Amendments in CGT System have been incorporated as per Finance Act 2020

By MG News | July 16, 2020 at 04:58 PM GMT+05:00

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July 16, 2020 (MLN): National Clearing Company of Pakistan Limited (NCCPL) via notification to Exchange has notified all market participants that the Finance Act 2020 has introduced a new subsection 3B in Section 37A of the Income Tax Ordinance, 2001, as per which "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.

The effect of the above proviso has been incorporated in the Capital Gain Tax (CGT) System with effect from July 1, 2020 whereby CGT System will compute, determine, collect and deposit Capital Gain and Tax thereon on disposal of all listed securities irrespective of its date of acquisition whether acquired before or after of its listing date, the notification revealed.

The notice further highlights that Finance Act, 2020 has maintained applicable CGT Rates for the Financial Year 2020-21, details of which are mentioned in the table below.

Market	Period	FY 2020-21 CGT Rates
	Investors appearing in (ATL)	Investors not appearing in (ATL)
PSX	Where the security was acquired before 1^stJuly, 2013	0.00%	0.00%
Securities Acquired before July 1, 2016. Where holding period of a security is twenty-four months or more but the security was acquired on or after 1st July, 2013	7.50%	15.00%
Securities Acquired on or after July 1, 2016	15.00%	30.00%
Cash settled derivatives traded on Stock Exchange	5.00%	10.00%
MUFAP	Where the holding period of securities more than Four years	0.00%	0.00%
Stock Funds: For individuals and corporate if Dividend receipts of the fund are more than capital gains	10.00%	20.00%
	Stock Funds: For individuals and corporate if Dividend receipts of the fund are less than capital gains	12.50%	25.00%
Other than Stock Funds: For Individuals	10.00%	20.00%
Other than Stock Funds: For Corporate	25.00%	50.00%
PMEX	Future Commodity Contracts executed at Pakistan Mercantile Exchange	5.00%	10.00%

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