Trading on the Pakistan Stock Exchange looks tax-free on the surface because both major taxes — capital gains tax and dividend withholding — are deducted automatically before the money reaches you. That doesn't remove your filing obligation, though. Every PSX investor still has to declare their portfolio, gains, and dividends in the annual FBR return, and skipping that step is one of the most common mistakes active traders make.
Capital Gains Tax — Rates Depend on Holding Period
NCCPL calculates and deducts CGT automatically at settlement, using a sliding scale based on how long you held the shares before selling:
- Held under 12 months: 15% for filers, 20% for non-filers
- Held 12 to 24 months: 12.5% for filers, 20% for non-filers
- Held over 24 months: exempt for everyone
The amount NCCPL deducts is not a final cost you simply absorb — it shows up in your IRIS profile as an advance tax credit, which reduces what you owe when you file your annual return.
Dividend Income — A Final Tax for Filers
Dividends work differently. Companies deduct withholding tax before paying shareholders — 15% for active filers, 30% for non-filers — and for filers this is final: no further liability arises regardless of total income. It still needs to be declared as income from other sources, just without adding to your taxable slab.
Getting Your Annual Statement
NCCPL issues an Annual CGT Statement through its investor portal, accessible with your CNIC and registered mobile number, showing every deduction made during the tax year. It's worth cross-checking this against the Pre-filled Tax Information section on IRIS, since NCCPL data is usually already loaded there but discrepancies do occur and can delay processing.
Don't Forget the Wealth Statement
Even if you never sold a single share all year, your portfolio's market value as of 30 June still belongs in your wealth statement. Buying a large volume of new shares without a documented income source to match is one of the fastest ways to trigger an FBR inquiry under Section 111 — the reconciliation formula simply doesn't allow unexplained jumps in holdings.
Losses Can Be Carried Forward — If You File
A capital loss on listed securities can be carried forward for up to six tax years, but only against future gains from the same asset class — never against salary or business income. Crucially, the carry-forward only activates if you declare the loss in the return for the year it happened; skip filing in a loss year and that window closes permanently.