KARACHI: The Finance Minister Ishaq Dar has announced revised capital gains tax (CGT) slabs on trade of securities within two years while a new CGT slab has been introduced on securities held for more than two years and less than four years.
According to the budget proposal, the tax rate on shares sold within a year has been increased from 12.5 percent to 15 percent, reflecting an increase of 20 percent.
Last year, the government had reduced the CGT rate on short-selling from 17 percent to 12.5 percent but increased the period of short selling from six months to one year.
The rate of CGT on shares sold after one year but within two years has been increased from 10 percent to 12.5 percent, reflecting an increase of 25 percent.
In the last fiscal year, the government had increased the CGT rates for this slab from 9.5 percent to 10 percent.
At present, income from shares sold after holding them for two years is exempted from CGT. Government has introduced a new slab to capture gains that currently remain exempted from the levy.
Government has introduced 7.5 percent CGT on shares sold after two years but within four years of the holding period.
CGT collection from the stock market in the first 10 months of the current fiscal year stood at Rs4.5 billion.
Moreover, rate of tax on dividend has also been increased to 12.5 percent from the current 10 percent.