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Capital Gains Tax (CGT) in Pakistan – Complete Guide 2025

If you are a Pakistani investor or business owner, understanding capital gains tax is essential. Capital gains tax is a tax imposed on the profits earned from the disposal of capital assets.

If you are a Pakistani investor or business owner, understanding capital gains tax is essential. Capital gains tax is a tax imposed on the profits earned from the disposal of capital assets. In this article, we will explain the concept of capital gains tax, how it is calculated, and how to pay taxes on capital gains.


What are Capital Assets?

Section 37(5) of the Ordinance defines a capital asset as “property of any kind held by a person, whether or not connected with a business.” However, there are specific exclusions:

  • Business Assets: Stock-in-trade, consumable stores, and raw materials used for business purposes are not considered capital assets.
  • Depreciable Assets: Property for which depreciation is claimed under Section 22 or amortization under Section 24 is excluded.
  • Personal Property: Movable property used by an individual or their family dependents is generally exempt, with some exceptions.

Gold is specifically categorized as a taxable asset. This is due to its inclusion in the list of assets subject to capital gains tax. Section 37(5)(d) specifically exclude assets listed in Section 38(5) from immovable assets held for personal use.


Capital Gains Tax Rates

The government has implemented significant changes to capital gains tax (CGT) in the Finance Act 2024, impacting both immovable property and securities. Here’s a breakdown:

Immovable Property (Land & Buildings)

A simplified system proposes a flat 15% tax rate on capital gains from immovable property acquired on or after July 1, 2024, for individuals listed on the Active Taxpayers List (ATL) at the time of disposal. Holding period will no longer be a factor.

While local Pakistanis generally face this 15% Capital Gains Tax on property profits, overseas Pakistanis can potentially achieve a 0% rate. However, this isn’t automatic. To qualify for this exemption, you must meet three key conditions.

Properties acquired before July 1, 2024, will continue to be taxed under the existing regime, with varying rates based on holding period and property type.

Holding Period (Year) Open Plots Constructed Property Flats
≤ 1 15% 15% 15%
1 – 2 12.50% 10% 7.50%
2  – 3 10% 7.50% 0
3 – 4 7.50% 5%
4 – 5 5% 0
5 – 6 2.50%
6+ 0%

Securities (Stocks & Shares)

Where the securities are acquired before the first day of July, 2013 It will be exempt. However,

  • Where the securities are acquired on or after the first day of July, 2013 but on or before the 30th day of June, 2022 12.5% for Filers and .
  • Where the securities are acquired on or after the first day of July, 2024 and onwards Filers Ind/AOPs/Company 15% & Non Filers Business Slab rates apply, but not less than 15%. Companies not appearing on ATL will be charged. at 29% unless small company.
  • Where the securities are acquired on or after the first day of July, 2022 but on or before the 30th day of June, 2024, below reduced rates of tax on capital gain arising on disposal shall apply:
Status Tax Rates
Holding Period Reduced Tax Rate (%)
Where the holding period does not exceed one year 15
Not exceed two years 12.5
Where the holding period exceeds two years but does not exceed three years 10
Where the holding period exceeds three years but does not exceed four years 7.5
Where the holding period exceeds four years but does not exceed five years 5
Where the holding period exceeds five years but does not exceed six years 2.5
Where the holding period exceeds six years 0

Pre-2013 Acquisitions Exempt: Securities acquired before July 1, 2013, remain exempt from capital gains tax.


Capital Gains Tax Calculations

Capital gains are calculated by subtracting the cost of the asset from its selling price. The cost of the asset includes the purchase price and any expenses related to the acquisition of the asset, such as legal fees, registration fees, and transfer fees.

However, if an asset was received as a gift, bequest, will, succession, inheritance, or distribution of assets on the dissolution of an association of persons (AOP) or liquidation of a company, its cost will be equivalent to the fair market value at the time of disposal.


Tax Relief on Capital Gains for Government and Armed Forces Allottees

Under the Income Tax Ordinance, special tax relief is available on the sale of immovable property allotted to ex-servicemen, serving personnel of the Armed Forces, and current or former employees of the Federal and Provincial Governments, provided they are the original allottees duly certified by the allotment authority.

On the first sale of such property, the tax payable on capital gains is reduced by 50 percent. Moreover, if the property is sold after the completion of three years from the date of acquisition, the amount of tax payable is further reduced by 75 percent, significantly lowering the tax burden on these categories of taxpayers.


How to Pay Capital Gain Tax?

If you have earned a capital gain, you are required to file a tax return with the Federal Board of Revenue (FBR) and pay taxes on the gain. You can do this either online or by visiting the nearest tax office.

To file a tax return, you need to provide details of the asset, such as its purchase price, selling price, holding period, and any expenses related to the acquisition of the asset. You also need to calculate the capital gain tax payable and pay it online or by submitting a payment at the bank.

What You Need to Do:

  • Stay Informed: Investors are advised to closely monitor the finalization of these proposals and seek professional advice to understand the potential impact on their investment strategies.
  • Review Acquisitions: Identify the acquisition dates of your immovable property and securities to determine which tax regime applies.
  • ATL Status: If you’re not already on the ATL, consider registering for potential tax benefits on future capital gains from securities.

Conclusion

Capital gains tax is an essential aspect of investing and doing business in Pakistan. By understanding the concept of capital gains tax and how to calculate and pay it, you can avoid penalties and ensure compliance with tax laws. Remember to file your tax return and pay your taxes on time to avoid any legal issues.

Muhammad Ebrahim
Muhammad Ebrahim

Intern at TaxationPk, actively contributing to various taxation-related projects. Continuously learning and gaining hands-on experience, bringing enthusiasm and a fresh perspective to the team.

Articles: 46

44 Comments

  1. Regarding selling a flat, what date will determine the holding period?
    1 – lease date
    2 – possession date

    Lease was provided last year, flat has been in possessions for 2+ years.

    Appreciate your giidance

  2. A house of 4 marla transferred through inherent mutation on 30 sep 2024 among 5 sisters and one brother. Now they are selling it on Oct 2025. Among owners 3 are filers and 3 non filers. How the Capital Gain Tax and Advanced Tax applied among all sellers?

  3. I have been allotted a plot by my department. Please tell me how I shall mention this in my wealth statement while filing the IT return. As I have not paid any cost so should I show it’s cost as “0” or what? and if I have to mention it’s cost as per FMV etc, then how I will adjust it in “reconciliation of net assets” because actually I have not paid for it.
    How capital gain tax will be calculated if I sell this plot in future.

    • To ensure accurate reporting and calculation, it is highly recommended to confirm the specific tax treatment of the plot’s allotment by your department at the time of acquisition, especially whether it was considered a taxable perquisite or exempt income. This will directly influence the “cost” for capital gains purposes and declaration.

  4. A Residential house of 120sq yard is in the name of my mother. She was passed on 2021. Now me and my brothers sold this house in July 2025 and get our shares
    Do we have to pay CGT on inherited house and how we should calculate this as we had already pay 11% tax on sale amount

  5. If selling of gold price is 3 lac and yearly salary is also 3 lac than total will be 6 lac is it taxable can we adjust like this selling of gold

  6. i have got inherited gold jewellery in 2020. I entered its value as 0 in FBR return.if i sale it, does capital gain tax apply? and how much

  7. A residential house of 120 sq yard was in the name of my father since more than 35 to 40 years. My father passed away in 2022. Now me and my brothers want to sell the house to get their share. I want to ask that how much will be the gain tax on this property.

  8. I had bought a plot in November 2019 and want to sell it now in July 2025. What will be the CVT and Advance tax for the buyer and what will be the capital gains tax for me as a seller if the plot is sold on 5th July 2025 after the new budget changes? Is there an increase in any of these taxes? What will be the capital gains tax for overseas pakistanis?

    • Rates of the capital gains are mentioned above, they will be 2.5% (5-6 years holding). Capital Value tax is different in Pakistan, usually 2%. An increase in Advance tax for active sellers is expected to be 1.5% while expected to be decreased by 1.5% for active buyers. FED in property tax is expected to be removed. Stamps duties in Islamabad expected to be reduced. Oveserseas Pakistanis are exempt from cgt.

  9. I have a grey structure 3.5 Marla single story home on my brother name and he is Non Filer, which was purchased and build in 2016, near Bakhsho pull Peshawar KPK.
    Now we want to sale it out , which price is 35lac.
    How much Gain Taxes will be paid by us now?

  10. Is capital gain on sale of Gold Ornaments is taxable in tax year 2022? Furthermore, Gold ornaments has been acquired through marriage gift from father since more than 20 years. if it is taxable than what is the cost of that gold in tax year 2022? Thanking you in anticipation for your kind response.

  11. A residential house of 120 sq yard was in the name of my father since more than 30 to 40 years. My father passed away in 2014. Now me and my brothers want to sell the house to get their share. I want to ask that how much will be the gain tax on this property.

  12. Who will pay gain tax purchaser or sailer
    If the purchaser or seller is filer but status showing late filler how much % is to be paid in the account of Gain tax.

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