Capital Gains Tax Pakistan — CGT Guide for Property, Shares and Mutual Funds
In Pakistan, if you sold property, sold shares or redeemed mutual funds and made a profit, Capital Gains Tax (CGT) applies to it. Many people do not know about this tax, and mistakes happen when filing the return. This guide sets out the full calculation of capital gains tax in Pakistan — for property, shares and mutual funds.
1. What Is Capital Gains Tax?
When you buy an asset (property, shares, bonds) and later sell it for more, the difference (gain) is taxed — this is called Capital Gains Tax. It applies under Sections 37 and 37A of the Income Tax Ordinance 2001.
Formula: Capital Gain = Selling Price − Purchase Price − Expenses (stamp duty, agent fee, renovation cost etc.)
2. Capital Gains Tax on Property — Holding Period Rates
The property CGT rate depends on two things: when the property was acquired, and what type it is. The CGT rate is the same for filers and non-filers — filer status changes only the withholding tax deducted on the sale, not CGT.
| Holding Period | Open plot | Constructed property | Flat |
|---|---|---|---|
| Under 1 year | 15% | 15% | 15% |
| 1 – 2 years | 12.5% | 10% | 7.5% |
| 2 – 3 years | 10% | 7.5% | 0% |
| 3 – 4 years | 7.5% | 5% | 0% |
| 4 – 5 years | 5% | 0% | 0% |
| 5 – 6 years | 2.5% | 0% | 0% |
| Over 6 years | 0% | 0% | 0% |
This table applies only to property acquired on or before 30 June 2024 — columns (3), (4) and (5) of Division VIII. The three property types have different ladders: a flat reaches 0% after 2 years, constructed property after 4 years, and an open plot after 6 years. Once a column reaches 0%, it stays at 0% from then on.
Property acquired on or after 1 July 2024 — the holding period does not matter at all
Column (6) of Division VIII is different: if the property was acquired on or after 1 July 2024, the rate is 15% for a person on the Active Taxpayers’ List on the date of disposal — whether the property was held for 1 year or 10. For someone not on the ATL, the normal rates of Division I (individuals and AOPs) or Division II (companies) apply, and the statute says that for individuals and AOPs the rate cannot be less than 15% of the gain — so this is a minimum, not the final figure.
3. Property CGT — Real Example
Suppose you bought an open plot for Rs. 5,000,000 in 2022 and sold it for Rs. 8,000,000 in 2025. Because it was bought before 1 July 2024, the holding-period ladder applies — and the open plot column:
| Calculation | Amount |
|---|---|
| Selling Price | Rs. 8,000,000 |
| Purchase Price | Rs. 5,000,000 |
| Capital Gain | Rs. 3,000,000 |
| Holding Period | 3 years (CGT: 7.5%) |
| CGT Payable | Rs. 225,000 |
Had you held the same open plot for more than 6 years before selling, CGT would be zero. Constructed property would reach zero after just 4 years, and a flat after 2. But had the plot been bought on or after 1 July 2024, the rate would be 15% even at 3 years — Rs. 450,000. For the other property tax calculations, use our Property Tax Calculator.
4. Capital Gains Tax on Shares
CGT on gains from listed shares and other securities applies under Section 37A, and the rates come from Division VII of the First Schedule. As with property, the first question is when the security was acquired:
| Holding Period | Acquired between 1 July 2022 – 30 June 2024 | Acquired on or after 1 July 2024 |
|---|---|---|
| Up to 1 year | 15% | 15% flat — the holding period does not matter (for people on the ATL; see below) |
| 1 – 2 years | 12.5% | |
| 2 – 3 years | 10% | |
| 3 – 4 years | 7.5% | |
| 4 – 5 years | 5% | |
| 5 – 6 years | 2.5% | |
| Over 6 years | 0% |
- 12.5% on securities acquired between 1 July 2013 and 30 June 2022, and 0% on those acquired before 1 July 2013.
- The post-1 July 2024 rate of 15% is only for a person on the Active Taxpayers' List on both the purchase and sale dates. Otherwise individuals and AOPs pay the normal Division I rates — and the statute says these cannot be less than 15%.
- A company's debt securities pay the Division II rates; future commodity contracts on the Pakistan Mercantile Exchange pay 5%.
Note: for shares on the PSX, the broker collects CGT automatically and sends it to FBR. You do not pay it separately — but you must still declare it in your return.
One Finance Act 2026 change: Rule 10(y) of the Tenth Schedule, which kept Section 37A collection on securities acquired after 1 July 2025 outside that Schedule, has been omitted. We have not yet settled what this means for a non-filer's actual rate — so we are not publishing a separate non-filer figure.
5. CGT on Mutual Funds
When units of a mutual fund, collective investment scheme or REIT scheme are redeemed, the scheme itself charges and deducts CGT. The Division VII rates are:
| Who | Stock funds | Other funds |
|---|---|---|
| Individual and AOP | 15% | 15% |
| Company | 15% | 25% |
- If a stock fund's dividend receipts are less than its capital gains, the deduction rate is 15%.
- No CGT is deducted on units acquired on or before 30 June 2024 and held for more than 6 years. Units acquired after that do not get this relief.
6. How to Declare CGT in Your Return
- Log in to IRIS and open the annual return.
- Go to the Capital Gains section — property, shares and mutual funds are declared separately there.
- Enter the purchase date, sale date and prices accurately — the holding period is calculated automatically.
- Deduct expenses: stamp duty, agent commission and renovation cost can all be subtracted from the gain.
- Show CGT already deducted: if WHT has already been deducted on the property transaction, it is adjusted.
Important: not declaring CGT can trigger an FBR audit — especially property transactions recorded with the registrar. FBR receives this data automatically.
7. Legal Ways to Reduce CGT
Legal CGT Saving Tips
- ✅ Holding benefit on older property: an open plot bought before 1 July 2024 is free of CGT after 6 years, constructed property after 4 years, and a flat after 2 years — not so for property bought after that
- ✅ Stay on the ATL: the 15% rate on shares bought after 1 July 2024 is only for people on the ATL at both purchase and sale; others pay slab rates that are never below 15%
- ✅ Keep expense records: keep every renovation and stamp duty receipt
- ✅ The holding benefit applies only to older holdings: on securities bought up to 30 June 2024 the rate falls over time; on those bought after that it is a flat 15%
- ✅ Keep a record of losses: capital losses have their own set-off rules — confirm with a practitioner before filing your return
8. FAQ — Capital Gains Tax Pakistan
How much is capital gains tax on property in Pakistan?
It depends on when the property was acquired. If it was acquired on or after 1 July 2024, the holding period does not matter at all: the rate is a flat 15% for a person on the Active Taxpayers List on the date of disposal; for anyone else the Division I or II rates apply, but for individuals and AOPs the statute sets a floor — not less than 15% of the gain. If it was acquired on or before 30 June 2024, the rate falls with the holding period, and there are three separate ladders by property type. Source: First Schedule Part I Division VIII, to which Section 37(1A) points.
Does CGT apply to plots too, or only to constructed property?
It applies to both, but the ladder is not the same. Division VIII has three separate columns for open plots, constructed property and flats. For example, at 2 to 3 years an open plot is 10%, constructed property 7.5%, and a flat 0%. The time to reach zero also differs: a flat after 2 years, constructed property after 4 years, and an open plot after 6 years. All of this is for property acquired before 1 July 2024 — for property acquired after that, the rate is a flat 15% and neither the property type nor the holding period makes a difference.
Does CGT apply when I sell my own home?
Division VIII makes no distinction between your own home and an investment property — the rate comes from the holding period and property type, not from whether you lived there. It is often said that a primary residence becomes exempt after six years; we have not found any statutory basis for this in Division VIII and make no claim about it. If you want to claim an exemption on the sale of your home, first have your tax practitioner confirm the exact provision.
How is CGT calculated on a property sale?
CGT = (sale price minus purchase price) x rate. The purchase price can include the documented cost of improvements. FBR works on its own valuation or the actual sale price — whichever is higher. The rate comes from Division VIII: the acquisition date first, then the property type and holding period.
Is CGT different for filers and non-filers?
The CGT rate itself is the same for both — Division VIII does not look at filer status (only the column for property acquired after 1 July 2024 looks at being on the ATL). What changes is the withholding tax deducted at the time of sale: under Section 236C, 2.75% for a filer and 11.5% for a non-filer. That deduction is advance tax and is adjusted in the return; whether it is adjustable is decided by the section, not by being a filer or non-filer.
What about CGT on property received as a gift?
CGT on a gifted property arises when you sell it. The date from which the holding period runs — the gift date or the original purchase — depends on the documentation, so confirm it with your practitioner.
Do overseas Pakistanis have to pay CGT too?
Yes. Overseas Pakistanis selling property located in Pakistan are also within the scope of CGT. The CGT rate does not change with ATL status, but the Section 236C withholding deducted on the sale does — so being on the ATL helps. The exception is a non-resident holding a NICOP or Pakistan Origin Card: under clause (111AC) of the Second Schedule they pay the filer rate of 2.75% whether or not they are on the ATL.
Is there capital gains tax on shares too?
Yes. CGT on gains from listed shares applies under Section 37A, and the rate comes from Division VII of the First Schedule. On shares acquired on or after 1 July 2024, the rate is a flat 15% for a person on the Active Taxpayers List on both the purchase and sale dates — the holding period makes no difference; other individuals pay the normal slab rates, which cannot be less than 15%. On shares acquired between 1 July 2022 and 30 June 2024, the rate starts at 15% and falls to 0% after 6 years. For an individual, mutual fund units are at 15%.
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