The Securities and Exchange Commission of Pakistan (SECP) has accepted a budget proposal of Karachi Stock Exchange (KSE) to increase the tax credit, depending on investment of listed public companies under Income Tax Ordinance, 2001.
Sources told Business Recorder on Sunday that the Commission has finalised comments on a budget proposal of the KSE seeking tax credit on the size of investment in shares under Section 62 of the Income Tax Ordinance, 2001.
The KSE was of the view that, at present, the tax credit is available to person other than a company for acquiring new shares offered to the public by a listed company. It was proposed that the present ceiling on maximum investment should be increased from existing Rs 0.3 million or 10 percent of taxable income to Rs 0.6 million or 20 percent of the taxable income.
Responding to the proposal, the SECP opined that the KSE has given a reasonable suggestion, which may be incorporated in the upcoming budget taxation proposals in consultation with the Federal Board of Revenue (FBR).
The increment in existing tax credit limit will attract individual investors to make investment expanding the capital market with the induction of new companies and will promote listing of new companies.
Under Section 62 (investment in shares) of Ordinance, 2001, a person other than a company shall be entitled to a tax credit for a tax year pertaining to cost of acquiring in the year new shares offered to the public by a public company listed on a stock exchange, where the person is the original allottee of the shares or the shares are acquired from the Privatisation Commission.
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