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Gain Tax-CGT
NCCPL
NCCPL
Presentation
1
New section 100(B) has been inserted in the Income Tax Ordinance, 2001.
For detailed treatment of CGT, following new Rules and Procedures have
been introduced in the Income Tax Ordinance, 2001:
Rules for the Computation of CGT on Listed Securities have been devised in
Eight Schedule under section 100(B) of the Income Tax Ordinance, 2001.
Special Procedures for Computation of Capital Gains and Collection of Tax under
the Eighth Schedule and Other Related Matters described in Section 13N of the
Part III of the Chapter II of the Income Tax Rules, 2002 .
Overview and
Procedures of the
New CGT Regime
Individual Investors;
Brokers; and
Corporate Entities.
However, following Persons/Investors will NOT be covered under new CGT
Regime:
Mutual fund;
Banking Company;
Non-Banking Finance Company;
Insurance Company;
Modaraba; and
any person or class of persons as notified by the FBR.
be
applied
on
such
Rates of CGT:
Year
2014-15
12.50%
10.00%
Capital Loss in any Financial Year Shall be Set Off against Capital Gain
of that Financial Year.
12
14
15
Explanation and
Treatment of Market
and Non-Market
Based Transactions
16
Type of
Transactions
Impact on
Inventory
Pricing
Sale &
Purchase of
Securities
Through
Trading
Systems
Inventory
Taken
Out/In on
FIFO
Basis on
Settlement
Date
CGT Shall be
Computed as
per Rates in
accordance
with the
Holding Period
Squaring up
Transactions
in Ready,
Futures and
Derivatives
(Day-(Trading)
No Impact
on
Inventory
Average Purchase
Price
10% on the
Capital Gains,
if any.
Purchase/Acquisition
Tax Treatment
Sale/Disposal
Average Sale
Price of the
Security Sold
17
Type of
Impact on
Transactions Inventory
Pricing
Purchase/Acquisitio
n
Sale/Disposal
Tax Treatment
Sale &
Purchase
through
Negotiated
Deal Market
(NDM)
Inventory
Taken Out/In
on FIFO
Basis on
Settlement
Date
Average
Purchase/
Acquisition Price
Deal Price or
Closing Price
at Ready
Market
whichever is
Higher
CGT Shall be
Computed as
per Rates in
accordance
with the
Holding Period
Transfer of
Securities
Owing to
Privatization
Inventory
Move-in the
Buyers
Account and
Move-out
from
Privatization
Commission
s
(PC)Account.
Acquisition Price
Not Recorded
for PC.
No CGT for
Federal or
Provincial
Government
on Transfers.
18
Type of
Impact on
Transactions Inventory
Pricing
Tax Treatment
Purchase/Acquisition
Sale/Disposal
Transfer
Owing to
Acquisition
Inventory
Taken
In/Out on
FIFO Basis.
Purchase/Acquisition
Price
Actual
Selling or
Negotiated
or Quoted
Price as the
case may
CGT Shall be
Computed as
per Rates in
accordance
with the
Holding Period
Buy-back of
Shares
Inventory
Taken
In/Out on
FIFO Basis
Purchase/Acquisition
Price
Price Paid by
the Company
to Acquire
the Shares .
CGT Shall be
Computed as
per Rates in
accordance
with the
Holding Period
19
Type of
Impact on
Transactions Inventory
Pricing
Tax Treatment
Purchase/Acquisition
Sale/Disposal
N/A
Portfolio
Transfer
where all
UINs are
Matching
No Impact
on the Age
of Inventory
Age
Original
Purchase/Acquisition
Price
Transfer /
Transmission
upon Death
Shares are
Transferred to
the Beneficiary
with the same
Date of
Acquisition as
was in the
hands of
Deceased
Person
Original
Purchase/Acquisition
Price as was in the
hands of Deceased
Person
N/A
N/A
N/A
20
Type of
Impact on
Transactions Inventory
Transfer for /
against
GDRs -
GDRs are
Converted
into Shares
Transfer for /
against
GDRs Deposits into
Depository
and Get
GDRs
Pricing
Purchase/Acquisition
Tax Treatment
Sale/Disposal
N/A
N/A
Inventory
Taken Out
on FIFO
Basis
Closing Price
of the Date of
Transfer
CGT Shall be
Computed as
per Rates in
accordance
with the
Holding Period
Purchase/Acquisition
Price
21
Type of
Impact on
Transactions Inventory
Purchase/Acquisition
Sale/Disposal
Reversal of
Erroneous
Transfers
Closing Price of
the Transaction
Date
N/A
No CGT
No CGT
Inventory
Taken In/
Out on
FIFO Basis
Shares are
Gift
Transactions Transferred
to the
Beneficiary
with the same
Date of
Acquisition as
was in the
hands of
Transferee
Pricing
Tax Treatment
22
Type of
Impact on
Transactions Inventory
Pricing
Tax Treatment
Purchase/Acquisition
Sale/Disposal
Pledge call
Inventory
shall be
Taken out
from the
Defaulters
Account
Average
Purchase/
Acquisition Price
Closing
Price of the
Date of the
Pledge Call
CGT will be
Computed as per
the Holding
Period.
Default in
Delivery by
Seller and
Subsequent
Squaring-up
by NCCPL
No Impact
on Delivery
Defaulter.
Average
Purchase/
Acquisition Price
Square-up
Price
CGT Shall be
Computed as
per Rates in
accordance
with the
Holding Period
Inventory
Taken Out
on FIFO
Basis From
the Squareup Seller
23
Type of
Impact on
Transactions Inventory
Pricing
Tax Treatment
Purchase/Acquisition
Sale/Disposal
Right Issue
Upon
Exercise of
Right or
Purchase,
Inventory
Recorded at
the Credit
Date
Subscription Cost
of the Right Shares
N/A
N/A (However,
LoR trading
shall be
subject to CGT
@ 10%)
Bonus
Shares
Inventory
Recorded at
the Bonus
Credit Date
Ex-Price
N/A
NA.
24
Type of
Impact on
Transactions Inventory
De-Merger
Existing
Companys
Shareholding is
Reduced with the
Revised
Shareholding.
Pricing
Tax Treatment
Purchase/Acquisition
Sale/Disposal
Same Cost of
Acquisition of the
Existing Company
N/A
N/A
Price Adjusted in
Accordance with
the Merger Ratio
N/A
N/A
New
Shareholding in
the New
Company With
the Same Date of
Acquisition of
Existing
Company
Merger
No change
In Ownership
Extinguished
Security
Replaced with
New Security
with Merger
Ratio
25
Type of
Impact on
Transactions Inventory
Pricing
Tax Treatment
Purchase/Acquisition
Sale/Disposal
Specie
Dividend
Shares will be
Added in the
Share Holders
Account at the
Date on which
Shares are
Credited.
Zero Price
Deal Price on
Issuing
Company
CGT Shall be
Computed for
Issuing
Company as
per Rates in
accordance
with the Holding
Period .
Capital
Reduction /
Splitting of
Shares /
Conversion
Inventory
Replaced and
Adjusted as
per Ratio or
Division.
Cost of Acquisition
of New Shares will
Remain Same, as it
was for Existing
Shares
N/A
N/A
26
Type of
Impact on
Transactions Inventory
Pricing
Tax Treatment
Purchase/Acquisition
Sale/Disposal
Transfer
under TaxNeutral
Court
Orders
Shares are
Transferred to
the Beneficiary
with the same
Date of
Acquisition as
was in the
hands of
Transferee
Shares are
Transfer
under Taxable Transferred to
Court Orders the Beneficiary
Cost as was in
the Hands of
Transferee
N/A
N/A
Closing Price of
the Date of
Transfer
Closing Price
of the Date of
Transfer
CGT will be
Computed as per
the Holding
Period.
27
Type of
Impact on
Transactions Inventory
Pricing
Tax Treatment
Purchase/Acquisition
Sale/Disposal
Offer for
Sale
Securities are
Credited on
Acquisition
Date
Cost of
Acquisition
N/A
N/A
28
The Net Difference in the Hands of the Borrower resulting in completing the
whole transaction. (Difference of the Price of the Sale and Re-Purchase).
29
Thank
you !
30