Understanding capital gains tax is crucial for any investor in Pakistan. This article explores the tax rates applicable in 2024 for capital gains on disposal of securities and immovable property.
What is Capital Gain?
A capital gain arises when you sell an asset for more than you purchased it for. In simpler terms, it’s the profit you make on an investment.
Tax Rates on Capital Gains from Securities (Stocks, Bonds, etc.)
The tax rate on capital gains from securities depends on the holding period, the date of acquisition, and the type of security. Here’s a breakdown for 2024:
| Holding Period (Years) | Tax Rate for Securities Acquired on or after July 1, 2022 | Tax Rate for Securities Acquired Between July 1, 2013 and June 30, 2022 | Tax Rate for Securities Acquired Before July 1, 2013 |
|---|---|---|---|
| Less than 1 Year | 15% | – | – |
| 1 to 2 Years | 12.5% | 12.5% | – |
| 2 to 3 Years | 10% | – | – |
| 3 to 4 Years | 7.5% | – | – |
| 4 to 5 Years | 5% | – | – |
| 5 to 6 Years | 2.5% | – | – |
| More than 6 Years | 0% | – | 0% |
| Future Commodity Contracts | 5% | – | – |
Special Cases:
- Mutual funds and collective investment schemes deduct capital gains tax at redemption:
- 10% for stock funds (individual investors)
- 12.5% for stock funds (if dividend receipts are less than capital gains)
- 10% for other funds (individual investors)
- 25% for other funds (companies)
- No capital gains tax is deducted if the holding period of the security exceeds six years.
