The Capital Gains Tax (CGT) on futures commodity contracts, entered into by members of Pakistan Mercantile Exchange (PMEX), would be the same as it is for the Tax Year 2017 and would remain at 5 percent for filers and non-filers in Tax Year 2018 onwards. Under the Finance Bill 2017, capital gains on disposal of securities, rate of tax to be paid on disposal under section 37A shall be as follows: Where holding period of a security is less than 12 months, the CGT would be 15 percent for filers and 18 percent for non-filers in Tax Year 2017; and 15 percent for filers and 20 percent for non-filers in Tax Year 2018 and onwards.

Where holding period of a security is 12 months or more but less than twenty-four months, the capital gains tax would be 12.5 percent for filers and 16 percent for non-filers in tax year 2017 and 15 percent for filers and 20 percent for non-filers in tax year 2018 and onwards.

Where holding period of a security is 24 months or more but the security was acquired on or after 1st July, 2013, the capital gains tax would be 7.5 percent for filers and 11 percent for non-filers in tax year 2017; while 15 percent for filers and 20 percent for non-filers in tax year 2018 and onwards. Where the security was acquired before 1st July, 2013, the capital gains tax would be 0 percent for filers and non-filers in tax year 2017 as well as tax year 2018 and onwards. Future commodity contracts entered into by members of Pakistan Mercantile Exchange, the CGT would be 5 percent for filers and non-filers not only in tax year 2017 but also in tax year 2018 and onwards.

Copyright Business Recorder, 2017