Taxation on profits from FTMO and Prop Firms trading Forex

Question

I am a Pakistani citizen trading on Prop firms such as FTMO. The assets usually traded is Forex but it is technically a demo account. But you can earn profits if you can trade consistently. My question is if the funds are brought in through proper banking channels, what is the tax rate that would apply. Could this be considered freelancing as there is no contract. Your advice is highly appreciated.

Answer 1

Prop trading profits from international firms like FTMO, when brought into Pakistan through banking channels, are generally treated as taxable income under the Income Tax Ordinance, 2001. As a resident Pakistani, these profits are likely classified as "Income from Other Sources" or "Business Income," potentially taxed at progressive rates up to 35% or subject to special rates for IT/Export services, depending on how the income is declared.