Tax liability in certain security transactions

Tax liability in certain security transactions

Section 112 of Income Tax Ordinance, 2001 explained tax liability on disposal of certain securities where the same are reacquired.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following is the text of Section 112 of Income Tax Ordinance, 2001:

112. Liability in respect of certain security transactions.— (1) Where the owner of any security disposes of the security and thereafter re-acquires the security and the result of the transaction is that any income payable in respect of the security is receivable by any person other than the owner, the income shall be treated, for all purposes of the Ordinance, as the income of the owner and not of the other person.

(2) In this section, “security” includes bonds, certificates, debentures, stocks and shares.

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