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Carry forward capital losses on stocks disposal

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ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday allowed investors of Pakistan Stock Exchange (PSX) to carry forward capital losses for calculation of capital gain tax.
In this regard, the FBR has issued SRO 801(I)/2021 to make amendments to the Income Tax Rules, 2002. The FBR previously issued draft rules through SRO 639(I)/2021 dated June 01, 2021 for seeking feedback from stakeholders.
As per the SRO a substitution in sub-rule (3) of Rule 13D of the Income Tax Rules, 2002 has been made. According to the amendment: “(3) Capital loss arising on disposal of listed securities in tax year 2019 and onwards that has not been set off against the gain of the person from disposal of listed securities chargeable to tax during the tax year shall
be carried forward to the following tax year and set off only against the gain of the person from disposal of listed securities chargeable to tax but no such loss shall be carried forward to more than three tax years immediately succeeding the tax year for which the loss was first determined.”
In Rule 13N, the substitution in sub-rule (7), as: “(7) Capital loss arising on disposal of listed securities in tax year 2019 and onwards that has not been set off against the gain of the person from disposal of listed securities chargeable to tax during the tax year shall be carried forward to the following tax year and set off only against the gain of the person from disposal of listed securities chargeable to tax but no such loss shall be carried forward to more than three tax years immediately succeeding the tax year for which the loss was first determined.”
A new sub-rule after the sub-rule 7 has been inserted, which is: “(7A) Capital loss arising on disposal of listed securities in tax year 2019 and onward shall be carried forward to a subsequent tax year for setting off, in the manner prescribed as follow: – TLTP