How to Calculate Capital Gain Tax in Pakistan
Capital Gain Taxes is a tax on the profit or gain earned from the sale of movable or immovable property.
For example, if land is purchased for Rs. 1,000,000 and later sold for Rs. 1,500,000, the profit of Rs. 500,000 will be subject to Capital Gain according to the applicable rates.
Movable Property:
Movable property includes items such as gold, paintings, sculptures, drawings, other works of art, jewellery, rare manuscripts, folios, books, postage stamps, first-day covers, coins, medallions, or antiques.
Immovable Property:
Immovable property includes agricultural, residential, or commercial land and buildings such as houses or flats.
However, Capital Gain Tax is not applicable on:
- Cash
- Stock-in-trade (held for business or trade)
- Bank balances
- Assets held for personal use
How to Calculate Capital Gain Tax in Pakistan
The profit earned on the sale of an asset or property is calculated using the following formula:
A – B
Where:
A = Sale Price
B = Cost or Purchase Price of the Property
Capital Gain Taxes is calculated according to prevailing rates, which differ for movable and immovable properties.
Immovable Property: Applicable Rates for Fiscal Year 2025-26
| S. No. | Holding Period | Rate of Taxes on properties acquired on or before 30th | ||
| day of June, 2024 | ||||
| Open Plots | Constructed Property | Flats | ||
| 1 | does not exceed one year | 15% | 15% | 15% |
| 2 | exceeds one year but does not exceed two years | 12.50% | 10% | 7.50% |
| 3 | exceed two years but does not exceed three years | 10% | 7.50% | 0 |
| 4 | Exceeds three years but does not exceed four years | 7.50% | 5% | 0 |
| 5 | exceeds four years but does not exceed five years | 5% | 0 | 0 |
| 6 | exceeds five years but does not exceed six years | 2.50% | 0 | 0 |
| 7 | exceeds six years | 0% | 0 | 0 |
Note:
If a property is sold within one year of acquisition, capital gains tax shall be charged at the rate of 15%. The taxes decreases gradually as the holding period increases, meaning the longer you hold the property, the lower the taxes liability. The government’s objective is to promote long-term investment in this sector.
In the case of flats, there is zero percent tax if the flat is sold after two years of purchase. This incentive particularly benefits residential or real estate schemes. Similarly, constructed properties are exempt from capital gains taxes if sold after four years
How to Calculate Capital Gain Tax in Pakistan Movable Property:
Capital gains on movable property are added to the person’s total income.
If the total income exceeds Rs. 600,000, Capital Gain Taxes will apply as per the applicable slab rates. If the total income is Rs. 600,000 or less, no Charge is payable.
Example:
If a salaried person earns Rs. 550,000 annually and also earns Rs. 200,000 as profit from the sale of gold, the total income will be Rs. 750,000. Since it exceeds the threshold, it will be subject to tax. There are no separate rates for profits earned on movable properties; the tax shall be calculated according to the applicable income tax slab
Different Slab Rates for Salaried and Non-Salaried Individuals
1. How to Calculate Capital Gain Tax in Pakistan for Salaried Individuals (Section 149)
(Applicable where salary income constitutes more than 75% of the total taxable income)
| Taxable Income (PKR) | Tax Rate / Slab |
| 0 – 600,000 | 0% |
| 600,001 – 1,200,000 | 1% of the amount exceeding Rs. 600,000 |
| 1,200,001 – 2,200,000 | Rs. 6,000 + 11% of the amount exceeding Rs. 1,200,000 |
| 2,200,001 – 3,200,000 | Rs. 116,000 + 23% of the amount exceeding Rs. 2,200,000 |
| 3,200,001 – 4,100,000 | Rs. 346,000 + 30% of the amount exceeding Rs. 3,200,000 |
| Over 4,100,000 | Rs. 616,000 + 35% of the amount exceeding Rs. 4,100,000 |
2. How to Calculate Capital Gain Tax in Pakistan for Non-Salaried Individuals and AOPs
(Business persons or individuals with less than 75% income from salary)
| Taxable Income (PKR) | Tax Rate / Slab |
| 0 – 600,000 | 0% |
| 600,001 – 1,200,000 | 15% of the amount exceeding Rs. 600,000 |
| 1,200,001 – 1,600,000 | Rs. 90,000 + 20% of the amount exceeding Rs. 1,200,000 |
| 1,600,001 – 3,200,000 | Rs. 170,000 + 30% of the amount exceeding Rs. 1,600,000 |
| 3,200,001 – 5,600,000 | Rs. 650,000 + 40% of the amount exceeding Rs. 3,200,000 |
| Over 5,600,000 | Rs. 1,610,000 + 45% of the amount exceeding Rs. 5,600,000 |
Examples for How to Calculate Capital Gain Tax in Pakistan
- Personal Use Asset (No Taxes Applicable):
Mr. A purchased a dining table set for Rs. 60,000 on 15 March 2010 for personal use and sold it for Rs. 80,000 on 25 May 2023.
Since the dining table was used for personal purposes, no taxes is payable on this gain. - Taxable Movable Asset (Taxes Applicable):
Mr. A has a stamp collection comprising 2,000 stamps from various countries and occasions.
- Cost of stamps: Rs. 200,000
- Sale price: Rs. 800,000
- Profit Earned: Rs. 600,000
This profit is taxable if Mr. A’s total income (including this profit) exceeds Rs. 600,000.
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