Capital Gains Chapter- 12
In respect of tax year 2012, for the period commencing from coming into force of this Schedule till
June 30, 2012, the certificate issued by NCCPL under rule 1(4) shall be the basis of capital gains and
tax thereon for that period.
Example: Mr. Adnan sold some shares in tax year 20 23. Detail of gain or loss on sale is given below:
Gain / (loss)
Rs.
(a) Shares of Alpha Chemicals (Pvt.) Ltd. 100,000
(Holding period is 15 months)
(b) Shares of Beta Industries Ltd. (Unlisted public Company) (60,000)
(Holding period is 6 months)
(c) Shares of Omega Limited (Listed Company) 10,000
(Holding period 9 months shares acquired after 1 July 2016)
(d) Shares of Delta Limited (Listed Company) 20,000
(Holding period 18 months shares acquired before 1 July 2016)Required: Compute taxable income and tax liability for tax year 20 23.
Solution:
Mr. Adnan
Computation of taxable income and tax liability: Rs.
Capital gain:
Gain on shares of Alpha Chemicals (Pvt.) Ltd.
(Holding period is more than 1 year) 100 ,000
Loss on shares of Beta Industries Ltd. (Unlisted Public Company)
(In case of loss, holding period has no effect) (60,000)
Taxable income 40 ,000
Computation of tax liability:
Tax on taxable income (Below taxable limit) Nil
Tax on income under separate block of income:
Tax on gain on shares of Omega Limited (10,000 x 15 %) 1, 500
Tax on gain on shares of Delta Limited (20,000 x 1 2.5%) 2, 500
Total tax liability 4 , 000- Loss U/S 37:
Capital losses shall be set off against the capital gains only during the same tax year and where such
loss is not so set off then the balance loss shall be carried forward for adjustment against capital gain
up to six succeeding tax years. If capital gain is exempt from tax then loss from such asset shall have
no treatment under capital gain. [U/s38 (1) and (2)]
Example: From the following information, compute the amount of capital loss to be carried forward, if
any
Taxable capital gain 40,000
Capital loss 80,000
Note: Out of given capital loss Rs. 20,000 relates to capital asset that is exempt from tax.
Solution:
Total capital loss 80,000
Less: capital loss of exempt capital asset 20,000
60,000
Less: Taxable capital gain 40,000
Capital loss to be carried forward 20,000