How are government securities, PSX shares and dividends bought through my FCVA or NRVA taxed?

Investments made from a Foreign Currency Value Account (FCVA), Foreign Currency Business Value Account (FCBVA), Non-Resident Rupee Value Account (NRVA) or Non-Resident Rupee Business Value Account (NRBVA) are taxed under different provisions depending on what you hold. Government securities and certificates have their own bank deduction. Dividends follow the general dividend rule. Share gains follow the securities rule. This page reads the Income Tax Ordinance, 2001 as amended to 30 June 2026, which governs tax year 2027 (1 July 2026 to 30 June 2027).

What does the law say about government securities and certificates?

Section 152(1DA), as substituted by the Finance Act, 2026, requires every banking company maintaining an FCVA, FCBVA, NRVA or NRBVA to deduct tax from capital gain on the disposal of “debt instruments and Government securities and certificates (including Shariah compliant variant)” invested through those accounts.

The rate is in paragraph (3A) of Division II of Part III of the First Schedule: 10% of the amount of capital gain.

Section 152(1E) says the tax deductible under sub-section (1DA) “shall be a final tax in respect of persons and income mentioned therein”. So once the bank deducts 10% of the gain, no further tax is due on it.

The sub-section names no product. Treasury bills, Pakistan Investment Bonds, sukuk or certificates sold under a brand name are covered only where they fit the words “debt instruments”, “Government securities” or “certificates” and were invested through one of the four accounts.

How are dividends taxed?

Section 150 requires every person paying a dividend to deduct tax from the gross amount at the rate in Division I of Part III of the First Schedule. Section 152(3)(a) keeps dividends out of the general 20% non-resident rule in section 152(2). The Division I rates include:

Division I paragraph	Case	Rate
(a)	Dividend from Independent Power Producers that is a pass-through item reimbursed by CPPA-G	7.5%
(b)	REITs and cases not covered by (a), (ba), (c) and (d)	15%
(ba)	Mutual funds, by share of income from debt securities and from equities	25% and 15%
(d)	Dividend from a company that pays no tax because of exemption, carried forward losses or tax credits	25%

Clause (111A) of Part IV of the Second Schedule says the provisions for persons not on the Active Taxpayers List, including rule 1 of the Tenth Schedule, do not apply “to the extent of payment of dividend to non-resident persons”. So a non-resident’s dividend is not deducted at an increased non-filer rate.

How are gains on PSX shares taxed?

Section 37A charges capital gain on disposal of securities, which includes shares of a public company and units of exchange traded funds, at the rates in Division VII of Part I of the First Schedule. That table sets rates by holding period, acquisition date and whether the person appears on the Active Taxpayers List. Section 152(1DA) does not cover share gains, because it is limited to debt instruments, government securities and certificates. This page does not reproduce the Division VII table; read it in the official PDF.

Do I have to register or file?

Clause (114A) of Part IV says the registration requirement and the filing trigger for final-tax income do not apply to a person maintaining an FCVA, FCBVA, NRVA or NRBVA, provided the person has no Pakistan-source taxable income other than:

• (a) profit on debt on those accounts;
• (b) profit on debt on Government of Pakistan securities bought from their proceeds;
• (c) capital gain on immovable property acquired from FCVA or NRVA proceeds;
• (d) capital gain on PSX securities and mutual fund units bought from the accounts;
• (e) dividends from PSX securities and mutual funds bought from the accounts.

Worked example (illustrative figures)

Nadia lives in Doha and holds an NRVA with a bank in Islamabad. In tax year 2027:

1. She sells Pakistan Investment Bonds bought through the NRVA at a capital gain of Rs. 400,000. The bank deducts 400,000 x 10% = Rs. 40,000 under section 152(1DA). Under section 152(1E) this is final.
2. She receives a dividend of Rs. 200,000 from a listed cement company whose case falls under paragraph (b) of Division I. The company deducts 200,000 x 15% = Rs. 30,000 under section 150. Clause (111A) means this is not increased because she is not on the Active Taxpayers List.
3. Total tax deducted: 40,000 + 30,000 = Rs. 70,000.
4. Both items are on the clause (114A) list. If she has no other Pakistani income, she is outside the registration and final-tax filing requirements.

Common mistakes

• Treating every product sold to overseas Pakistanis as a “certificate”. Section 152(1DA) applies only to what its words cover.
• Expecting the 10% to apply to share gains. PSX gains are under section 37A and its own table.
• Assuming the dividend rate is always 15%. Paragraphs (a), (ba), (c) and (d) of Division I set different rates.

What to check in the official text

Read section 152(1DA), (1E) and (3), section 150, Division I and paragraph (3A) of Division II of Part III, Division VII of Part I, and clauses (111A) and (114A) of Part IV of the Second Schedule. The terms of issue of any certificate, and State Bank rules on these accounts, are outside this corpus.