FBR to issue SRO on changes in CGT mechanism – Alfalah Securities Limited
Karachi: Federal Board of Revenue (FBR) is expected to issue a SRO shortly to provide legal cover to the changes in the capital gains tax regime announced by the finance minister in the visit to the Karachi Stock Exchange last week.
According to Alfalah Securities Limited, the amendment will be applicable by April 1st, 2012 after approval from the law ministry. However, the changes will also be presented before the parliament for approval through a Finance Bill in Federal Budget FY13. The proposals accepted by the finance minister included: capping the present capital gains tax rate of 10% for investments kept for less than 6 months; tax immunity from declaring source of income till 2014; tax deduction directly by National Clearing Company of Pakistan (NCCPL); each stock member allowed exposure of PKR 50 million; and abolishing the withholding tax on sale of shares to avoid double taxation. The changes have resulted in increase trading volumes in the stock market.