Section 37A — Capital Gains Tax on Listed Securities
Section 37A capital gains tax on PSX listed securities Pakistan TY 2025-26 — 15% flat (post-Jul-2024 filers), holding-period rates for older acquisitions.
Section 37A taxes capital gains on listed securities (PSX-traded shares, modarabas, vouchers). Three regimes apply by acquisition date. Securities acquired on or after 1 July 2024 (Finance Act 2024): filers pay 15% flat irrespective of holding period; non-filers pay the higher of 15% or their marginal slab rate. Securities acquired 1 July 2013 to 30 June 2024: holding-period schedule from the Eighth Schedule (15% → 0% over six years). Pre-July-2013 acquisitions: exempt.
The 2024 reform simplified an extremely complex prior regime. Before Finance Act 2024, every investor needed to track acquisition dates carefully because gains were taxed at different rates depending on which side of the date boundaries each parcel fell. The new flat 15% on post-2024 acquisitions removes that complexity for new investors but preserves the legacy rates for existing portfolios.
Brokers and CDC deduct Section 37A at source on every realised gain; you receive a year-end CGT certificate from your broker showing total deductions. Declare gains and the WHT credit on your IRIS return. Losses can be carried forward up to six tax years to offset future gains. Foreign-listed equity holdings (US stocks, UK stocks) are not covered by Section 37A — they fall under general capital gains under Section 37 at slab rates.
Frequently asked questions
What's the Section 37A rate on PSX shares?
15% flat for filers on shares acquired on or after 1 July 2024. Pre-2024 holdings follow a holding-period-based schedule. Pre-July-2013 holdings are exempt.
Do non-filers pay 37A?
Yes — at the higher of 15% or their marginal slab rate. Brokers and CDC deduct at source on every realised gain.
Can I offset PSX losses?
Yes — Section 37A losses can be carried forward up to six tax years to offset future gains. Within-year offset against gains in the same year is also allowed.
Are foreign stocks (US/UK) covered by 37A?
No — foreign-listed equities fall under general Section 37 (capital gains) at slab rates, not the Eighth Schedule special regime. DTAA credit may apply if foreign tax was withheld.