capital gain tax-cgt system presentation nccpl 1

Capital Gain Tax-CGT System

Presentation

NCCPL

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Overview and Overview and Procedures of the Procedures of the New CGT RegimeNew CGT Regime

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Following are the Persons/Investors to which new CGT Regime will be applicable:

Individual Investors; Brokers; and Corporate Entities.

However, following Persons/Investors will NOT be covered under new CGT Regime:• Mutual fund;• Banking Company;• Non-Banking Finance Company;• Insurance Company; • Modaraba; • ‘Foreign Institutional Investor’ being a person registered with NCCPL as a foreign

institutional investor; and • any person or class of persons as notified by the FBR.

Overview and Procedures of the New CGT Overview and Procedures of the New CGT RegimeRegime

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Any Person/Investor may Opt-Out from the new CGT Regime.

For Opting-Out, Person/Investor shall be required to file an Irrevocable Option to NCCPL after obtaining prior approval of the Income Tax Commissioner.

New CGT Regime will NOT be applied on such Person/Investor who Opted-Out.


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Principles of Holding Period of Inventory Before the Promulgationof New CGT Regime


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S.NO. Holding Period Inventory Age Price 1. Securities Balance As-

Of 23rd April 2011More than One Year Closing Price of

23rd April 2011

2. Securities have been Acquired or Disposed off Between 24th April 2011 to 23rd April 2012.

Determined as per the Actual Acquisition and Disposal

Market-Based Transactions- Transaction Price Non-Market-Based Transactions- Deal Price or Closing Price, as the case may be.

Principles for Physical Securities Deposited into CDS


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S.NO. Deposit of Physical Securities

Inventory Age Price

1. Physical Securities have been deposited in CDS Between 24th April 2011 to 23rd April 2012

The Date of Acquisition shall be Deemed as 23rd April 2011

Closing Price of 23rd April 2011

2. Physical Securities have been deposited in CDS on or after 24th April 2012

Actual Date of Acquisition as Communicated by CDS. But it should not be Earlier than 23rd April 2011.

Prevailing Closing Price of the Deposited Date.

Types of Transactions Covered under New CGT Regime:

Marekt Based Transactions

Sale and Purchase Transactions including Day-Trading Executed or to be Executed on the Trading Platform of the Stock Exchange.

Non-Market Transactions

Movement of Securities Through Free-Delivery (FD) Mechanism of CDS.


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General Principles for the Determination andComputation of CGT

CGT will be Determined and Computed on the Transactions and their Values as Reported to or Provided to or Extracted from the Systems of Stock Exchange, Central Depository Company of Pakistan Limited and NCCPL.

First In First Out (FIFO) Inventory Accounting Method will be used.

In Determination and Computation of CGT, First Priority shall be given to the Market Based Transactions.

Capital Loss in any Financial Year Shall be Set Off against Capital Gain of that Financial Year.

Capital Loss in any Financial Year Shall NOT be Carried to a Subsequent Financial Year.


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Fixed Cost of 0.50% on non-proprietary trades and 0.25% on proprietary trades on Disposal or Acquisition of Securities, as the case may be, in lieu of all Expenses will be Deducted or Added while Determination and Computation of CGT.

However, such Fixed Cost shall only be allowed in respect of Market Based Transactions.

Financing Cost Incurred through NCCPL’s Leveraged Market Products shall be Taken into Account while Computing Capital Gains.

CGT shall be Collected on Monthly Basis for Transactions Settled in a Month, after Adjustment of Losses or Refund of amount collected of the Previous Month or Months of the Same Financial Year.


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CGT shall be Collected From or Through the Respective Clearing Members on Net Capital Gains of Persons/Investors.

Any Person/Investor, if Not Satisfied with the Computation of Capital Gain or Tax thereon or both made by NCCPL, such Person/Investor may Re-Compute the Capital Gain and Lodge Claim of Refund, if any, with the Commissioner of FBR.


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The Amount Collected by NCCPL, in respect of Capital Gains, on behalf of the FBR, Shall be Deposited in a Separate Bank Account with National Bank of Pakistan and such Amount Shall be Paid to the FBR Alongwith Interest Accrued Thereon on Yearly Basis by July 31.

In Case of Non-Recovery of CGT from any Person/Investor through its Clearing Member, for any reason whatsoever, NCCPL Shall Refer a Particular Case for Recovery of CGT to the FBR.

Defaulted Person/Investor may also be Restricted from Taking New Positions in all Markets for a Period of Three Months and such Restriction will be Continued till the Recovery of Amount of CGT.


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The Short or Non-Collection of CGT in any Month During the Financial Year shall Continue to Appear in the CGT Liability of Coming Month or Months of the Same Financial Year.

Brokerage Account of the Persons/Investors shall NOT be Closed Until and Unless such Persons/Investors Obtains a Clearance Certificate from NCCPL.


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Following Certificate / Statement Shall be Issued and Provided by NCCPL: Annual Certificate Showing Computation of Capital Gains and Tax

thereon, if any, to each Eligible Person/Investor within Thirty Days from the End of the Financial Year.

Quarterly Statement of Amount Collected from Eligible Persons/Investors shall be Furnished to the FBR within Thirty Days from the End of Each Quarter.

Every Person/Investor Shall also File the Annual Certificate, as provided by NCCPL, Alongwith the Return of Income.


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CGT System ReportsCGT System Reports

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Following CGT Reports have been made available in CGT System: CGT Gain/(Loss)Detail

CGT Inventory Slab wise Inventory Balance Report;

Date wise Inventory Detail Report; and

Inventory Balance Detail Report

CGT Consolidated Summery CGT Consolidated Sum CGT Gain/Loss Non Inventory

CGT Gain/(Loss) Summery

CGT System Reports CGT System Reports

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CGT Consolidated Summery Report (NET CGT OBLIGATION)

1. This Report Contains ALL INFORMATION OF ENITRE CGT:

Current Month CGT Position Previous Month CGT Position As of Reporting Month CGT Position Previous Month Non-Payment and Allocation Final As of Reporting Month CGT Position


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CGT Consolidated Summery Report Type

2. CGT Gain/Loss Non Inventory

This Report represents the Gain/Loss and CGT for Square-up Transactions of Various Market:

Market-wise Capital Gain/(Loss) Total Gain/(Loss) Total CGT


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CGT Gain/(Loss)Detail Report

This Report represents the following out-going information of Sales/Disposal with Number of Days:

Symbol Taxable and Non-Taxable Quantity Capital Gain/(Loss) Number of Days CGT Slab CGT


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CGT Gain/(Loss) Summary (out-going)

This Report represents the following Detailed Out-going information:

Symbol Total Out-going Inventory (Taxable and Non-Taxable Quantity) Capital Gain/(Loss) Number of Days CGT Slab Percentage CGT


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CGT Inventory Report Report Type

1. Slab wise Inventory Balance Report

This Report represents the following Balance information of Purchase/Acquisition:

Symbol Applicable Slab Rate of Inventory Total Volume


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2. Date wise Inventory Detail Report

This Report represents the following in-coming information of Purchase/Acquisition :

Symbol Market Based Inventory Non-Market Based Inventory Total Volume Adjustment of Expenses Net Purchase Value and Price


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3. Inventory Balance Detail Report

This Report represents the following Date-wise Balance information of Purchase/Acquisition :

Symbol Available Quantity in Inventory Price Shares Value


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Thank Thank youyou !

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capital gain tax-cgt system presentation nccpl 1

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