Karachi: In a recent notice issued by the National Clearing Company of Pakistan Limited (NCCPL), amendments in the Income Tax Ordinance, 2001 via the Finance Act 2024 have been detailed, introducing updated capital gain tax rates effective from July 1, 2024, across various financial markets including the Pakistan Stock Exchange (PSX), Pakistan Mercantile Exchange (PMEX), and Mutual Funds Association of Pakistan (MUFAP).

According to information available from the Pakistan Stock Exchange (PSX), the adjustments in tax rates for the PSX depend significantly on the acquisition date of securities and the duration of their holding. For securities acquired before July 1, 2013, the tax rate remains at 0%. Those purchased between July 1, 2013, and June 30, 2022, attract a tax rate of 12.50% regardless of the investor’s status in the Active Taxpayer List (ATL). For the period following up to June 30, 2024, the rates vary from 15.0% for holdings not exceeding one year, to as low as 0.00% for holdings exceeding six years.

Notably, from July 1, 2024, onwards, the tax rate for individuals and companies will standardize at 15.0%, provided that the rate for individuals and associations of persons does not fall below this percentage. Corporates not listed in ATL will face a higher tax rate of 29%, unless they can qualify as a small company and submit necessary documentation to NCCPL.

In the PMEX, the tax rate for future commodity contracts remains fixed at 5.00% for all investors, regardless of their ATL status.

For the mutual funds under MUFAP, the tax rate for stock funds involving individuals, associations of persons, and companies is set uniformly at 15.0%. However, for other funds, while individual and association of persons will also be taxed at 15.0%, companies will face a higher rate of 25.0%. Securities acquired on or before June 30, 2024, with a holding period exceeding six years, will continue to benefit from a 0% tax rate.

The introduction of these revised rates aims to align with the broader adjustments in fiscal policies as directed by the Finance Act 2024, impacting a wide array of market participants across various investment platforms in Pakistan.