How is capital gains tax on shares worked out?
Section 37A charges the gain on disposal of securities at the rates in Division VII of Part I of the First Schedule. The gain is the consideration received minus the cost of acquisition (section 37A(1A)). Securities include shares of a public company, PTC vouchers, modaraba certificates, instruments of redeemable capital, debt securities, units of exchange traded funds and derivative products. The gain is a separate block of income.
Securities acquired 1 July 2022 to 30 June 2024
| Holding period | Rate |
|---|---|
| Up to 1 year | 15% |
| Over 1, up to 2 years | 12.5% |
| Over 2, up to 3 years | 10% |
| Over 3, up to 4 years | 7.5% |
| Over 4, up to 5 years | 5% |
| Over 5, up to 6 years | 2.5% |
| Over 6 years | 0% |
Other acquisition dates
| Acquired | Rate |
|---|---|
| On or after 1 July 2024, on the ATL at acquisition and disposal | 15% |
| On or after 1 July 2024, not on the ATL | Division I (individuals, AOPs) or Division II (companies); at least 15% for individuals and AOPs |
| 1 July 2013 to 30 June 2022 | 12.5% |
| Before 1 July 2013 | 0% |
| Future commodity contracts by members of Pakistan Mercantile Exchange | 5% |
For a person not on the active taxpayers' list, the calculator applies the tax year 2027Division I table to the gain alone and takes the higher of that and 15%. The real figure depends on total income. For companies, debt securities are taxed at the Division II rates.
What do mutual funds and REITs deduct on redemption?
| Unit holder | Stock funds | Other funds |
|---|---|---|
| Individual or association of persons | 15% | 15% |
| Company | 15% | 25% |
Where a stock fund's dividend receipts are less than its capital gains, the rate is 15%. No capital gains tax is deducted where a security acquired on or before 30 June 2024 has been held for more than 6 years. The proviso applies only to a mutual fund, collective investment scheme or REIT scheme.
Where the rates come from
Every rate is read from the Income Tax Ordinance, 2001 as consolidated by FBR. The rates on this page were last checked against the official text on 2026-09-26.
- Income Tax Ordinance, 2001, section 37A, capital gain on disposal of securities (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, First Schedule, Part I, Division VII, printed pages 523 to 525 (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, First Schedule, Part I, Division I, clause (1), rates for individuals and AOPs (as amended to 2026-06-30) official file
- Income Tax Ordinance, 2001, section 37, capital gains, where section 37A does not apply (as amended to 2026-06-30) official file
Common questions
What is the capital gains tax on shares bought after 1 July 2024?
15% of the gain for a person on the active taxpayers' list on both the date of acquisition and the date of disposal, whatever the holding period. Otherwise Division I rates apply to individuals and AOPs, with a floor of 15%, and Division II rates to companies.
What rate applies to shares bought between 1 July 2022 and 30 June 2024?
The holding period table: 15% if held up to one year, falling by 2.5 points a year to 0% once held more than six years.
What about older shares?
Securities acquired from 1 July 2013 to 30 June 2022 are taxed at 12.5% of the gain. Securities acquired before 1 July 2013 are taxed at 0%.
Does section 37A apply to every sale of shares?
No. It does not apply to a banking company or an insurance company. It also does not apply to shares of a listed company disposed of other than through a registered stock exchange and not settled through NCCPL, or through an initial public offer unless the details are given to NCCPL. Section 37 applies to those instead.
What rate does a mutual fund deduct on redemption?
Under a proviso to Division VII, a mutual fund, collective investment scheme or REIT scheme charges and deducts 15% for individuals and AOPs, and for companies 15% on stock funds and 25% on other funds. Nothing is deducted where a security acquired on or before 30 June 2024 is held more than 6 years.