Tax on Gold in Pakistan

What "tax on gold" means in Pakistan

Gold touches the tax system in three separate ways. Treat each one on its own:

1. Declaration. Gold you own is an asset and belongs in your wealth statement.
2. Purchase. Sales tax can apply when you buy jewellery or gold from a business.
3. Sale or transfer. Withholding tax or capital gains rules can apply when you sell gold or move money linked to a gold deal.

The Federal Board of Revenue (FBR) sets these rules through the Finance Act, the Income Tax Ordinance, the Sales Tax Act and the notifications it issues each year. Rates change, often at budget time.

This page does not give any tax rate. Check the current rates on the FBR website or with a tax adviser, and note the date you checked.

Declaring gold in your wealth statement

A wealth statement is a list of everything you own and owe at the end of the tax year. Individual taxpayers file it with their annual income tax return. Gold and jewellery go in the section for personal assets.

What to record:

• Description. Jewellery, bars, coins. Note the purity. Our gold purity guide explains how karats affect value.
• Weight. Use one unit throughout, for example tola or grams. See tola, masha and ratti for conversions, or use the gold tola calculator.
• Value. Generally the cost at which you acquired the gold. Gold received as a gift or inheritance should be declared with a note on its source. Check the FBR instructions for the valuation basis that applies to your case.
• Changes during the year. Purchases, sales and gifts should match the money flows in the rest of your statement. FBR compares your assets with your declared income. Gold bought with undeclared money can lead to questions.

Keep purchase receipts from the jeweller, gift deeds and inheritance documents. Without them it is hard to explain the value later.

Sales tax on jewellery purchases

When you buy jewellery from a registered business, sales tax may be charged on the sale. The rate and the base can differ between:

• the gold value and the making charges,
• plain gold and jewellery set with stones,
• large integrated retailers and small sarafa shops.

For the rate that applies on the day you buy, check the FBR sales tax schedules or ask the jeweller to show the tax line on the invoice. Ask for a proper invoice in any case. It is your proof of cost for the wealth statement.

Sarafa associations publish the daily gold rate per tola. That rate is usually a market price before sales tax and making charges. Our page on how the gold rate is set explains the difference.

Withholding tax and the filer status

Withholding tax is tax collected at the point of a transaction, such as a bank transfer, a cash withdrawal or a property deal, and later adjusted against your annual tax liability.

Pakistan's tax rules often treat filers (people on FBR's Active Taxpayers List) and non-filers differently, with non-filers paying more on many transactions. Gold purchases and sales paid through banks can be affected by these general withholding rules. For the current rates, check the withholding tax card that FBR publishes after each budget.

Selling gold: gains and wealth tax questions

• Capital gains. A profit on selling gold can count as a capital gain. Whether it is taxed, and how the holding period matters, depends on the rules for that tax year. Check FBR guidance before you file.
• Wealth tax. People searching "gold wealth tax pakistan" usually mean declaration in the wealth statement. Check the current law on FBR before assuming any separate annual tax applies to holding gold.
• Zakat is a religious obligation, separate from income tax. See zakat on gold.

Gold traded as a CFD

Gold traded as a price contract (for example XAUUSD on a trading platform) is not physical gold. Per the SECP, offshore forex and CFD platforms operate without regulatory approval in Pakistan, and per the SBP, remitting foreign exchange to such platforms is not allowed through any payment channel. Read law and regulators before you consider this. Leveraged CFD trading can lose money fast.

Where to check official information

• FBR website: income tax return forms, the wealth statement form, sales tax schedules, the withholding tax card and the Active Taxpayers List.
• Sarafa associations: daily gold rates. See gold in Pakistan.
• A registered tax adviser: for gifts, inheritance or large sales.

More on related topics: payments, tax and Islamic banking.

Frequent questions

Do I have to declare jewellery in my wealth statement?

Gold and jewellery are assets and generally belong in the wealth statement. Check the current FBR return form for the exact field and valuation basis.

What is the gold purchase tax in Pakistan?

Sales tax can apply to jewellery bought from businesses, and the rate can differ by type of seller. Check the current FBR schedule or the tax line on your invoice.

Is withholding tax charged on gold jewellery?

Withholding tax can apply to related transactions, with different rates for filers and non-filers. Check the current FBR withholding tax card.

Does a filer pay tax when selling gold?

A gain on sale may be taxable under capital gains rules. Whether it is depends on the rules for that year. Check FBR guidance or ask a tax adviser.

How do I value inherited gold?

Record its weight, purity and source, and keep the inheritance documents. Check FBR instructions on the value to declare.