Regarding Rule 13N, Rule 19H of Income Tax Rules, 2002

Government of Pakistan Revenue Division Federal Board of Revenue ,<***rr Notification (Income Tax) Islamabad, the 31't May, 2023 S.R.O. 640(l)t2023.- The following draft of certain further amendments in the Income Tax Rules, 2002, which the Federal Board of Revenue proposes to 237 of themake in exercise of the powers conferred by sub-section (l) of section published for informationIncome Tax Ordinance, 2OOl (XLX of 2001), is hereby of all persons likely to be affected thereby and, as required under sub-section (3) of the said section 237, notice is hereby given that objections or suggestions thereon, if any, may for consideration of the Federal Board of Revenue be sent within seven days of publication of the draft in the official Gazetle. Any objection or suggestion thewhich may be received in respect of the said draft, before the expiry of aforesaid period, shall be considered by the Federal Board of Revenue, namely:- Dralt Amendments ln the aforesaid rules,- (3A), after the expression "Notwithstanding (l) in rule 13N, in sub-rule the" the expression "provisions of the second proviso to sub-section (1) of section 37 A and" shall be inserted; (2) in rule 19H, - (i) in sub-rule (1),-

the (a) after the word "of', occurring for the first time, expression "sub-section (7) of section 37 and" shall be inserted; be omitted; (b) in clause (b), the word "and" shall the end the expression "; (.) in clause (c), for the full stop at and" shall be substituted; and new (d) after clause (c) amended as aforesaid, the following clause shall be added, namely: - "(d) fair market value of shares for the pulposes of sub- section (7) of section 37."; added,(3) after sub-rule (6), the following new sub-rules shall be namely: - "(7) For the purpose of determining fair market value of shares under sub-section (7) of section 37, component D in the formula in clause (c) of sub-rule (2) shall be taken as zero. or (8) State Bank of Pakistan shall not allow transfer registration of repatriable shares unless prescribed certificate from sub- the Commissioner, to the effect that the tax liability under sections (6) to (10) of section 37 is discharged, is provided by the person selling the shares."; as aforesaid, the following new rule shall be(4) after rule 19H, amended inserted, namely: - *lgl. applies for the Application of this rule. - (1) This rule purposes of second proviso to sub-section (1) of section 371t.

(2) Section 37A shall not apply to the disposal of shares of listed companies otherwise than through registered stock exchange and which are not settled through NCCPL. (3) For the purposes of second proviso to sub-section (1) of section 37 A, "shares of a listed company" shall not include units of a mutual fund or collective investment scheme or a REIT scheme or derivative products and provisions of section 37 A shall remain applicable on disposal of such units, schemes or products. Explanation. - It is clarified that the provisions of section 37A shall remain applicable on transactions of shares of listed companies as recorded in the system of NCCPL and reported in accordance with Eighth Schedule of the Income Tax Ordinance 2001.". 1 (1 13)R&5/20201[F.No. <r^J,lrt Ln( Secretary (Law and Clarification)