What is the capital gains tax on shares sold on the Pakistan Stock Exchange? (Share bechne par kitna tax lagta hai?)

Selling shares at a profit on the Pakistan Stock Exchange creates a capital gain that is taxed under its own section of the Income Tax Ordinance, 2001. The rules below are from the Ordinance as amended to 30 June 2026 and apply to disposals in tax year 2027 (1 July 2026 to 30 June 2027).

Roman Urdu mein: share bechne par jo munafa hota hai us par section 37A ke tehat tax lagta hai. 1 July 2024 ya us ke baad khareede gaye shares par, agar aap dono tareekhon par Active Taxpayers’ List mein hain, to rate 15% hai.

What does the law say?

Section 37A(1) says capital gain “from disposal of securities” is chargeable “at the rates specified in Division VII of Part I of the First Schedule”. Four other parts of the section shape the charge:

• The formula. Section 37A(1A) computes the gain as A minus B, where “‘A’ is the consideration received by the person on disposal of the security” and “‘B’ is the cost of acquisition of the security.”
• A separate block. Section 37A(4): “Gain under this section shall be treated as a separate block of income.” It is not added to salary, business or rental income.
• What counts as a security. Section 37A(3) defines “security” to include a “share of a public company, voucher of Pakistan Telecommunication Corporation, Modaraba Certificate, an instrument of redeemable capital”, debt securities, units of exchange traded funds and derivative products. Sub-section (3B) says shares count if the company “is a public company at the time of disposal”.
• Holding period. Section 37A(2) reckons the holding period from the date of acquisition to the date of disposal.

What is the rate for shares bought on or after 1 July 2024?

Division VII has two rate columns. Column (4) covers securities acquired on or after 1 July 2024. It sets:

Seller	Rate on gain
On the Active Taxpayers’ List on the date of acquisition and the date of disposal	15%
Individual or AOP not on the list on both dates	Division I rates, and “not less than 15% in any case”
Company not on the list on both dates	Division II rate
Future commodity contracts on Pakistan Mercantile Exchange	5%

Shares bought before 1 July 2024 are taxed under column (3) and the provisos, which depend on when you bought and how long you held. That table is on the holding-period page.

How does it work in practice?

Section 100B says capital gains on listed securities and the tax on them, subject to section 37A, “shall be computed, determined, collected and deposited in accordance with the rules laid down in the Eighth Schedule.” For most retail investors this is handled through the National Clearing Company of Pakistan Limited (NCCPL), which the Ordinance names in section 37A. The mechanics are covered on the NCCPL page.

Section 37A does not apply in two share cases named in its second proviso. Shares of a listed company sold “otherwise than through registered stock exchange” and not settled through NCCPL, and shares disposed of through an initial public offer unless details are given to NCCPL, fall under section 37 instead. The first proviso excludes banking companies and insurance companies from section 37A altogether.

Worked example (illustrative figures)

Bilal, a software developer in Karachi, is on the Active Taxpayers’ List throughout.

• 10 August 2025: buys 1,000 shares at Rs. 250. Cost of acquisition (B) = Rs. 250,000.
• 5 March 2027: sells all 1,000 shares at Rs. 320. Consideration (A) = Rs. 320,000.
• Gain = A minus B = Rs. 320,000 minus Rs. 250,000 = Rs. 70,000.
• The shares were bought after 1 July 2024, so column (4) applies: Rs. 70,000 x 15% = Rs. 10,500.

In the same tax year Bilal sells another company’s shares at a loss of Rs. 20,000. Section 37A(5) lets that loss be set off against his gain from other securities: Rs. 70,000 minus Rs. 20,000 = Rs. 50,000, and Rs. 50,000 x 15% = Rs. 7,500.

What if I make a loss overall?

Section 37A(5) allows a loss on securities to be set off “only against the gain of the person from any other securities chargeable to tax under this section”. Under its proviso, an unabsorbed loss from tax year 2019 onwards may be carried forward, but only against future securities gains and for no more than three tax years. The set-off page covers this in detail.

Common mistakes

• Taxing the full sale price. Tax falls on A minus B, the gain, not on the consideration received.
• Adding the gain to salary. Section 37A(4) keeps it as a separate block.
• Assuming 15% on every share. The flat 15% in column (4) is only for securities acquired on or after 1 July 2024 and only for persons on the list on both dates.
• Setting off share losses against business income. Section 37A(5) confines them to securities gains.

What to check in the official text

Read section 37A, section 100B and Division VII of Part I of the First Schedule in the official PDF. The Division VII table in the consolidated PDF is laid out in columns that are hard to follow, so read columns (3) and (4) carefully. Division I and Division II rates, and the Eighth Schedule computation rules, are separate parts of the First and Eighth Schedules.