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 |
||
|
PSX |
Where the security was acquired before 1st July, 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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