Capital gains tax your AMC will deduct when you redeem mutual fund units. Rates depend on fund category and ATL status.
Pakistan splits mutual funds into two CGT buckets, and the difference is steep. A stock fund - defined as one with equity allocation of at least 70% of NAV per the fund's offering document - is taxed at 15% for filers. Every other category (income, money-market, hybrid, asset allocation, fund of funds) gets the higher 25% filer rate. Non-filers pay 30% across the board.
The classification follows what the fund actually held during the period, not what it's named. A "balanced" or "asset allocation" fund that drifted to 55% equities during the year counts as hybrid, not stock. Your AMC's fund manager report and the monthly fund manager commentary published on MUFAP's website are the authoritative documents - if you're audited, that's what FBR will look at.
When you redeem units, the Asset Management Company computes your gain as (NAV at redemption − weighted average NAV at purchase) × units redeemed, then deducts CGT at source and remits it to FBR. The net amount lands in your bank account. You'll get a Computerised Payment Receipt (CPR) and an investor CGT certificate from the AMC's portal - that's the authoritative figure for your return.
Two subtleties trip people up. First, the AMC uses the weighted-average cost basis across all your units in that fund, not FIFO or LIFO. If you've SIP'd into a fund monthly for three years and then redeem partially, the cost basis is an average of all those NAVs. Second, switching between funds within the same AMC counts as a redemption + new purchase - CGT is triggered on the switch even though no money left the AMC's books.
Filer redeems 10,000 units of an equity fund at NAV PKR 125. Weighted average cost: PKR 95. Gross gain = 10,000 × (125 − 95) = PKR 300,000.
CGT at 15% = PKR 45,000 deducted by the AMC. Net credit to bank = PKR 1,205,000. Declare under code 6303 (Capital Gain on Mutual Funds) in the IRIS return - the AMC certificate is your supporting document.
A mutual fund can give you returns in two ways: it can declare a dividend (cash distribution or bonus units), or you can capture price appreciation by redeeming at a higher NAV. These are taxed differently and on different events. Dividend tax under Section 150 fires on distribution, typically at 15% for stock funds and 25% for money-market / income funds. CGT under the Eighth Schedule fires on redemption.
Both are final taxes - they're not added to your slab base, and you don't owe further tax on them. But both must be reported separately in your return for the wealth statement and reconciliation to balance. If you only declare the cash that hit your bank, your "inflows" line in the reconciliation will be short by the CGT/dividend amount and IRIS will flag the gap.