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Capital Gains Tax on Stocks

CGT Capital Gain Tax capital gains tax CGT gains capital tax property

146 replies to this topic

#1
meg

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    Stock exchanges: FBR to propose 10 percent CGT from July 1


    ISLAMABAD (February 20 2010): The Federal Board of Revenue (FBR) will propose 10 percent capital gains tax (CGT) on stock exchanges from July 1, 2010, whereas withholding tax on shares transactions would not be abolished along with imposition of the CGT. Sources told Business Recorder here on Friday that the rate of CGT is much higher in European countries.

    In case of India, 10 percent CGT is applicable on stock exchanges. As compared to higher rates applicable in other countries, 10 percent CGT is a reasonable rate, which would be discussed in the meetings with the stock exchanges. However, the withholding tax on all trading transactions made in the stock exchanges would remain intact during the next fiscal year.

    The FBR has started consultative meetings with the stock exchanges so that they should know well before time about the imposition of CGT on stock exchanges. At present, exemption of capital gains tax on stock exchanges is available under clause-110 of Part-I of the Second Schedule of the Income Tax Ordinance 2001. Sources said that excise duty in value-added tax (VAT) mode would be abolished under the proposed Federal VAT Act, 2010. The Federal Excise Act would not be abolished from next fiscal year to continue with the excise duty applicable on a few commodities.

    The new VAT Act would be discussed with the Parliamentarians in the next meeting of Senate standing committee on finance. President Asif Ali Zardai has also shown interest in briefing on the new VAT law. Once the law would be passed by the Parliament, an in-depth debate would take place among the stakeholders in May-June period.

    Sources said that the Expeditious Refund System has to be implemented along with the enforcement of Federal VAT Act. If the system of speedy payment of refund failed, the whole scheme of VAT would be distorted. The whole scheme of VAT depends on prompt payment of refunds under the new scheme. There is a strong possibility of not taking additional revenue generation measures in the fourth quarter (April-June) 2009-10, keeping in view the current pace of revenue collection.

    The revenue collection in the third quarter of current fiscal year would be strictly monitored before taking any decision for taking additional measures. The growth in December 2009 increased from 9 percent to 20 percent. Moreover, large-scale manufacturing is showing growth and along with sales tax and income tax registration is also improving. The audit of associations of persons (AOPs) and corporate sector has been started and recovery of outstanding arrears would also improve revenue collection.

    The enforcement and administrative actions would also be instrumental in increasing collection. The increasing prices of POL products would also increase revenue collection. "We have the month of March 2010 to analyse position of revenue collection", sources added.

    During the recent meeting in Dubai, the International Monetary Fund (IMF) and FBR agreed on the revenue collection target of Rs 1380 billion for 2009-10. IMF has been further informed that the total number of business returns had been substantially increased following extension in date of filing of returns. Sources said that the FBR has discovered 58,000 properties in Karachi where owners are earning huge amount of rental income, but are not filing income tax returns.

    On the basis of information available from Foreign Office, around 70 houses have been rented to foreign missions and embassies in Karachi, but the owners are neither paying any taxes nor filing returns. When the FBR received data, the tax managers were shocked that owners of such embassies and foreign missions, earning rent in US dollars, are the most influential and powerful individuals of Pakistan.

    Without disclosing names, sources said that most of owners of property rented to foreign missions are most influential people of the country. Some of the names are so prominent that if their names are disclose, people would be surprised that such famous people are not filing their income tax returns.

    The FBR will also issue notices to the owners of property earning rental income in US dollars from embassies in capital, but failed to file returns. All commercial and industrial consumers of electricity would be asked to submit their status whether they are registered or not. Around 2.7 million commercial connections of electricity have been obtained by persons engaged in business activities like manufacturing, service providers like clinics/private hospitals, showrooms and many other professionals engaged in business activities.
    it is just my Opinion !!!!


    #2
    meg

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    this news can have worse impact on mkt.............
    it is just my Opinion !!!!

    #3
    AAB SAIFY

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    QUOTE (meg @ Feb 20 2010, 01:09 PM) <{POST_SNAPBACK}>
    this news can have worse impact on mkt.............

    Can someone explain in detail ,
    How it will be and what will be ,
    Bcz i dont have any idea on what will be cgt ,
    will it be the gain which we make in trading ,
    for exmple ,
    I bought 1000 bafl @ 13 and sold @ 14 ,
    i gained 1000 -10% cgt = 900 ,
    is this cgt or its some thing else ,
    Tax tax de de keh awam ka bura hal hai ,
    tax denay k bawjood awam ko kia milta hai ,
    Insaaf no
    Protection no
    Healthcare no
    bus tax tax tax do is kay badlay kuch nahi milta aur na he milay ga.

    ALLAH KARM KARAY

    MY VIEWS ARE BASED ON MY CALCULATIONS OF SCRIPTS CHART I CALLED IT CHARTS ECG READING KNOWN AS TECHNICALS ,NO ONE CAN PREDICT 100% TREND MOVEMENT,
    MIGHT HIT ON SPOT AND MIGHT NOT , MY VIEWS ARE JUST FOR SHARING ,
    NOR BUY OR SELL CALLS..................TRADE CARE FULLY AVOID BADLA,
    THANKS FOR READING MY VIEWS. *** AAB SAIFY ***

    "Losers are people who are AFRAID OF LOSING" ( ROBERT KIYOSAKI )
    Fact: Eighty-five percent of people who get into stock market lose their money. That’s the reality.
    SO DONT BE RABBIT TO WIN Be turtle and win the Game.

    STOCK MARKET IS JUST LIKE BELOW SAYS !
    ="The cat will mew and dog will have his day"

    #4
    african magic baba

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    QUOTE (AAB SAIFY @ Feb 20 2010, 02:10 PM) <{POST_SNAPBACK}>
    Can someone explain in detail ,
    How it will be and what will be ,
    Bcz i dont have any idea on what will be cgt ,
    will it be the gain which we make in trading ,
    for exmple ,
    I bought 1000 bafl @ 13 and sold @ 14 ,
    i gained 1000 -10% cgt = 900 ,
    is this cgt or its some thing else ,
    Tax tax de de keh awam ka bura hal hai ,
    tax denay k bawjood awam ko kia milta hai ,
    Insaaf no
    Protection no
    Healthcare no
    bus tax tax tax do is kay badlay kuch nahi milta aur na he milay ga.

    ALLAH KARM KARAY



    i spoke to someone with good investment today on cgt affair,he remarked similar as u r saying bro

    #5
    meg

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    Today Shokat Tareen is meeting wit KSE ................

    Lets c.......
    it is just my Opinion !!!!

    #6
    MJI

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    Government and KSE reach accord on CGT: tax to be charged on two types of holdings

    KARACHI (February 23 2010): The government has decided to impose Capital Gain Tax on purchase of securities, to be charged on two types of holdings at the rate of 7.5 percent and 10 percent, with effect from July 1, 2010. It was decided at a meeting on Monday that the CGT will be charged on two types of holdings, at the initial rate of 10 percent for first two years, where the holding period is less than six months and @7.5 percent where the holding period exceeds six months but is less than 12 months.

    Shaukat Tarin, who presided over the meeting declared that in order to promote savings and capital formation, CGT will not be charged where the holding period is over 12 months. It was also decided that the above mentioned rates will remain unchanged for two years.

    After two years, an annual increment of 2.5 percent on the holding period of less than six months and 0.5 percent on the holding period of between six and 12 months will be implemented, brining the respective rates finally to 17.5 percent and 10 percent.

    It was also decided that to promote capital formation, initial public offering of companies will be given tax incentives as long as a substantial portion of their capital is offered to the public. The minister appreciated the initiative of the Karachi Stock Exchange to discuss a long-term framework for CGT.

    Federal Board of Revenue Chairman Sohail Ahmed, Member Tax Policy (Direct Tax) Israr Rauf and a delegation of Karachi Stock Exchange comprising MD Adnan Afridi, Member Director Dawood Jan Muhammad, leading KSE member Aqeel Karim Dedhi and others also attended the meeting.



    Take care yourself

    Regards,

    MJI

    http://islamicgolden...e.blogspot.com/







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