securities

    Rate of capital gains tax on disposal of securities

    KARACHI: Following is the rate of capital gains tax on disposal of securities after the amendment made through Finance Act, 2020.

    Officials at the Federal Board of Revenue (FBR) said that the rate of capital gains tax had been kept unchanged for tax year 2021 and subsequent years.

    cgt on disposal of securities.jpg

    Provided that the rate of tax on cash settled derivatives traded on the stock exchange shall be 5 percent for the tax years 2018 to 2020.

    Provided that the rate for companies shall be as specified in Division II of Part I of First Schedule, in respective of debt securities;

    Provided further that a mutual fund or a collective investment scheme or a REIT scheme shall deduct Capital Gains Tax at the rates as specified below, on redemption of securities as prescribed, namely:—

    CategoryRate
    Individual and association of persons10 percent for stock funds 10 percent for other funds
    Company10 percent for stock funds 25 percent for other funds

    Provided further that in case of a stock fund if dividend receipts of the fund are less than capital gains, the rate of tax deduction shall be 12.5 percent:

    Provided further that no capital gains tax shall be deducted, if the holding period of the security is more than four years.”

    Explanation.- For removal of doubt, it is clarified that, the provisions of this proviso shall be applicable only in case of a mutual fund or collective investment scheme or a REIT scheme.

  • Capital gain tax to be collected on July 30: NCCPL

    Capital gain tax to be collected on July 30: NCCPL

    KARACHI: National Clearing Company of Pakistan Limited (NCCPL) on Wednesday announced to collect capital gain tax for month of June 2020 on July 30, 2020.

    The NCCPL in a statement said that the aggregate amount of CGT arising on disposal of shares at Pakistan Stock Exchange for the period June 01, 2020 to June 30, 2020, would be collected on Thursday July 30, 2020 through respective settling banks of the clearing members, along with refund or adjustments on the basis of amount collected up to previous month.

    All Clearing Members are advised 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, the NCCPL said.

    Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange for the period June 01, 2020 to June 30, 2020, would also be collected from the Pakistan Mercantile Exchange on Thursday July 30, 2020. 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 June 01, 2020 to June 30, 2020. Necessary details and reports have already been made available in the CGT System.

    The NCCPL further said that consequent to amendments introduced in section 37 A pertaining to adjustment of carry forward of losses for three years, net capital gains as on June 30, 2020 has been adjusted with net capital loss as on June 30, 2019 and accordingly any CGT collected thereon if any, shall be refunded/adjusted.

  • FBR issues formula for computing capital gain tax on immovable property sale

    FBR issues formula for computing capital gain tax on immovable property sale

    ISLAMABAD: Federal Board of Revenue (FBR) has issued formula for computation of capital gain tax on disposal of immovable property as amended through Finance Act, 2020.

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  • CGT on immovable properties reduced by 50 percent

    CGT on immovable properties reduced by 50 percent

    ISLAMABAD: The capital gain tax on (CGT) disposal of immovable properties has been reduced by 50 percent in order to promote investment in construction industry.

    According to Deloitte Yousuf Adil, Chartered Accountants, the Finance Bill 2020 proposed reduction in tax rates by 50 percent on capital gains arising on disposal of immovable property.

    This is in line with the Government’s vision to promote construction industry and to provide stimulus for the growth in economy as construction sector provide employment to a number of sub-sectors.

    S. No.Amount of gainRate of tax
      ExistingProposed
    1.Where the gain does not exceed Rs.5 million5%2.5%
    2.Where the gain exceeds Rs.5 million but does not exceed Rs.10 million10%5%
    3.Where the gain exceeds Rs.10 million but does not exceed Rs.15 million15%7.5%
    4.Where the gain exceeds Rs.15 million20%10%

    A person responsible for registering, recording, or attesting transfer of immovable property is required to collect advance tax from seller of such property.

    Such advance tax is not collected where the immovable property is held for a period exceeding 5 years.

    The Bill proposes to reduce this time limit of 5 years to 4 years.