Government of Pakistan

Ministry of Finance, Economic Affairs,

Statistics and Revenue Division

(Revenue Division)

****

No.F.4(1)ITP/2004-SE

Islamabad, July 1, 2004

 

Circular No. 05 of 2004

(Income Tax)

 

 

Subject:         DEDUCTION OF WITHHOLDING TAX BY A REGISTERED STOCK EXCHANGE ON CARRY OVER TRADE MARK-UP.

 

 

  1.            A registered stock exchange in Pakistan shall collect advance tax at the rate of 10%, with effect from July 1, 2004, on carry over trades (COT – Badla) mark-up transacted through its automated system in COT market.

2.               Any mark-up including commission on COT/Badla in respect of listed shares in whatever form transacted by the brokerage houses and/or their agents either manually and/or through electronic system including matching of orders in any internet based trading system and not routed through the stock exchange automated system, shall also be liable to be taxed at the same rate.  The member concerned of the stock exchange shall collect tax from its financiers and together with tax on proprietary trading, if any, shall pay tax on such transactions to the stock exchange alongwith the statement specified at the bottom of this circular.  In case of no transactions, a nil statement shall be submitted by the concerned member.

3.             The tax collected under para 1 and 2 above would be adjustable against final tax liability of the financier.  The financiers seeking refunds on account of exemption shall file claims in their tax returns with supporting documents including bills from concerned members of the stock exchange.

4.            The amount of tax collected shall be deposited on 25th of each month into govt. treasury.  The copy of paid challan alongwith the following statement shall be forwarded to the CIT concerned holding jurisdiction over the concerned stock exchange.

STATEMENT REGARDING COLLECTION OF ADVANCE TAX UNDER CLAUSE (d) OF SUB-SECTION (1) OF SECTION 233A OF INCOME TAX ORDINANCE, 2001.

NAME OF REGISTERED STOCK EXCHANGE _________________________

STATEMENT FOR THE MONTH         _________________________________

S.No.

Name of the Member/Broker

Total investment

Amount of mark-up on COT

Tax collected

Date of payment into govt. treasury.

 

 

         

 

     (ABDUL HAMID)

SECRETARY (IT POLICY)