1. CAPITAL GAIN
Two types of capital gain:
1. Capital gain on capital asset.
2. Capital gain on securities.

2. Capital asset
 It is defined as property of any kind
connected with business or not.
 It includes:
1. Shares of a private company.
2. Membership card of a stock
exchange.
3. Shares in partnership firm.

3. Capital asset
 It does not include:
1. Any stock in trade
2. Any asset subjected to
depreciation
3. Any moveable property held for
personal use of the person or to any
dependent family member.

4. Securities
It is a specified capital asset.
It includes:
a. Shares of a public company
b. Vouchers of PTCL
c. Modaraba Certificate
d. Redeemable capital
e. Derivative product

5. Capital gain
 An increase in the value of the capital
assets and securities.
 Gain on the disposal(sale) of the
capital asset and securities.
 It may be short term or long term
 It is claimed on the income taxes.

6. Calculation of capital gain
Two formulas:
1. If the assets are disposed after one
year or more, the formula will be,
A-B
A is the consideration received.
B is the cost of capital.

7. Calculation of capital gain
 2. If the assets are disposed before a
year, the formula will be,
A×¾
A is the capital gain(as calculated in the
1st formula).

8. Taxability
 Any gain on the disposal of a security is chargeable to
tax subject to the following conditions:
 Holding
Period Tax Year Rate of
Tax
less than 12 months 2011 7.5%
2012 8%
2013 8.5%
2014 9%
2015 9.5%
2016 10%
 More than 12 months - 0%