Amendment in Taxation of Capital gains Section 37

Amendment in Taxation of Capital gains Section 37: Finance Act, 2024 — Explanation regarding Important Amendments made in the Income Tax Ordinance, 2001

Important amendments made in Income Tax Ordinance, 2001 (“the Ordinance”) through Finance Act, 2024 are explained in the subsequent paragraphs.

Prior to the Finance Act, 2024, a person acquiring shares of a company was required to deduct tax at the rate of ten percent of the fair market value of shares from the gross amount paid. Through the Finance Act, 2024, the person acquiring the shares is required to deduct tax from the gross amount paid or payable at the time of payment or at the time of registration of shares, whichever is earlier.

Hence, 10% of the fair market value of shares will be deposited by the acquirer even if payment for shares has not been made, if the shares stand registered in the name of the acquirer of shares.

Read full text of Explanation of Finance Act, 2024 Amendments made in the Income Tax Ordinance, 2001 for more updates on taxes from FBR click here.