Capital Gains Tax Pakistan 2026: Property & Shares Section 37 Guide

Quick Answer

Capital gains tax in Pakistan is charged on the profit from disposing of a capital asset, not on the sale price. Under Section 37 of the Income Tax Ordinance, 2001, immovable property acquired on or after 1 July 2024 is taxed at a flat 15% for persons on the Active Taxpayers' List. Property acquired on or before 30 June 2024 still follows holding-period slabs that taper from 15% to 0%. Under Section 37A, listed securities acquired on or after 1 July 2024 are taxed at 15% for ATL persons, collected by NCCPL.

Introduction

Almost every Pakistani who sells a plot in DHA, transfers a flat in Karachi, or books a profit on the Pakistan Stock Exchange asks the same two questions: how much tax do I actually owe, and who collects it? The honest answer is that it depends on a date most people have never thought about — the day they acquired the asset. Since the Finance Act, 2024, Pakistan has effectively run two parallel capital gains regimes at the same time, and picking the wrong one is the single most common reason taxpayers either overpay or receive an FBR notice months later. At BACO Consultants, a corporate, tax and legal advisory practice based in Islamabad, this is one of the most frequent queries our tax advisory team handles during the September filing season.

This guide is written to close that gap completely. It covers the law as it stands on 17 September 2026, after the Finance Act, 2026 — including the abolition of Section 7E, the move to flat 2.75% and 1.25% advance taxes on property transfers, and the tightening of the non-filer regime for securities. It explains not just the rates, but the mechanics: how the gain is computed, what counts as cost, who deducts what, where it goes in your return, and what happens when the numbers do not reconcile with your wealth statement.

Disclaimer: This article is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Tax rates and provisions in Pakistan change annually through the Finance Act. Consult a qualified BACO Consultants advisor for guidance specific to your situation before acting on any figure in this guide.

Key Takeaways

• Capital gains tax is charged on gain, not on sale value. The statutory formula in both Section 37 and Section 37A is A − B: consideration received on disposal, minus the cost of the asset.
• The single most important date in Pakistani CGT is 1 July 2024. Assets acquired before it and on/after it are taxed under two completely different regimes that run side by side.
• Property acquired on or after 1 July 2024: flat 15% for ATL persons, with no holding-period relief. Holding the asset longer no longer reduces the rate for these acquisitions.
• Property acquired on or before 30 June 2024: the old taper survives — open plots fall from 15% to 0% over six years, constructed property over four years, flats over two years.
• Securities acquired on or after 1 July 2024: 15% for persons on the ATL on both the acquisition date and the disposal date. Non-ATL persons face slab rates subject to a 15% floor.
• Sections 236C and 236K are not capital gains tax. They are adjustable advance taxes. The Finance Act, 2026 replaced the old slab structure with a flat 2.75% on the seller (236C) and 1.25% on the buyer (236K).
• Section 7E — the deemed-income tax on property — has been omitted by the Finance Act, 2026, following the Federal Constitutional Court of Pakistan's ruling that it was ultra vires.
• Filer status is the largest single variable in your CGT bill. It can double the effective cost of the same transaction.
• For tax year 2026 (year ended 30 June 2026), the return filing deadline for individuals and AOPs is 30 September 2026. Capital gains realised in that year must be declared now, under the pre-Finance Act 2026 framework.

What Is Capital Gains Tax in Pakistan?

Direct answer: Capital gains tax in Pakistan is income tax charged under the head "Capital Gains" on the profit arising when a person disposes of a capital asset. It is levied under the Income Tax Ordinance, 2001, administered by the Federal Board of Revenue (FBR), and applies to the gain — the difference between what you received and what the asset cost you — not to the gross sale price.

Capital gains is one of the five heads of income under Pakistani income tax law, sitting alongside salary, income from property, income from business, and income from other sources. That placement matters: a capital gain is not a windfall outside the tax net, and it is not automatically covered by the advance tax deducted at the registry office.

What counts as a "capital asset"? Section 37(5) defines it as property of any kind held by a person, whether or not connected with a business. The definition then carves out specific exclusions, principally:

• Stock-in-trade, consumable stores and raw materials held for business purposes
• Depreciable assets and amortisable intangibles on which deductions have been claimed
• Movable property held for personal use, subject to the exceptions listed in Section 38(5)

That last exclusion is where most people go wrong. Your personal car is generally outside the net. But the Ordinance specifically pulls certain personal items back in — paintings, sculptures, drawings, jewellery, rare manuscripts, postage stamp collections, coins and medallions, and antiques. Gold and jewellery, in particular, are taxable capital assets, a fact that surprises many taxpayers preparing their wealth statement under Section 116.

Immovable property sits in its own subsection. Section 37(1A), substituted by the Finance Act, 2022, charges gain on disposal of immovable property situated in Pakistan at the rates specified in Division VIII of Part I of the First Schedule. Securities are removed from Section 37 altogether and dealt with separately by Section 37A, with rates in Division VII.

Section 37 vs Section 37A: The Two Charging Provisions

Direct answer: Section 37 of the Income Tax Ordinance, 2001 charges capital gains on general capital assets and, through subsection (1A), on immovable property. Section 37A is a separate, self-contained regime for capital gains on securities — chiefly listed shares, mutual fund units, debt instruments and derivatives — where tax is computed and collected centrally by the National Clearing Company of Pakistan Limited (NCCPL).

The practical differences between the two are substantial, and they explain why a property seller and a share investor have completely different compliance experiences.

Why this split exists. The securities market is centrally cleared and fully digital, so the state can automate collection at the point of settlement. Real estate is not. Every property sale is a bespoke, paper-heavy transaction, so the law leans on withholding at the registry (236C/236K) plus self-assessment in the return.

A key statutory carve-out to remember: Section 37A does not apply to banking companies and insurance companies, whose securities gains fall into their normal business income. It also does not apply to shares of a listed company sold outside the registered stock exchange or not settled through NCCPL — an off-market transfer of listed shares falls back to Section 37. If your business structure makes this distinction relevant, our corporate tax compliance guide for Pakistan sets out the wider framework.

What Counts as a "Disposal"? (Section 75)

Direct answer: Under Section 75 of the Income Tax Ordinance, 2001, a person is treated as having disposed of an asset at the time they part with its ownership — including where the asset is sold, exchanged, transferred or distributed, or where it is cancelled, redeemed, relinquished, destroyed, lost, expired or surrendered. A sale is only one of several events that can trigger capital gains tax.

This is the provision most taxpayers have never read, and it explains several outcomes that feel counter-intuitive.

Events that are disposals:

• Sale — the obvious case
• Exchange — swapping one plot for another is two disposals, not zero
• Gift — parting with ownership without consideration is still a disposal, though Section 79 may prevent a gain from being recognised in defined cases (see the non-recognition section below)
• Transfer or distribution — including distribution of assets on dissolution of a firm or liquidation of a company
• Relinquishment or surrender — giving up rights in an allotment or a file
• Loss or destruction — where compensation or insurance proceeds are received, the disposal is treated as occurring at that point
• Compulsory acquisition — land acquired by a government authority against compensation

Events that are generally not disposals:

• Executing an agreement to sell without parting with ownership
• Creating a mortgage or charge over the property
• Granting a power of attorney, unless the arrangement in substance transfers ownership
• Internal transfer between your own accounts or between two of your own CDC sub-accounts

Why this matters commercially. A property "exchange" deal — very common in Pakistani real estate, where two parties swap plots and settle the difference in cash — is frequently treated by the parties as a single, tax-neutral adjustment. Legally it is two separate disposals, each computed at fair market value, each generating its own capital gain. Similarly, a plot surrendered back to a society against a refund is a disposal, not a cancellation.

Where compensation arises on compulsory acquisition, treatment of the receipt and any withholding needs to be checked against the current provisions. The broader compliance framework is set out in our tax compliance in Pakistan guide.

How Capital Gain Is Calculated: The A − B Formula

Direct answer: Under both Section 37(2) and Section 37A, the gain is computed as A minus B, where A is the consideration received on disposal of the asset and B is the cost of the asset. For immovable property, the FBR compares the declared consideration against its notified fair market value and taxes the higher of the two figures.

That formula looks trivial. In practice, "B" is where almost every dispute begins.

What goes into "A" — Consideration Received

• The sale price actually received, or the FBR-notified fair market value for that locality, whichever is higher
• Any non-cash consideration, valued at fair market value
• For securities, the net sale proceeds as recorded in the settlement system

What goes into "B" — Cost of the Asset

• The original purchase price
• Stamp duty, registration fee and transfer charges paid at acquisition
• Legal and documentation costs directly attributable to acquiring the asset
• Capital improvements — construction, boundary walls, structural additions (routine repairs and repainting do not qualify)
• Brokerage or commission paid on acquisition

The Banking Channel Trap

This is a rule that catches sellers years after the fact. Where immovable property exceeding PKR 5 million has been purchased other than through a banking channel, the cost is not accounted for when determining the taxable gain on a subsequent disposal — and the purchaser can face penal consequences at the time of purchase.

Read that consequence carefully. If you paid PKR 40 million in cash for a plot in 2023, and sell it for PKR 55 million today, the FBR's position is that your allowable cost is effectively disregarded, converting a PKR 15 million gain into a far larger assessed figure. Anyone who has ever been asked to explain their source of income under Section 111 will recognise how quickly this compounds.

Run your own numbers first. Before you sign anything, use the BACO Capital Gains Tax Calculator to model the gain, the rate band and the advance tax overlay for your specific acquisition date.

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Capital Gains Tax on Property in Pakistan (Section 37) — 2026 Rates

Direct answer: Immovable property in Pakistan is taxed under two regimes divided by a single date. Property acquired on or after 1 July 2024 is taxed at a flat 15% for individuals and AOPs on the Active Taxpayers' List at the date of disposal, with holding period irrelevant. Property acquired on or before 30 June 2024 continues under holding-period slabs that taper to zero.

1. Property Acquired On or After 1 July 2024

The design intent here is simple: government wanted to remove the incentive to sit on undeveloped land waiting for the taper to expire. The consequence for investors is equally simple — for post-July-2024 acquisitions, waiting no longer reduces your CGT rate. The only thing waiting changes is the size of the nominal gain.

2. Property Acquired On or Before 30 June 2024

These disposals still run on the pre-Finance Act 2024 taper, which distinguishes between three property categories:

Note the asymmetry — a flat held for 25 months is already at 0%, while an open plot held for the same period pays 10%. Property category is therefore not a cosmetic classification; it is a rate determinant, and it is assessed on the character of the property at disposal.

3. How the Holding Period Is Actually Counted

Direct answer: Holding period runs from the date the asset was acquired to the date it was disposed of. For immovable property, the acquisition date is evidenced by the allotment letter, transfer letter or registered sale deed, depending on how title passed. For securities, it is the trade settlement date recorded in the clearing system. For pre-1 July 2024 property, a difference of a single day can change the rate by up to 5 percentage points.

This is the highest-friction question in Pakistani property taxation, because the market trades three different things that people all call "buying a plot":

The file problem, explained plainly. If you bought a file in 2021, it was balloted into a plot in 2025, and you sell in 2026 — is your holding period five years or one year? The answer determines whether you sit in the old taper regime or the flat 15% regime, and it is worth tens of thousands of rupees per marla. The defensible position depends on the exact documentation trail and how the society recorded the conversion. This is not a question to answer with a guess in the return.

Practical rules for counting:

1. Count from the document, not from the payment. Instalments paid over three years do not extend the holding period backwards.
2. Improvements do not restart the clock. Constructing on an open plot changes the category (open plot → constructed property), which changes the rate table, but it does not reset the acquisition date.
3. Category is assessed at disposal. A plot you built on in year four is sold as constructed property, which uses a faster taper than open plots — sometimes a benefit, sometimes not.
4. Inherited assets: the acquisition date for holding-period purposes and the cost base are governed by the inheritance rules — the Finance Act, 2026 fixed the cost at fair market value on the date of death.
5. For securities, NCCPL applies first-in-first-out lot matching. Your oldest lots are treated as sold first, which is why lot-level records matter.

Borderline holding period? Model both outcomes on the BACO Capital Gains Tax Calculator before you commit to a sale date — a two-week delay can be the difference between 2.5% and 0%.

Get Your Holding Period Reviewed →

4. The Non-Filer Position

For non-ATL sellers, the rate reverts to normal slab rates with a 15% floor. Because slab rates are progressive, a large gain can push a non-filer materially above 15%. Add the enhanced 236C collection under the Tenth Schedule, and the total cash cost of selling as a non-filer is routinely double that of a filer on an identical transaction. If your name has dropped off the list, see how to remove ATL inactive status and how to check the Active Taxpayer List before you sign a sale agreement, not after.

5. Property Situated Outside Pakistan

Capital gains on disposal of immovable property situated outside Pakistan are taxed at applicable slab rates, irrespective of holding period. Resident Pakistanis with property in Dubai, the UK or Canada are within this charge on their worldwide income. Residency status is therefore the threshold question — our guide on how to become a non-resident taxpayer in Pakistan explains the day-count and documentation tests.

6. The 50% Concession for Armed Forces and Government Allottees

The rate of tax on capital gain under Section 37 is reduced by 50% on the first sale of immovable property acquired or allotted to ex-servicemen and serving personnel of the Armed Forces, and to ex-employees or serving personnel of the Federal and Provincial Governments — provided they are the original allottees, duly certified by the allotment authority.

The two operative words are first sale and original allottee. A plot purchased from an allottee does not carry the concession forward to the buyer.

7. Inherited Property and the New Cost Base

The Finance Act, 2026 clarified a long-standing ambiguity: the cost of inherited property is fixed at the fair market value on the date of death, and family settlements are treated as inheritance rather than as a sale.

This is genuinely useful relief. Previously, heirs selling an ancestral property could find themselves taxed on decades of appreciation that accrued in a previous generation's hands. Practically, it means one thing: document the valuation at the date of death. A valuation obtained five years later, retrospectively, is far harder to defend in an audit.

Selling property this season? BACO's annual income tax filing service for salaried individuals and sole proprietors includes full capital gains computation, 236C adjustment and wealth statement reconciliation.

Talk to a Tax Consultant →

When CGT Does Not Apply: Property Dealers, Builders and Stock-in-Trade

Direct answer: Section 37(5) expressly excludes stock-in-trade from the definition of a capital asset. Where a person deals in property as a business — a property dealer, developer, builder or trading company — the profit on sale is business income taxed at normal slab or corporate rates, not capital gain under Section 37. The 15% flat rate and the holding-period taper simply do not apply.

This distinction is worth serious money, and it cuts both ways.

Capital Asset vs Stock-in-Trade

No single factor decides it. The FBR looks at the whole pattern, and your own books of account are the first thing examined — if you have shown plots as inventory and claimed related expenses, you have already characterised them as stock-in-trade.

The Consequences of Each Characterisation

The asymmetry is the point. A dealer with high overheads may pay less overall as a business, because expenses are deductible. An occasional investor with no expenses is usually better off under Section 37. Characterisation should therefore be established deliberately at the outset — not argued for the first time during an audit.

If you are formalising a property business, our guides on the difference between a sole proprietor and a company and business tax compliance in Pakistan set out the trade-offs, and the business/AOP tax calculator gives an indicative comparison.

Running a real estate or construction business? BACO handles private limited company registration, partnership/AOP registration and annual filing with correct stock-in-trade characterisation from day one.

Structure Your Property Business Correctly →

CGT vs 236C vs 236K: Untangling the Three Property Taxes

Direct answer: Sections 236C and 236K are adjustable advance taxes collected at the moment of transfer — 236C from the seller on the consideration received, 236K from the buyer on the fair market value. Capital gains tax under Section 37 is a separate charge on your actual profit. Advance tax paid under 236C is credited against your final CGT liability; it is not the CGT itself.

This is comfortably the most common misconception in Pakistani property taxation. People pay 236C at the registry, assume the matter is closed, and discover a year later that a return was still required.

The Finance Act, 2026 Change

The Finance Act, 2026 replaced the slab-based structure with a uniform flat rate:

Rates effective for FY 2026-27, as of 17 September 2026. Non-ATL persons face enhanced rates under Rule 1 of the Tenth Schedule.

Two further Finance Act, 2026 changes matter here:

1. The "late filer" category for property transactions has been abolished. Rule 1A of the Tenth Schedule was omitted, so a person who filed after the due date but appears on the ATL is now charged at the same rate as an on-time filer. This removes a penalty tier that had caused significant confusion since 2024. See late filer vs non-filer vs active filer for how the categories now stack up.
2. The 7% federal excise duty on allotment and transfer of commercial property and first allotment of open plots has been withdrawn.

The Three-Layer Mental Model

Think of a property sale as three separate layers:

1. Layer 1 — Advance tax at transfer (236C/236K): collected by the registering authority, adjustable, unavoidable.
2. Layer 2 — Capital gains tax (Section 37): computed on your actual gain, declared in your return, reduced by the Layer 1 credit.
3. Layer 3 — Provincial charges: stamp duty, registration fee, town-planning and local authority charges. These are provincial, vary by jurisdiction, and are outside the Income Tax Ordinance entirely.

When Layer 1 exceeds Layer 2 — common on low-margin or long-held sales — you are in a refund position, but only if you file. A full breakdown of the current property withholding landscape is in our property tax Pakistan 2026-27: 236C and 236K rates guide, and you can model the withholding with the withholding tax calculator.

Section 7E Abolished: What Changed for Property Owners

Direct answer: Section 7E of the Income Tax Ordinance, 2001, which taxed a deemed income equal to 5% of the fair market value of specified immovable property at 20% — an effective annual charge of roughly 1% of value — has been omitted by the Finance Act, 2026, following the Federal Constitutional Court of Pakistan's judgment declaring the provision ultra vires. The corresponding rate entry in the First Schedule has also been abolished.

For property owners, three things follow:

• The annual deemed-income charge is gone for tax year 2027 onwards. You are no longer taxed on notional income from a property that generated nothing.
• The 7E certificate hurdle at transfer is removed. For two years, sellers had to obtain a 7E clearance before the registering authority would process a transfer — a genuine bottleneck.
• It does not affect Section 37. Actual capital gain on actual disposal remains fully taxable. Abolishing a deemed-income tax does not abolish a realised-gain tax, and conflating the two is a costly error.

The transitional question — how tax already deposited under Section 7E for earlier years is to be refunded — is one where professional advice is worth having. Our detailed note on Section 7E abolition for tax year 2026-27 covers the position, and revised return vs rectification application explains which route applies to which year.

Capital Gains Tax on Shares and Securities (Section 37A)

Direct answer: Section 37A charges capital gain on disposal of securities at the rates in Division VII of Part I of the First Schedule. For securities acquired on or after 1 July 2024, the rate is 15% for individuals and AOPs appearing on the Active Taxpayers' List on both the acquisition date and the disposal date. Non-ATL persons are charged at personal slab rates subject to a minimum of 15%.

1. What Counts as a "Security"

For the purposes of Section 37A, securities include:

• Shares of a public company listed on a stock exchange (the company must be a public company at the time of disposal)
• Vouchers of Pakistan Telecommunication Corporation
• Modaraba certificates and instruments of redeemable capital
• Debt securities and government securities
• Derivative products, including future commodity contracts entered into by members of the Pakistan Mercantile Exchange (PMEX)
• Units of open-end mutual funds and collective investment schemes

2. The Complete Rate Table by Acquisition Vintage

This is the table most investors need and rarely find in one place:

Holding-period slab for securities acquired between 1 July 2022 and 30 June 2024:

If you have been investing on the PSX for a decade, your portfolio may sit across all four vintages simultaneously, each taxed differently on the same day. This is precisely why the law delegates the computation to NCCPL rather than to the investor.

3. The Dual ATL Test — A Trap Worth Naming

For post-July-2024 securities, the 15% rate requires ATL status on the date of acquisition and the date of disposal. This is stricter than the property rule, which tests ATL only at disposal. An investor who bought shares in a year when they were off the list, then regularised afterwards, does not automatically get the 15% rate on those specific lots.

The practical implication: staying continuously on the ATL is itself a tax-planning strategy for equity investors. The benefits of becoming a tax filer in Pakistan are nowhere more measurable than here.

4. Finance Act, 2026 Tightening for Non-Filers

Sub-rule (y) of the Tenth Schedule — which had excluded tax collected under Section 37A from the Tenth Schedule's reach because progressive non-filer rates already existed — has been omitted by the Finance Act, 2026. The effect is that tax collected under Section 37A is now increased by 100% for persons not appearing on the ATL.

For a non-filer equity investor, this is the single most consequential change of the 2026 budget cycle. If you are unclear where you stand, start with filer vs non-filer: key differences explained.

5. Companies, Banks and Insurance Companies

• Companies are subject to tax at the corporate rate under the normal tax regime in respect of debt securities. Gains on listed equity securities generally follow the Division VII rates.
• Banking companies and insurance companies are outside Section 37A — their securities gains are taxed as business income. However, the Finance Act, 2026 brought them within NCCPL's computation scope: NCCPL now computes and determines capital gains under Section 37A for banking companies, insurance companies and mutual funds, while those entities remain responsible for depositing the tax themselves. This is a documentation and consistency measure, not a change of charge.

Investing through a company structure? BACO handles private limited company registration and annual income tax filing for partnerships and companies, including securities gain reconciliation with NCCPL certificates.

Request a Corporate Tax Review →

How NCCPL Actually Collects Your Share CGT

Direct answer: The National Clearing Company of Pakistan Limited (NCCPL) has been mandated by the FBR to compute, determine, collect and deposit capital gains tax on disposal of listed securities. NCCPL collects CGT monthly, on the basis of each taxpayer's net capital gain, through the taxpayer's securities broker, and refunds excess collections where the investor ends up in a loss position during the tax year.

The statutory architecture is worth knowing, because it tells you which document to rely on at filing time:

• Section 37A — the charge
• Section 100B — the special procedure mandating NCCPL computation
• The Eighth Schedule — the detailed computation rules
• Rules 13N, 13O and 13P of the Income Tax Rules, 2002 — operational mechanics
• Division VII of Part I of the First Schedule — the rates

What This Means for You in Practice

1. You do not calculate your own listed-share CGT. NCCPL does, using its automated CGT system.
2. Collection is monthly and netted. Gains and losses across the month are set off before tax is collected, which is why your broker's deduction fluctuates.
3. Refunds happen inside the system. If a later month produces a net loss, NCCPL refunds excess or entire amounts previously collected, through the broker.
4. You still must report. The gain and the tax collected go into your annual return. The NCCPL CGT certificate is your evidence; obtain it before filing.
5. Off-market transfers fall outside. Shares of a listed company sold outside the registered stock exchange, or not settled through NCCPL, are not within the 37A/NCCPL regime.

Where the NCCPL certificate and your IRIS return do not agree, you are in notice territory. Our guide on common reasons for FBR notices in Pakistan lists mismatch of third-party data among the top triggers.

Mutual Funds, REITs, Debt Securities and Derivatives

Direct answer: A mutual fund, collective investment scheme or REIT scheme deducts capital gains tax at redemption — 15% for stock funds in the case of an individual, AOP or company, and 25% for other funds in the case of a company. No tax is deducted where the holding period of a security exceeds six years.

1. Mutual Funds and Collective Investment Schemes

The deduction is made by the Asset Management Company at the point of redemption — you receive the net amount. Keep the AMC's tax deduction certificate; it is the mutual-fund equivalent of the NCCPL certificate.

2. Debt Securities — A 2026 Increase

The Finance Act, 2026 raised the withholding on gain arising on disposal of certain debt securities held through Investor Portfolio Securities (IPS) accounts, where the disposal occurs outside the exchange system, from 15% to 20%. Every custodian of debt securities is required to deduct at the increased rate.

This affects investors holding government bonds, Sukuk and corporate debt through IPS accounts. It does not touch ordinary PSX share trades.

3. Non-Residents Through FCVA / NRVA Accounts

Non-resident persons investing in Pakistan in debt instruments and government securities through Foreign Currency Value Accounts (FCVA), Non-Resident Pakistani Rupee Value Accounts (NRVA/NPRV), FCBVAs or NRBVAs are subject to a blanket 10% withholding on capital gain arising on disposal of those instruments. This deduction is a full and final discharge of their tax liability.

The Finance Act, 2026 also provided filing relief: individuals maintaining FCVA or NRVA accounts are relieved from filing a return where their Pakistan-source income is limited to profit on debt or specified capital gains and dividends derived from those account proceeds.

4. Derivatives and Commodity Futures

Future commodity contracts entered into by members of the Pakistan Mercantile Exchange (PMEX) are subject to tax at 5%.

Capital Gains on Unlisted and Private Company Shares

Direct answer: Section 37A applies only to securities disposed of through a registered stock exchange and settled through NCCPL. Shares of a private limited company or a public unlisted company therefore fall outside Section 37A and are taxed under Section 37 at normal slab rates for individuals and AOPs, and at the corporate rate for companies. The Finance (Supplementary) Act, 2023 also introduced a fair market value rule and an advance tax collection obligation on the acquirer of such shares.

This is the single biggest blind spot for founders, startup shareholders and family business owners — and it is entirely absent from most published guides.

Key Differences from Listed Shares

The Fair Market Value Rule (Section 37(6) and Rule 19H)

Where shares of a private or unlisted company are disposed of, fair market value cannot simply be whatever the parties write on the transfer deed. Rule 19H of the Income Tax Rules, 2002 prescribes a formula-based valuation:

FMV per share = (A + B + C − D) × E ÷ F
Where:
A = book value of all assets other than those in B
B = fair value of assets such as immovable property, jewellery and antiques, determined under Section 68
C = fair market value of shares as computed under the sub-rule
D = book value of all liabilities, excluding provisions, contingent liabilities, unpaid dividends, provision for taxation, and capital and reserves
E = paid-up value of equity shares
F = paid-up equity share capital

Why this rule exists. Before it, shares in an asset-rich private company could be transferred at par value, extracting the underlying property appreciation tax-free. The formula pulls the underlying immovable property back in at Section 68 fair value, which is why a company holding land will have a share FMV far above its book value.

Advance Tax on the Acquirer

Persons acquiring shares of private companies and public unlisted companies are required to deduct advance tax from the gross consideration paid. The obligation sits on the buyer, not the seller — a structural reversal that catches acquirers by surprise in share purchase transactions.

Practical consequence for SPA drafting: the tax clause in a Pakistani share purchase agreement must allocate this deduction explicitly. A "consideration free of all taxes" clause without a gross-up mechanic is an invitation to a post-closing dispute.

Non-Residents and Section 101A

Where a non-resident company disposes of, or alienates outside Pakistan, an asset located in Pakistan — including shares deriving their value from Pakistani assets — the gain is treated as Pakistan-source income and charged under Section 101A. Where tax has been paid under that section, no further tax is payable in respect of the gain under Section 22(8), Section 37 or Section 37A.

This is the provision that captures offshore holding structures. If your group holds Pakistani assets through a foreign SPV, a share sale at the SPV level is not automatically outside the Pakistani net. Related reading: registering a company in Pakistan with foreign directors and corporate tax planning strategies.

Selling or buying private company shares? BACO advises on share valuation, SPA tax clauses, acquirer withholding and SECP filings end to end — see our corporate tax and compliance services.

Book a Share Transfer Review →

Other Capital Assets: Vehicles, Machinery, Gold and Agricultural Land

Direct answer: Capital gains on movable capital assets other than securities traded on a stock exchange are taxed at normal slab rates for individuals and at the corporate rate for companies. Depreciable business assets are dealt with under Section 22(8) rather than Section 37, and gains on jewellery, antiques and similar personal items are fully taxable because Section 38(5) removes them from the personal-use exclusion.

Business Vehicles, Plant and Machinery

Assets on which depreciation has been claimed are excluded from the capital asset definition. When you sell them, the excess of sale proceeds over written-down value is brought to tax as business income under Section 22(8) — a depreciation recoupment, not a capital gain. Any excess of proceeds over original cost is dealt with separately.

Practically: selling a five-year-old company car above its book value generates business income, and it belongs in the business schedule of the return, not in the capital gains block. Our small business accounting guide covers the fixed asset register discipline that makes this straightforward.

Personal Vehicles

A car held for personal use is generally outside the capital asset definition, because Section 37(5) excludes movable property held for personal use — subject to the Section 38(5) exceptions, which do not cover vehicles. Selling your own car at a profit therefore does not normally produce a taxable capital gain. It still has to reconcile within your wealth statement.

Gold, Jewellery, Antiques and Collectibles

Section 38(5) specifically pulls the following back into charge, notwithstanding personal use:

• Paintings, sculptures, drawings and other works of art
• Jewellery
• Rare manuscripts, folios and books
• Postage stamp collections
• Coins and medallions
• Antiques

Gains on these are taxable at normal slab rates. Equally important: no loss is recognised on their disposal. You are taxed on the upside and denied relief on the downside — an asymmetry worth knowing before treating gold as a tax-efficient store of value.

Given Pakistani households' concentration in gold, this is a genuine and widely-missed exposure. It also has a wealth statement dimension: gold declared at one value and sold at another must reconcile, per the Section 116 reconciliation guide.

Agricultural Land

This is a genuinely contested area, and any guide that gives you a confident one-line answer should be treated with caution.

• Agricultural income — income derived from land used for agricultural purposes — is constitutionally a provincial subject and is exempt from federal income tax, subject to the conditions in the Ordinance.
• Capital gain on the disposal of land, however, is not agricultural income in the ordinary sense. Since the Finance Act, 2022, Section 37(1A) charges gain on disposal of immovable property situated in Pakistan without a general carve-out for agricultural land.
• The practical position depends on the land's classification, its use, whether it has been converted to residential or commercial use, and the province in which it sits.

For provincial agricultural tax, see the agricultural tax calculator.

Property vs Securities: Side-by-Side Comparison

The strategic read: securities CGT is administratively easier but harder to plan around, because collection is automatic and monthly. Property CGT is administratively heavier but leaves the taxpayer in control of timing, documentation and cost substantiation — which is exactly why property is where advisory adds the most value.

Worked Examples: Six Real Calculation Scenarios

The following are illustrative scenarios constructed to demonstrate the mechanics. They are not client case studies, and the figures are hypothetical.

Example 1 — Open Plot Acquired Before the Cut-Off (Taper Applies)

• Plot purchased 10 August 2023 for PKR 12,000,000
• Sold 5 September 2026 for PKR 19,500,000
• Transfer, registration and commission at acquisition: PKR 500,000
• Seller is on the ATL

Gain (A − B): 19,500,000 − (12,000,000 + 500,000) = PKR 7,000,000
Regime: acquired before 1 July 2024 → old Division VIII taper
Holding period: 3 years 1 month → "exceeds three but not four years"
Category: open plot → 7.5%
CGT: 7,000,000 × 7.5% = PKR 525,000
236C collected at transfer: 19,500,000 × 2.75% = PKR 536,250
Net position: advance tax exceeds CGT by PKR 11,250 — a refundable/adjustable credit, recoverable only by filing a return.

Example 2 — Constructed House Acquired After the Cut-Off (Flat Rate)

• House purchased 15 September 2024 for PKR 25,000,000
• Sold 20 August 2026 for PKR 34,000,000
• Allowable acquisition and improvement costs: PKR 1,000,000
• Seller is on the ATL

Gain: 34,000,000 − 26,000,000 = PKR 8,000,000
Regime: post-1 July 2024 → flat 15%, holding period irrelevant
CGT: PKR 1,200,000
236C: 34,000,000 × 2.75% = PKR 935,000
Balance payable with return: PKR 265,000

Example 3 — The Same Sale by a Non-Filer

Identical facts to Example 2, but the seller is not on the ATL at disposal.

• CGT: normal slab rates apply, subject to a minimum of 15%. Because slabs are progressive, a PKR 8 million gain added to other income can push the effective rate materially above 15%.
• 236C: collected at the enhanced Tenth Schedule rate — 2.75% increased by 100% = 5.5%, i.e. PKR 1,870,000 at the registry.
• Cash flow impact: nearly PKR 935,000 of additional cash blocked at transfer, before the final liability is even computed.

The lesson is blunt: ATL status is worth more than most negotiation on price. Check yours using the ATL Pakistan 2026 guide.

Example 4 — Listed Shares, Post-July-2024 Purchase

• 20,000 shares purchased 12 March 2025 at PKR 150 = PKR 3,000,000
• Sold 10 September 2026 at PKR 215 = PKR 4,300,000
• Investor on the ATL on both dates

Gain: PKR 1,300,000
Rate: 15% (post-July-2024 vintage, dual ATL test satisfied)
CGT: PKR 195,000, computed and collected by NCCPL through the broker, netted against any losses in the same month.

Example 5 — Legacy Shares Held Since 2019

• Shares acquired June 2019, sold September 2026, gain PKR 2,000,000

Rate: 12.5% flat, irrespective of holding period (acquired between 1 July 2013 and 30 June 2022)
CGT: PKR 250,000

Note the counter-intuitive outcome: the investor who held for seven years pays 12.5%, while the investor who held for eighteen months on a post-2024 purchase pays 15%. Vintage, not duration, is doing the work.

Example 6 — Mutual Fund Redemption

• Stock fund units redeemed by an individual, gain PKR 600,000, held 3 years

Deduction at redemption by the AMC: 15% = PKR 90,000
Had the units been held more than six years, no deduction would apply.

Step-by-Step: How to Calculate, Pay and Report CGT

Direct answer: Determine the acquisition date to identify the regime, compute the gain as consideration less cost, apply the correct Division VII or Division VIII rate, credit any advance tax already collected under 236C or by NCCPL, declare the gain in the capital gains section of your IRIS return, reconcile with your wealth statement, and pay any balance before the due date.

Step 1 — Fix the Acquisition Date

Pull the original allotment letter, sale deed, or broker contract note. This date determines which of the parallel regimes applies. Everything downstream depends on it.

Step 2 — Classify the Asset

Open plot, constructed property, or flat for Section 37. Listed equity, debt security, mutual fund unit, or derivative for Section 37A. Category changes the rate.

Step 3 — Establish Consideration (A)

For property, compare your actual sale price against the FBR notified valuation table for the locality and use the higher figure. For securities, take the settled proceeds.

Step 4 — Establish Cost (B)

Assemble purchase price, stamp duty, registration fee, legal costs, brokerage and documented capital improvements. Confirm that payments above PKR 5 million went through a banking channel.

Step 5 — Apply the Correct Rate

Use the Division VIII table for property or the Division VII table for securities, selected by acquisition vintage and ATL status. Sanity-check the figure on the BACO capital gains calculator.

Step 6 — Credit Advance Tax Already Paid

Enter 236C deducted at the registry, or the NCCPL-collected amount from your CGT certificate, as an adjustable credit.

Step 7 — Declare in IRIS

Log in to the FBR IRIS portal and enter the gain under the capital gains head, with the correct asset classification. If you are new to the portal, follow the FBR IRIS registration step-by-step guide; if the portal misbehaves — and in filing season it does — see FBR IRIS 2.0 problems and fixes.

Step 8 — Reconcile the Wealth Statement

The asset must leave your wealth statement, and the net proceeds must appear as cash, a new asset, or explained expenditure. An unreconciled movement is the fastest route to a Section 111 query. Use the Section 116 wealth reconciliation guide.

Step 9 — Generate the PSID and Pay

Create the payment slip and pay through your bank or online. Full walkthrough in FBR PSID payment: generate and pay tax online and how to pay income tax online in Pakistan.

Step 10 — File Before the Deadline

For individuals and AOPs, the return for tax year 2026 (year ended 30 June 2026) is due 30 September 2026. Check current dates against the Pakistan tax filing deadline guide and the penalty exposure on the late filing penalty calculator.

Don't want to do this yourself in the last two weeks of September? BACO's income tax return filing services cover computation, IRIS submission, wealth reconciliation and post-filing notice support.

Book Your Filing Slot →

Step 11 — Advance Tax Under Section 147 After a Large Gain

Direct answer: A large capital gain in one tax year can increase your latest assessed tax to the point where quarterly advance tax instalments become payable under Section 147 in the following year. Many taxpayers plan only for the September filing date and are then surprised by a September, December, March and June instalment obligation, plus default surcharge for missing them.

How the trap works:

1. You sell a property in tax year 2026 and declare a large gain.
2. Your assessed tax for that year is correspondingly high.
3. Section 147 obliges taxpayers above the prescribed threshold to pay advance tax quarterly in the following year, calculated by reference to the latest assessed position.
4. Your income in the next year is back to normal — but the instalment demand is based on the year that included the one-off gain.

What to do about it:

• Anticipate it at the time of sale, not when the first instalment notice arrives.
• Where the following year's income will genuinely be lower, Section 147 permits a taxpayer to file an estimate of the lower liability, subject to conditions. Getting this estimate right — and filing it on time — is the mechanism that prevents overpayment.
• Diarise the quarterly dates. Missing an instalment attracts default surcharge even where the annual return is eventually correct.

See deadlines for monthly and quarterly tax filing in Pakistan for the calendar, and tax planning strategies for businesses for the wider cash-flow approach.

Documents and Records You Must Keep

Direct answer: Keep the acquisition deed, proof of banking-channel payment, all transfer and registration receipts, improvement invoices, the 236C/236K challans, the NCCPL or AMC tax certificate, and the notified valuation table extract for the relevant year. Cost cannot be claimed if it cannot be evidenced.

Property checklist:

• ☐ Original sale deed / allotment letter / transfer letter with dates
• ☐ Bank statements or instruments evidencing payment through banking channel
• ☐ Stamp duty, registration and society transfer fee receipts
• ☐ Contractor invoices and material bills for construction or improvement
• ☐ Property tax and utility records establishing the property's character
• ☐ Valuation report where inheritance or gift is involved
• ☐ 236C and 236K challans / CPRs
• ☐ NTN and CNIC of both parties — verify via NTN verification online

Securities checklist:

• ☐ Broker contract notes showing acquisition dates and lot-wise cost
• ☐ CDC account statements
• ☐ NCCPL CGT certificate for the tax year
• ☐ AMC tax deduction certificates for mutual fund redemptions
• ☐ IPS account statements for debt securities
• ☐ Evidence of continuous ATL status across acquisition and disposal dates

How long? Retain records for at least six years from the end of the tax year to which they relate, and longer for property where the taper or a legacy cost base may become relevant on a future sale. Our monthly tax compliance checklist sets out a practical retention discipline for businesses.

Joint Ownership, Gifts and Non-Recognition Rules (Section 79)

Direct answer: Where property is jointly owned, the capital gain is apportioned between co-owners in proportion to their respective shares, and each co-owner's own ATL status determines the rate applied to their share. Section 79 provides that no gain or loss is taken to arise on certain disposals — including transmission of an asset on death and specified gifts — with the recipient taking over the disponer's cost, subject to conditions.

Joint Ownership and Co-Owners

Joint ownership is extremely common in Pakistan — between spouses, siblings, or partners in an informal investment. Three rules govern it:

1. The gain is split by ownership share, not by who received the money. A 50:50 owner declares 50% of the gain, even if the entire sale proceed was credited to one bank account.
2. ATL status is tested individually. If one co-owner is on the ATL and the other is not, they pay different rates on the same transaction. The filer takes 15%; the non-filer faces slab rates with a 15% floor, plus enhanced 236C collection.
3. 236C is collected proportionately and each co-owner claims credit for their own share. A co-owner who does not file forfeits their share of the credit entirely.

The practical failure mode: one sibling handles the sale, files their own return correctly, and the others never file. Two years later the non-filing co-owners receive notices, with no 236C credit claimed and no cost documentation in their own names. Fixing this retrospectively costs far more than filing would have.

If the arrangement is commercial rather than familial, consider formalising it — see joint ventures in Pakistan: legal and tax guide and partnership registration in Pakistan.

Non-Recognition Under Section 79

Section 79 sets out disposals on which no gain or loss is taken to arise. Where the rule applies, the recipient is generally treated as acquiring the asset for the same cost the disponer had — the tax is deferred, not forgiven, and it crystallises when the recipient eventually sells.

Broadly, the non-recognition treatment covers situations such as:

• Transmission of an asset to an executor or to a beneficiary on the death of a person
• Gift of an asset in the circumstances specified in the section
• Specified transfers within corporate reorganisations and amalgamations

Two conditions that are routinely missed:

• The relief generally does not apply where the recipient is a non-resident. A gift of Pakistani property to a son living permanently in Canada may not obtain non-recognition treatment.
• Where the Finance Act, 2026 fixes the cost of inherited property at fair market value on the date of death, that rule interacts with the general cost carry-over principle. The two need to be read together for any inheritance disposal.

Gifts — The Practical Warning

A gift is a disposal under Section 75. Whether a gain is recognised depends on Section 79. What is never optional is the documentation:

• ☐ Registered gift deed, properly stamped
• ☐ Clear evidence of the relationship between donor and donee
• ☐ Donor's own source of funds for the original acquisition, documented
• ☐ Corresponding entries in both parties' wealth statements for the same tax year

Undocumented gifts between family members are among the most common triggers for proceedings under Section 111. The donee is asked to explain the asset; the donor is asked to explain the original acquisition. See how to explain source of income and wealth reconciliation under Section 111.

Planning a family transfer, gift or inheritance settlement? BACO advises on deed structuring, valuation evidence and both parties' return positions so the transfer survives scrutiny years later.

Discuss a Family Transfer →

Exemptions, Reliefs and Non-Recognition Rules

Direct answer: Pakistan's capital gains regime provides relief mainly through rate reduction over time (for pre-cut-off assets), full exemption after long holding periods on legacy assets, non-recognition on inheritance and certain family transfers, a 50% concession for original-allottee government and armed forces personnel, and final-discharge treatment for qualifying non-residents.

Where CGT does not arise, or is reduced:

A caution on "exemption certificates." The Finance Act, 2025 authorised the Commissioner to issue an exemption certificate from advance tax under Section 236C for a qualifying residential property, available only once in fifteen years. This is relief from advance tax, not from capital gains tax itself. If you are considering an application, read how to apply for a tax exemption certificate in Pakistan and who needs a tax exemption certificate.

Overseas Pakistanis and Non-Residents

Direct answer: Non-resident Pakistanis are taxed in Pakistan only on Pakistan-source income, which includes gains on immovable property situated in Pakistan and on Pakistani securities. Non-residents holding a POC, NICOP or CNIC who acquired property through an FCVA or NRVA account may find the tax collected under Section 236C operates as a final discharge in lieu of Section 37 CGT.

Three points overseas investors consistently get wrong:

1. Non-resident does not mean non-filer. Filer benefits — including the 15% rate rather than slab rates, and the 2.75% rather than 5.5% advance tax — depend on ATL status, and a non-resident can and should be on the ATL. Clause 111AC of Part IV of the Second Schedule provides that Section 100BA and Rule 1 of the Tenth Schedule do not apply to non-residents holding a NICOP or POC.
2. Worldwide income is not taxed for non-residents, but it is for residents. The 183-day test governs. Spending too long in Pakistan in a tax year can bring a Dubai property gain into the Pakistani net. See tax rules for overseas Pakistanis.
3. Account structure determines treatment. Whether the acquisition was funded through an FCVA/NRVA changes the discharge mechanism entirely. Structure it before you buy, not when you sell.

For the filing mechanics, see income tax return for overseas Pakistanis and filing a tax return for overseas Pakistanis.

Selling Pakistani property from abroad? BACO handles end-to-end representation for non-residents — NTN registration, ATL activation, 236C adjustment and return filing without you flying back.

Speak to Our Overseas Desk →

Decision Matrix: Sell Now or Hold?

Use this to frame the timing decision. It is a planning aid, not advice on a specific transaction.

The central insight: for post-July-2024 assets, Pakistan has removed the tax reason to delay a sale. The planning lever has shifted from when you sell to what status you sell in and how well you evidence your cost. Broader planning options are covered in how to reduce tax liability in Pakistan and best tax saving tips for individuals.

Capital Losses: Set-Off and Carry-Forward

Direct answer: Losses on disposal of listed and other securities may be set off against capital gains on securities and, from tax year 2019 onwards, carried forward and set off against future securities gains for a maximum of three tax years. Losses under Section 37 are set off against capital gains, and no loss is recognised at all on the personal-use assets listed in Section 38(5).

Key rules:

• Securities losses: set off against securities gains; carry-forward up to 3 tax years. NCCPL nets these within the year automatically and refunds excess collection through the broker.
• Section 37 losses: available for set-off against capital gains, but the Ordinance does not extend the securities-style carry-forward to this head.
• No loss recognised on disposal of: paintings, sculptures, drawings, jewellery, rare manuscripts, folios or books, postage stamp collections, coins and medallions, and antiques (Section 38(5)).

A frequently missed point: a loss must be declared to be carried forward. Investors who skip a filing year because they made no profit lose the ability to use that year's losses against future gains. This alone justifies filing a nil or loss return — see how to file a nil tax return in Pakistan.

The Real Cost of Selling: Full Transaction Breakdown

Illustrative breakdown for an ATL seller disposing of a property for PKR 20,000,000 acquired after 1 July 2024 for PKR 14,000,000:

Figures illustrative, as of 17 September 2026. Provincial charges vary materially by jurisdiction.

Critical distinction: note that the 236C payment is not an additional cost — it is a prepayment of the CGT. Sellers who treat it as a separate tax overstate their transaction cost by roughly 2.75% of value and, worse, fail to claim the credit.

Super Tax and Surcharge: The Hidden Layer

Direct answer: Capital gains form part of income for the purposes of Section 4C super tax, so a single large disposal can push a taxpayer across a super tax threshold that their ordinary income would never reach. The Finance Act, 2026 abolished super tax for persons with income up to PKR 500 million and reduced the rate from 10% to 8% for those above, and abolished the Section 4AB surcharge from tax year 2027.

What this means in practice:

• For most individual property and share investors, super tax is not in play after the 2026 threshold change.
• For high-value disposals — large commercial property, a substantial share exit, or a company disposing of a significant asset — the gain enters the income base for super tax purposes, and the marginal cost of the transaction is higher than the headline 15%.
• The abolition of the Section 4AB surcharge from tax year 2027 modestly reduces the all-in burden for high earners, separate from the CGT rate itself.

Planning implication: where a taxpayer expects a very large one-off gain, the interaction between the gain, the super tax threshold and the timing of the disposal across two tax years is worth modelling before signing. This is one of the few remaining areas where timing genuinely changes the tax outcome for post-July-2024 assets. See corporate tax planning strategies and the tax savings calculator.

Common Mistakes That Trigger FBR Notices

1. Treating 236C as the final tax. It is adjustable advance tax. The return is still due, and the CGT may exceed it.
2. Applying the wrong regime. Using the taper on a post-July-2024 acquisition, or the flat 15% on a pre-cut-off one. Both produce wrong numbers in opposite directions.
3. Misclassifying the property. Treating a constructed house as an open plot, or vice versa, changes the rate by up to 5 percentage points per year band.
4. Claiming undocumented cost. Improvement costs without invoices are routinely disallowed on audit.
5. Ignoring the banking-channel rule. Cash purchases above PKR 5 million can cost you the entire cost deduction.
6. Assuming ATL status at disposal is enough for shares. Section 37A tests ATL at both acquisition and disposal.
7. Not obtaining the NCCPL certificate. Filing from broker statements rather than the official certificate produces mismatches with FBR's third-party data.
8. Failing to reconcile the wealth statement. The asset disappears but the proceeds are unexplained — a direct invitation to a Section 111 proceeding.
9. Forgetting to declare a loss year. Losses not declared cannot be carried forward.
10. Using last year's valuation table. FBR notified values are revised; using a stale table understates consideration.

When a notice does arrive, do not ignore it. See how to handle tax notices from FBR and the FBR notice response guide.

Expert Tips and Best Practices

• Check your ATL status before you sign, not before you register. Reinstatement takes time, and the transaction clock does not wait.
• Reconstruct your cost base in advance of listing the property. Assembling ten-year-old receipts under transaction pressure is how deductions get lost.
• For legacy assets, calendar the taper thresholds. A plot sold at 5 years 11 months pays 2.5%; at 6 years and one day it pays nothing. That is a 2.5% swing for a two-week wait.
• Keep lot-level records for shares. Vintage determines rate. An undifferentiated portfolio makes it impossible to verify NCCPL's computation.
• Never sign a sale deed with an understated consideration. It does not reduce CGT (the FBR value applies anyway), and it destroys your cost base for the buyer's future sale while exposing both parties to penal action.
• Document valuations at the date of death immediately for inherited property. The new FMV cost base is only as good as your evidence.
• Pay attention to the tax year, not the calendar year. A disposal on 28 June falls in a different tax year to one on 2 July, with real consequences for taper thresholds and cash flow.
• Model the after-tax return, not the headline gain. A 25% nominal gain at 15% CGT plus transaction costs is a meaningfully different investment outcome.

Penalties and Consequences of Non-Disclosure

Direct answer: Failure to declare a capital gain exposes the taxpayer to default surcharge on unpaid tax, penalties for non-filing or late filing, loss of ATL status with its attendant higher withholding rates across all transactions, and potential proceedings under Section 111 for unexplained income or assets.

The consequences compound rather than stand alone:

• Default surcharge accrues on tax not paid by the due date.
• Late filing penalty applies, and the late filing penalty calculator gives an indicative figure. Prevention strategy is covered in how to avoid late tax filing penalties.
• Removal from the ATL, which raises withholding across property transfers, banking transactions, vehicle registration and more.
• Section 111 proceedings where proceeds cannot be reconciled — this is an assessment on unexplained income, not merely a penalty.
• Amendment of assessment under Section 122 where the Commissioner considers the declared gain understated. The remedy is the appeal route — see the tax appeal process in Pakistan.

If you have already filed and realise a capital gain was omitted, the correction route depends on the nature of the error — how to correct mistakes in an FBR income tax return explains when to file a revised return and when to apply for rectification.

Already received a notice about a property or share disposal? BACO's tax litigation and representation team handles notices, hearings and appeals across FBR jurisdictions.

Get Notice Support →

Latest Updates and What to Watch in 2027

By the Numbers: Pakistan's CGT Landscape

Prompt rule 5B and 6B prohibit invented statistics, so this section is deliberately left as a sourced template rather than filled with plausible-sounding numbers. Insert verified figures only, each with its source and date, then delete this note.
Recommended data points to source and insert:

Format each inserted line like this: "According to the FBR Year Book 2025-26, collection under Section 236C stood at PKR X billion, up Y% year on year." Named body, specific number, explicit period. This is what AI search engines cite.

As of 17 September 2026, the following changes are in force or recently enacted:

What to watch going forward:

• Convergence pressure. Property and securities now share a 15% headline rate. Continued alignment of the two regimes is plausible.
• The shrinking legacy pool. Every year, fewer assets remain in the pre-July-2024 taper. By roughly 2030, the taper will be largely historical and Pakistan will effectively have a single flat CGT regime.
• Deeper digitisation. NCCPL's expanded computation mandate, digital invoicing and IRIS 2.0 all point the same direction: more third-party data matching, less room for undeclared gains.
• Provincial divergence on transaction costs. With federal transfer taxes falling, provincial stamp duty and registration charges become a larger share of total cost — and they differ materially by province.

A consolidated view of this budget cycle is in top 10 tax changes in Pakistan Budget 2026-27.

Why Choose BACO Consultants for Capital Gains Tax in Pakistan

Capital gains tax is one of the few areas of Pakistani tax law where the difference between a competent filing and a careless one is measured in hundreds of thousands of rupees — not in points of principle. The reason is structural: the law currently runs two regimes in parallel, the cost side of the calculation depends entirely on documentation you may have assembled years ago, and the advance tax layer is credited only if someone actually claims it. That combination rewards precision and punishes guesswork.

BACO Consultants is a corporate, tax and legal consultancy based in Islamabad, working across income tax, sales tax, SECP corporate compliance and legal advisory. Capital gains work sits at the intersection of all of those — a single property disposal can involve a valuation question, a banking-channel question, a wealth reconciliation question and, occasionally, a title question. Our multidisciplinary team handles the transaction as one matter rather than passing it between specialists.

What our capital gains engagement covers:

• Regime determination and rate application — establishing the correct acquisition vintage and confirming the applicable Division VII or Division VIII rate for your specific asset category and ATL position
• Cost base reconstruction — assembling and testing the documentation that supports every rupee of claimed cost, including the banking-channel position on pre-2024 acquisitions
• Advance tax recovery — ensuring 236C, 236K and NCCPL collections are correctly credited, and that refund positions are actually claimed rather than quietly forfeited
• IRIS filing and wealth reconciliation — filing the return so that the disposal, the proceeds and the wealth statement tell one coherent story
• Notice, audit and appeal representation — handling Section 122 amendments, Section 111 queries and appeals where a gain is disputed
• Transaction-stage advisory — structuring the disposal, timing it against taper thresholds where they still apply, and confirming ATL status before the deal closes rather than after

We also maintain a free public calculator suite and an extensive tax knowledge library precisely because informed clients make better decisions — and because a correctly framed question at the start of a transaction is worth more than any amount of remedial work at the end.

Book a Consultation with BACO Consultants →

Frequently Asked Questions

Q1. What is the capital gains tax rate on property in Pakistan in 2026?
For immovable property acquired on or after 1 July 2024, the rate is a flat 15% for individuals and AOPs on the Active Taxpayers' List at the date of disposal, regardless of how long the property was held. For property acquired on or before 30 June 2024, holding-period slabs apply, tapering from 15% to 0% depending on property category and years held.

Q2. Is 236C the same as capital gains tax?
No. Section 236C is an adjustable advance tax collected from the seller at the time of transfer, currently 2.75% of the consideration received for ATL persons. Capital gains tax under Section 37 is charged on your actual profit. The 236C amount is credited against your CGT liability when you file your return.

Q3. Do I still get holding-period relief on property?
Only for property acquired on or before 30 June 2024. Acquisitions from 1 July 2024 onwards are taxed at a flat rate with no holding-period taper, so holding the property longer does not reduce the rate.

Q4. What is the capital gains tax on shares in Pakistan?
For listed securities acquired on or after 1 July 2024, the rate is 15% for persons on the ATL on both the acquisition and disposal dates. Securities acquired between 1 July 2013 and 30 June 2022 are taxed at 12.5% irrespective of holding period, and securities acquired before 1 July 2013 are taxed at 0%.

Q5. Who collects capital gains tax on PSX shares?
The National Clearing Company of Pakistan Limited (NCCPL) computes, determines, collects and deposits CGT on disposal of listed securities. Collection is monthly, based on net capital gain, and is made through the investor's securities broker. NCCPL also refunds excess collections where a net loss arises during the tax year.

Q6. Has Section 7E been abolished?
Yes. Section 7E, which taxed deemed income from specified immovable property, was omitted by the Finance Act, 2026 following the Federal Constitutional Court of Pakistan's judgment declaring it ultra vires. The corresponding rate entry in the First Schedule was also removed. Actual capital gains under Section 37 remain fully taxable.

Q7. How is capital gain calculated in Pakistan?
Gain equals consideration received on disposal minus the cost of the asset. For property, the FBR compares the declared price against its notified fair market value and taxes the higher figure. Cost includes purchase price, stamp duty, registration fees and documented capital improvements. Tax applies to the gain, not the sale price.

Q8. Do non-filers pay more capital gains tax?
Yes, substantially. Non-ATL persons are taxed at normal slab rates subject to a 15% minimum on both property and securities, and face advance tax collection enhanced by 100% under the Tenth Schedule. On an identical transaction, the total cash cost for a non-filer is routinely close to double that of a filer.

Q9. Can I carry forward a capital loss on shares?
Yes. From tax year 2019 onwards, losses on disposal of listed and other securities may be carried forward and set off against future capital gains on securities for a maximum of three tax years. The loss must be declared in a filed return to be available for carry-forward.

Q10. Do overseas Pakistanis pay capital gains tax on Pakistani property?
Yes, on Pakistan-source gains. However, non-residents holding a POC, NICOP or CNIC who acquired the property through an FCVA or NRVA account may find that tax collected under Section 236C operates as a final discharge in lieu of Section 37 CGT. Non-residents should also maintain ATL status to access filer rates.

Q11. Is tax payable on gold and jewellery in Pakistan?
Yes. Jewellery is specifically brought within the capital asset definition through Section 38(5), so gains on disposal are taxable. Movable capital assets other than securities traded on a stock exchange are taxed at normal slab rates for individuals.

Q12. What is the deadline to declare capital gains for tax year 2026?
For individuals and AOPs, the return for tax year 2026 — the year ended 30 June 2026 — is due by 30 September 2026. Confirm the current date with FBR, as deadlines are occasionally extended by circular.

Q13. Is a gift of property taxable in Pakistan?
A gift is a disposal under Section 75. However, Section 79 provides non-recognition treatment for specified gifts, meaning no gain or loss is taken to arise and the recipient generally takes over the donor's cost. The relief typically does not apply where the recipient is a non-resident, and a registered gift deed with documented relationship evidence is essential.

Q14. Do property dealers pay capital gains tax?
Generally no. Section 37(5) excludes stock-in-trade from the definition of a capital asset, so a property dealer's profit is business income taxed at normal slab or corporate rates rather than capital gain under Section 37. Business expenses are deductible, but the 15% flat rate and holding-period taper do not apply.

Q15. How is capital gains tax calculated on private limited company shares?
Shares of a private or unlisted company are outside Section 37A because they are not disposed of through a registered stock exchange. The gain falls under Section 37 and is taxed at normal slab rates for individuals or the corporate rate for companies. Where consideration is below fair market value, Rule 19H of the Income Tax Rules, 2002 prescribes a formula-based valuation.

Q16. If a property is jointly owned, who pays the capital gains tax?
Each co-owner is taxed on their proportionate share of the gain, based on their ownership share rather than on who received the sale proceeds. Each co-owner's own ATL status determines their rate, and each must file a return to claim their share of the Section 236C credit.

Q17. Do I have to pay capital gains tax on selling gold or jewellery?
Yes. Section 38(5) removes jewellery, antiques, artworks, rare manuscripts, stamp collections and coins from the personal-use exclusion, so gains on their disposal are taxable at normal slab rates. Notably, no loss is recognised on the disposal of these assets.

Conclusion

Pakistan's capital gains regime is not complicated in principle — gain equals consideration minus cost, taxed at a schedule rate — but it is unforgiving in detail. The single most important fact in this entire guide is that 1 July 2024 splits the law in two. Get the acquisition date right and everything downstream follows. Get it wrong and you will either overpay or file a return that does not survive contact with FBR's data.

The 2026 picture is, on balance, better for property owners than the one before it. Section 7E is gone. Advance tax at transfer has fallen to 2.75% for sellers and 1.25% for buyers. The late-filer penalty tier on property has been removed. But the direction of travel for non-compliance is sharply the other way: the Tenth Schedule now bites on securities, NCCPL's computation mandate has widened, and third-party data matching keeps improving.

Our key recommendation: treat your ATL status and your cost documentation as the two assets that determine your capital gains outcome. Everything else — timing, structure, negotiation — is secondary to those two. Verify your ATL position before you sign a sale agreement, and reconstruct your cost base before you list the asset, not after the deed is executed.

Your logical next step: if you have disposed of property or securities during the year ended 30 June 2026, your return is due on 30 September 2026. Run your numbers on the BACO Capital Gains Tax Calculator, and if the position is not straightforward — inherited property, a legacy cost base, a non-resident structure, or a disposal you have already received a notice about — get it reviewed before you file rather than after.

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