National clearing company to collect CGT under new tax regime
Tax applicable to individual investors, brokers and corporate entities.
KARACHI:
The National Clearing Company of Pakistan Limited (NCCPL) will now compute and collect capital gains tax (CGT) on behalf of the Federal Board of Revenue (FBR) under the newly developed CGT system, which became effective on Thursday.
Addressing a press conference at the Karachi Stock Exchange building, NCCPL CEO Muhammad Lukman said that the new CGT regime will provide investors with ease of calculation and hassle-free preparation for filing income tax returns, as they will now be exempted from the record maintenance requirement.
The new tax regime will be applicable to individual investors, brokers and corporate entities. However, mutual funds, banking companies, non-banking finance companies, insurance companies, Modarabas, and foreign institutional investors will not be covered under the regime.
After setting off capital losses against capital gains in a financial year, CGT will be computed at the rate of 10% for securities with holding period of less than six months. If the holding period is more than six months, and less than one year, the applicable CGT rate will be 8%. There will not be any CGT for gains realised on securities with the holding period of over one year. Also, capital losses in one financial year will not be carried over to the subsequent financial year.
The first report showing details of CGT computation for trades/transactions executed and settled between April 24 and June 30 have been disseminated to market participants, which will enable them to verify the same.
The net amount of CGT for this period will be collected on September 18, whereas details of the computation from July onwards will be provided to market participants by end of September.
Published in The Express Tribune, September 14th, 2012.
The National Clearing Company of Pakistan Limited (NCCPL) will now compute and collect capital gains tax (CGT) on behalf of the Federal Board of Revenue (FBR) under the newly developed CGT system, which became effective on Thursday.
Addressing a press conference at the Karachi Stock Exchange building, NCCPL CEO Muhammad Lukman said that the new CGT regime will provide investors with ease of calculation and hassle-free preparation for filing income tax returns, as they will now be exempted from the record maintenance requirement.
The new tax regime will be applicable to individual investors, brokers and corporate entities. However, mutual funds, banking companies, non-banking finance companies, insurance companies, Modarabas, and foreign institutional investors will not be covered under the regime.
After setting off capital losses against capital gains in a financial year, CGT will be computed at the rate of 10% for securities with holding period of less than six months. If the holding period is more than six months, and less than one year, the applicable CGT rate will be 8%. There will not be any CGT for gains realised on securities with the holding period of over one year. Also, capital losses in one financial year will not be carried over to the subsequent financial year.
The first report showing details of CGT computation for trades/transactions executed and settled between April 24 and June 30 have been disseminated to market participants, which will enable them to verify the same.
The net amount of CGT for this period will be collected on September 18, whereas details of the computation from July onwards will be provided to market participants by end of September.
Published in The Express Tribune, September 14th, 2012.