What capital gains tax on shares means
A capital gain is the profit you make when you sell shares for more than you paid. Capital gains tax (CGT) is the income tax on that profit. In Pakistan, CGT on listed shares falls under the Income Tax Ordinance, and the Federal Board of Revenue (FBR) sets and publishes the rates.
If you sell at a loss, there is no gain to tax. That loss can matter for your other gains in the same year (see below).
This page does not list CGT percentages. The Finance Act changes them often, and the rate that applies depends on details covered below. The rates in force today are in the current Income Tax Ordinance schedules on the FBR website and in the CGT material published by the National Clearing Company of Pakistan (NCCPL). Check the date on any rate table you rely on, including tables on broker or news sites.
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Who supervises share trading and collects CGT
Per the regulator, it is the Securities and Exchange Commission of Pakistan (SECP), with trading in listed securities and commodities only via SECP-licensed securities and futures brokers. In practice:
- SECP licenses brokers and regulates the market.
- PSX (Pakistan Stock Exchange) is where listed shares trade. See PSX explained.
- CDC (Central Depository Company) holds your shares in electronic form. See CDC accounts.
- NCCPL clears and settles trades. It also calculates and collects CGT on listed securities through your broker.
- FBR sets the tax law and rates and maintains the Active Taxpayers List.
On finding a broker, per the SECP, lists of licensed brokers are on the PSX and PMEX websites. Open an account only with a broker on those lists. See how to open a trading account.
What decides your CGT rate
Your CGT rate on PSX shares depends on these factors.
When you bought the shares
The law has changed over the years, so shares bought in different periods can be treated differently. Newer rules have linked the rate to the tax year in which the shares were acquired. Older rules linked it to how long you held them. Shares bought under an earlier regime may still follow the older holding-period bands when you sell them.
How long you held them
Holding period means the time between buying and selling. Under holding-period rules, a shorter hold has usually meant a higher rate. Very long holdings have sometimes been exempt. Check whether your shares fall under such rules, and which bands apply, in the current FBR schedule.
Filer or non-filer
A filer is a person whose name appears on the FBR Active Taxpayers List (ATL). A non-filer is not on the list. Pakistan's tax law generally charges non-filers higher rates on many transactions, including dividend withholding. For CGT, check in the current schedule whether a separate non-filer rate applies to your shares.
You can check your ATL status through the FBR's official channels. If you are not on the list, file your return before you rely on filer rates.
Type of security
Shares, mutual fund units and REIT units can be treated differently. Check the category that matches what you hold.
How CGT is calculated and collected
The gain
The basic calculation is simple:
Capital gain = sale value − cost of acquisition
The cost of acquisition is normally the purchase price plus allowed costs such as brokerage on the purchase. If you bought the same share several times at different prices, NCCPL applies a set method to decide which lots you sold. A common method is "first in, first out". Check NCCPL's current method on your own statement.
Collection through NCCPL
For listed securities, NCCPL calculates CGT using the trade data from your broker. It nets gains and losses for the tax period and collects the tax through your broker. You should be able to get a CGT statement or certificate from your broker or through NCCPL.
Keep these statements. You will need them for your annual return. Compare them with your own records.
Losses
Capital losses on listed securities can generally be set off against capital gains on listed securities. The law has also allowed unused losses to be carried forward for a limited number of tax years. The rules and time limits are in the Income Tax Ordinance. Check the current version or ask a tax adviser.
A capital gain tax calculator
This site has no CGT calculator. To estimate the tax yourself:
- Add up your sale values for the period.
- Subtract the cost of the lots sold, including allowed costs.
- Net off losses against gains.
- Apply the rate that matches your acquisition date, holding period and filer status, taken from the current FBR schedule.
Your NCCPL statement is the figure the system actually uses.
Tax on dividends
A dividend is the part of a company's profit that it pays to shareholders. Tax on dividends is usually withheld at source: the company deducts the tax before it pays you, so you receive the net amount.
The rate depends on:
- Your filer status. Non-filers are generally charged a higher rate.
- The type of company or fund. Some sectors and fund types have their own dividend rates.
Your dividend advice from the company or registrar shows the gross amount, the tax deducted and the net amount. Zakat may also be deducted in some cases unless you have filed a valid exemption declaration. Check the current rules with your broker, CDC or the share registrar.
Withholding on dividends is often treated as final tax. You still report dividends in your return. Check the current FBR rules for how they count toward your total income.
Records to keep
| Document | Where it comes from | Why you need it |
|---|---|---|
| Trade confirmations | Your broker | Proof of buy and sell prices |
| CGT statement | Broker / NCCPL | Gain, loss and tax collected |
| CDC account statement | CDC | Holdings and transfers |
| Dividend advices | Company or registrar | Dividends and tax withheld |
| ATL status check | FBR | Confirms filer status |
For wider tax and payment topics, see Payments, tax, Islamic banking. For how trades settle, see the settlement cycle.
Shares are not CFDs
This page covers shares you own through a PSX broker and CDC. Contracts for difference (CFDs) on offshore platforms, including brokers such as Exness, are a different product. Pakistani regulators treat them differently. On offshore platforms, per the SECP, offshore forex/CFD platforms operate without regulatory approval in Pakistan. See Regulation and Safety and Law and regulators.
Share prices can fall, and you can lose part or all of what you invest. Leveraged CFD and forex trading can lose money much faster. Tax applies to gains, not to the risk you take.
Frequent questions
Where do I find the current CGT rate for PSX shares?
Check the current Income Tax Ordinance schedules on the FBR website and NCCPL's published CGT information. Rates change with Finance Acts, so check the date of any table you use.
Does CGT on stocks in Pakistan depend on whether I am a filer?
Filer status, meaning your name is on the FBR Active Taxpayers List, affects many tax rates in Pakistan, including dividend withholding. Check the current schedule for how it affects the CGT on your shares.
Do I pay CGT myself or does the system deduct it?
For listed securities, NCCPL calculates and collects CGT through your broker. You still report your gains in your annual return.
Can I offset losses on shares?
Capital losses on listed securities can generally be set off against capital gains on listed securities. Limited carry-forward has also been allowed. Check the current rules with the FBR or a tax adviser.
How is tax on dividends paid?
The company withholds it before paying you. The rate depends on your filer status and the type of company or fund.
Is CGT on shares the same as tax on CFD profits?
No. They are different products with different legal treatment. See Regulation and Safety for how Pakistani regulators view offshore CFD platforms.