CAPITAL GAIN ON DISPOSAL OF SECURITIES
The procedure for taxation of capital gain arising on sale of securities different as compared to other capital gains.
Security for this purpose means share of a public company, voucher of Pakistan Telecommunication Corporation, Modarba Certificate, an instrument of redeemable capital and derivative products. Capital gains on sale of all these was exempt upto 30th June 2010. If a security is sold on or after 1″ July 2010, no matter when it was purchased the capital gain arising on the sale will be taxed. However, the taxation procedure and rates are different as compared to other capital gains which are taxable under section 37 and 38 above and is as follows:
Holding Period of Security
The holding period of security means the period between the date of acquisition to the date of disposal of such security
(6) If the bolding period of a security is one year or more any gain on its sale is exempt from tax capital
(ii) If the holding period of a security is more than six months but less than twelve months capital gain arising will be treated as a separate block of income and taxed as per the following schedule:
A mutual fund or a collective investment scheme is required Dfa Ho to deduct the capital gain tax on the ove rates on redemption of securities.
Where a person sustains a loss on the disposal of securities in a tax year such loss shall be reduced from the taxable gain the person has received from sale of securities in the same year. Such loss, however, cannot be carried forward to the next year.
