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 you pay on capital gains from securities depends on the holding period, or the duration you held the security before selling it. Here’s a breakdown for 2024:
| Holding Period | Rate of Tax |
|---|---|
| Up to 1 year | 15% |
| Over 1 year but less than 2 years | 12.5% |
| Over 2 years but less than 3 years | 10% |
| Over 3 years but less than 4 years | 7.5% |
| Over 4 years but less than 5 years | 5% |
| Over 5 years but less than 6 years | 2.5% |
| Over 6 years | 0% |
Key Points to Note:
- These rates apply to securities acquired on or after July 1, 2022.
- Securities acquired between July 1, 2013, and June 30, 2022, are taxed at 12.5%.
- Securities acquired before July 1, 2013, are exempt from capital gains tax.
- Mutual funds and similar investment schemes have separate tax rates for stock funds and other funds.
Tax Rates on Capital Gains from Immovable Property (Land, Buildings)
The tax rate on capital gains from immovable property also varies based on the holding period and the type of property:
| Holding Period | Open Plots | Constructed Property | Flats |
|---|---|---|---|
| Up to 1 year | 15% | 15% | 15% |
| Over 1 year but less than 2 years | 12.5% | 10% | 7.5% |
| Over 2 years but less than 3 years | 10% | 7.5% | 0% |
| Over 3 years but less than 4 years | 7.5% | 5% | – |
| Over 4 years but less than 5 years | 5% | 0% | – |
| Over 5 years but less than 6 years | 2.5% | – | – |
| Over 6 years | 0% | – | – |
Remember: This information is for general guidance only. Consult us for personalized advice.
The above rates are relevant to FY 23-24 and also applicable to the assets acquired before 01 July, 2024. For others, it is a flat rate of 15%.
Tax Rates for 2025 are mentioned in separate articles
Securities acquired between July 1, 2013, and June 30, 2022, are taxed at 12.5%..
If somebody has held the properties more than six years on the above-mentioned clause. If he has withheld the property more than 6 years would a flat rate of 12.5% apply on that.
Regards
“If he has withheld the property more than 6 years ….”
That will be exempt.
Please read the full article for Property Rates..