Adjustment of carry forward capital losses to be made on ATL basis: NCCPL

Shahnawaz AkhterWeb Editor

06th Jul, 2021. 04:07 pm
NCCPL

KARACHI: The National Clearing Company of Pakistan Limited (NCCPL) on Tuesday said that the adjustment of carry forward capital losses will be made on the basis of investors’ name on the Active Taxpayers List (ATL).

In an information to stockbrokers and market participants, the NCCPL said that the computation of the capital gains tax (CGT) for the period July 1, 2020 to May 31, 2021 was finalised as per the amendments made to the Income Tax Rules, 2002 notified by the Federal Board of Revenue (FBR) through an SRO 801(1)/2021 dated June 24, 2021.

These amendments relate to the manner of adjustment of prior year’s carry forward capital losses (tax year 2019 and onwards) on the disposal of securities and the conditions are applicable thereto.

For clarity, the net capital gain of the current tax year will be adjusted against unadjusted carried forward capital loss for the tax years 2019 and 2020 in all markets, i.e., Pakistan Stock Exchange (PSX), Mutual Funds Association of Pakistan (MUFAP) and Pakistan Mercantile Exchange (PMEX) on first-in-first-out basis.

However, the adjustment of the prior year’s capital losses is subject to availability of the taxpayers’ name in the ATL provided by the revenue board to NCCPL for the purpose of allowing such adjustment.

The aggregate amount of the capital gains tax arising on the disposal of shares at the Pakistan Stock Exchange for the period July 1, 2020 to May 31, 2021, would be collected on Friday, July 16, 2021 through respective settling banks of the clearing members.

The NCCPL has advised all the clearing members to ensure requisite amount in their respective settling bank’s account.

Further, the aggregate amount of the capital gains tax arising on the trading of future commodity contracts at Pakistan Mercantile Exchange for the period July 1, 2020 to May 31, 2021, would also be collected on Friday, July 16, 2021.

Moreover, the aggregate amount of the capital gains tax arising on the redemption of units of open-end mutual funds have also been finalised for the period July 1, 2020 to May 31, 2021.

The NCCPL also advised the clearing members and Pakistan Mercantile Exchange to verify the investor-wise details of the capital gain or loss and tax, thereon, if any, through reports/downloads.

“In case of none or partial collection of CGT, necessary action would be taken in accordance with the rules and regulations,” the NCCPL added.

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