Capital Gains Tax Pakistan 2026 - Property, Shares & Securities

Capital gains tax (CGT) in Pakistan applies to profit earned from selling property, shares, and other assets. The rate depends on how long you held the asset. This complete guide covers CGT rates, exemptions, and how to report capital gains in your FBR income tax return for 2026.

What is Capital Gains Tax in Pakistan?

Capital gains tax is levied under Section 37 (immovable property) and Section 37A (securities) of the Income Tax Ordinance 2001. It applies to the profit — sale price minus cost price — when you sell an asset. The key factor is the holding period: assets held longer are taxed at lower rates to discourage speculation and encourage long-term investment.

Capital Gains Tax Rates on Property (Section 37) — 2026

Holding Period	CGT Rate (Open Plot)	CGT Rate (Constructed Property)
Less than 1 year	15%	15%
1 to 2 years	12.5%	10%
2 to 3 years	10%	7.5%
3 to 4 years	7.5%	5%
4 to 5 years	5%	0%
5 to 6 years	2.5%	0%
More than 6 years	0%	0%

Good news for long-term holders: If you sell a constructed property after 4 years or a plot after 6 years, no CGT is payable. This is one reason why long-term real estate investment in Pakistan carries lower tax burden.

How is Property CGT Calculated?

The capital gain is calculated as:

Capital Gain = Sale Price (or FBR value, whichever higher) − Cost Price (or FBR value at purchase, whichever higher)

Example: You bought a plot in 2023 for Rs. 40 lakh (FBR DC value: Rs. 35 lakh). You sell it in 2025 for Rs. 70 lakh (FBR value: Rs. 65 lakh). Holding period: 2 years.

Sale price for CGT: Rs. 70 lakh (higher of Rs. 70 lakh and Rs. 65 lakh)
Cost for CGT: Rs. 40 lakh (higher of Rs. 40 lakh and Rs. 35 lakh)
Capital gain: Rs. 30 lakh
CGT rate (2–3 years, open plot): 10%
CGT payable: Rs. 3 lakh

Capital Gains Tax on Shares and Securities (Section 37A) — 2026

Security Type	Holding Period	CGT Rate
Listed company shares (PSX)	Less than 1 year	15%
Listed company shares (PSX)	1 to 2 years	12.5%
Listed company shares (PSX)	More than 2 years	0%
Mutual fund units (equity)	Less than 1 year	15%
Mutual fund units (equity)	More than 1 year	0%
Unlisted company shares	Any period	10%
Government securities, NSCs, DSCs	Any period	0% (profit is WHT under Sec 151)

CGT on Sale of Property — Important Rules

First property exemption: If you are selling your first-ever property that was self-constructed or self-purchased and you lived in it, you may qualify for principal residence exemption under Section 37(5)
FBR notified values: FBR publishes DC (Deputy Commissioner) rates for all areas. If your sale price is lower than the FBR value, the FBR value is used for CGT — so you cannot undervalue a sale to avoid CGT
WHT at time of sale: Section 236C requires the buyer to withhold tax at source. Filers: 3%, Non-filers: 6%. This WHT is adjustable against final CGT liability
Reporting in return: CGT must be declared in Schedule II of your income tax return, even if WHT was already deducted

CGT Exemptions in Pakistan 2026

Property held for more than 6 years (open plot) or 4 years (constructed) — fully exempt
PSX listed shares held more than 2 years — exempt
Equity mutual fund units held more than 1 year — exempt
Sale of shares in your own company on dissolution — may be exempt if reinvested
Agricultural land — CGT does not apply to agricultural land

Frequently Asked Questions

Do I have to pay CGT if I sell property at a loss?

No. CGT only applies to gains (profit). If you sell at a loss, there is no CGT payable. However, you should still declare the transaction in your wealth statement and return to avoid FBR questions about the sale.

What if I sell property below FBR DC value?

FBR uses the higher of the actual sale price or the FBR notified DC value for CGT calculation. Selling below DC value does not reduce your CGT — FBR will use the DC value as the deemed sale price.

Is CGT on property the same as the stamp duty / CVT?

No. CGT (Section 37) is income tax on your profit. Stamp duty is a provincial tax on the transfer document. Capital Value Tax (CVT) is a federal tax at 2% on the buyer's side for certain properties. All three may apply to the same transaction.

If WHT was deducted at 3% on my property sale, do I still owe more CGT?

Possibly. The 3% WHT under Section 236C is adjustable against your final CGT liability. Calculate your actual CGT using the correct rate for your holding period. If your CGT rate is higher than 3%, you owe the difference. If lower or zero (held 6+ years), you can claim a refund of the 3% WHT.

Sold Property or Shares? Get Your CGT Filed Correctly

Kamboh Associates calculates and files capital gains tax for property and share transactions. Avoid FBR notices — get your CGT right the first time.

WhatsApp Now — 0328-4675162