Capital Gain Tax-CGT
System
NCCPL
Presentation
September 17, 2012
1
Overview and
Procedures of the New
CGT Regime
2
Overview and Procedures of the New CGT Regime

Following are the Persons/Investors to which new CGT Regime will
be applicable:




•
•
•
•
•
•
•
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;
‘Foreign Institutional Investor’ being a person registered with
NCCPL as a foreign institutional investor; and
any person or class of persons as notified by the FBR.
3
Overview and Procedures of the New CGT Regime

Any Person/Investor may Opt-Out from the new
CGT Regime.

For Opting-Out, Person/Investor shall be required
to file an Irrevocable Option to NCCPL after
obtaining prior approval of the Income Tax
Commissioner.

New CGT Regime will NOT be applied on such
Person/Investor who Opted-Out.
4
Overview and Procedures of the New CGT Regime
Principles of Holding Period of Inventory Before the Promulgation
of New CGT Regime
S.NO. Holding Period
Inventory Age
1.
Securities Balance As- More than One Year
Of 23rd April 2011
2.
Securities have been
Acquired or Disposed
off Between 24th April
2011 to 23rd April 2012.
Price
Closing Price of
23rd April 2011
Determined as per  Market-Based
the
Actual TransactionsAcquisition
and Transaction
Disposal
Price
 Non-MarketBased
TransactionsDeal Price or
Closing Price, as
the case may be.
5
Overview and Procedures of the New CGT Regime
Principles for Physical Securities Deposited into CDS
S.NO. Deposit of Physical
Securities
Inventory Age
Price
1.
Physical
Securities
have been deposited in
CDS
Between
24th
April 2011 to 23rd April
2012
The
Date
of Closing Price of
Acquisition shall be 23rd April 2011
Deemed as 23rd
April 2011
2.
Physical
Securities
have been deposited in
CDS on or after 24th
April 2012
Actual
Date
of
Acquisition
as
Communicated by
CDS. But it should
not be Earlier than
23rd April 2011.
Prevailing
Closing Price of
the
Deposited
Date.
6
Overview and Procedures of the New CGT Regime
Types of Transactions Covered under New CGT Regime:

Marekt Based Transactions


Sale and Purchase Transactions including Day-Trading
Executed or to be Executed on the Trading Platform of the
Stock Exchanges.
Non-Market Transactions

Movement of Securities Through Free-Delivery (FD)
Mechanism of CDS.
7
Overview and Procedures of the New CGT Regime
General Principles for the Determination and
Computation of CGT

CGT will be Determined and Computed on the Transactions and their
Values as Reported to or Provided to or Extracted from the Systems of
Stock Exchanges, Central Depository Company of Pakistan Limited and
NCCPL.

First In First Out (FIFO) Inventory Accounting Method will be used.

In Determination and Computation of CGT, First Priority shall be given
to the Market Based Transactions.

Capital Loss in any Financial Year Shall be Set Off against Capital Gain
of that Financial Year.

Capital Loss in any Financial Year Shall NOT be Carried to a
Subsequent Financial Year.
8
Overview and Procedures of the New CGT Regime
General Principles for the Determination and
Computation of CGT

Fixed Cost of 0.50% on non-proprietary trades and 0.25% on
proprietary trades on Disposal or Acquisition of Securities, as the
case may be, in lieu of all Expenses will be Deducted or Added
while Determination and Computation of CGT.

However, such Fixed Cost shall only be allowed in respect of
Market Based Transactions.

Financing Cost Incurred through NCCPL’s Leveraged Market
Products shall be Taken into Account while Computing Capital
Gains.

CGT shall be Collected on Monthly Basis for Transactions Settled in
a Month, after Adjustment of Losses or Refund of amount collected
of the Previous Month or Months of the Same Financial Year.
9
Overview and Procedures of the New CGT Regime
General Principles for the Determination and
Computation of CGT

CGT shall be Collected From or Through the Respective Clearing
Members on Net Capital Gains of Persons/Investors.

Any Person/Investor, if Not Satisfied with the Computation of
Capital Gain or Tax thereon or both made by NCCPL, such
Person/Investor may Re-Compute the Capital Gain and Lodge Claim
of Refund, if any, with the Commissioner of FBR.

Persons/Investors (covered under new CGT Regime) Shall NOT be
Required to Maintain Records and Accounts w.r.t CGT.

Wash Sales, Cross Trades and Tax Swap Sales Shall not be Taken
into Account by NCCPL while computing Capital Gains.
10
Overview and Procedures of the New CGT Regime
General Principles for the Determination and
Computation of CGT

The Amount Collected by NCCPL, in respect of Capital Gains, on
behalf of the FBR, Shall be Deposited in a Separate Bank Account
with National Bank of Pakistan and such Amount Shall be Paid to
the FBR Alongwith Interest Accrued Thereon on Yearly Basis by
July 31.

In Case of Non-Recovery of CGT from any Person/Investor through
its Clearing Member, for any reason whatsoever, NCCPL Shall Refer
a Particular Case for Recovery of CGT to the FBR.

Defaulted Person/Investor may also be Restricted from Taking New
Positions in all Markets for a Period of Three Months and such
Restriction will be Continued till the Recovery of Amount of CGT.
11
Overview and Procedures of the New CGT Regime
General Principles for the Determination and
Computation of CGT

The Short or Non-Collection of CGT in any Month During the
Financial Year shall Continue to Appear in the CGT Liability of
Coming Month or Months of the Same Financial Year.

Brokerage Account of the Persons/Investors shall NOT be Closed
Until and Unless such Persons/Investors Obtains a Clearance
Certificate from NCCPL.
12
Overview and Procedures of the New CGT Regime
General Principles for the Determination and
Computation of CGT


Following Certificate / Statement Shall be Issued and
Provided by NCCPL:

Annual Certificate Showing Computation of Capital Gains and Tax
thereon, if any, to each Eligible Person/Investor within Thirty Days
from the End of the Financial Year.

Quarterly Statement of Amount Collected from Eligible
Persons/Investors shall be Furnished to the FBR within Thirty Days
from the End of Each Quarter.
Every Person/Investor Shall also File the Annual Certificate,
as provided by NCCPL, Alongwith the Return of Income.
13
CGT System Reports
14
CGT System Reports
Following CGT Reports have been made available in
CGT System:

CGT Gain/(Loss)Detail

CGT Inventory



Slab wise Inventory Balance Report;

Date wise Inventory Detail Report; and

Inventory Balance Detail Report
CGT Consolidated Summery

CGT Consolidated Sum

CGT Gain/Loss Non Inventory
CGT Gain/(Loss) Summery
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CGT System Reports
CGT Consolidated Summery Report (NET CGT OBLIGATION)
1. This Report Contains ALL INFORMATION OF ENITRE CGT:





Current Month CGT Position
Previous Month CGT Position
As of Reporting Month CGT Position
Previous Month Non-Payment and Allocation
Final As of Reporting Month CGT Position
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CGT System Reports
CGT Consolidated Summery
2.
Report Type
CGT Gain/Loss Non Inventory
This Report represents the Gain/Loss and CGT for Square-up
Transactions of Various Market:
 Market-wise Capital Gain/(Loss)
 Total Gain/(Loss)
 Total CGT
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20
CGT System Reports
CGT Gain/(Loss)Detail Report
This Report represents the following out-going information
of Sales/Disposal with Number of Days:
 Symbol
 Taxable and Non-Taxable Quantity
 Capital Gain/(Loss)
 Number of Days
 CGT Slab
 CGT
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CGT System Reports
22
CGT System Reports
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CGT System Reports
CGT Gain/(Loss) Summary (out-going)
This Report
information:
represents
the
following
Detailed
Out-going
 Symbol
 Total Out-going Inventory (Taxable and Non



Taxable Quantity)
Capital Gain/(Loss)
Number of Days
CGT Slab Percentage
CGT
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CGT System Reports
CGT Inventory Report
Report Type
1. Slab wise Inventory Balance Report
This Report represents the following Balance information of
Purchase/Acquisition:
 Symbol
 Applicable Slab Rate of Inventory
 Total Volume
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CGT System Reports
CGT Inventory Report
2.
Report Type
Date wise Inventory Detail Report
This Report represents the following in-coming information of
Purchase/Acquisition :






Symbol
Market Based Inventory
Non-Market Based Inventory
Total Volume
Adjustment of Expenses
Net Purchase Value and Price
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31
CGT System Reports
CGT Inventory Report
3.
Report Type
Inventory Balance Detail Report
This Report represents the following
information of Purchase/Acquisition :




Date-wise
Balance
Symbol
Available Quantity in Inventory
Price
Shares Value
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Thank you !
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