Govt Proposes to Increase Tax Rate on Capital Gains From Mutual Funds to 15%

The federal government has proposed a 15 percent tax rate on individuals who invest through mutual funds, reliable sources told ProPakistani. The tax rates on interest rate income for individuals range from 15 percent to 35 percent but if such persons invest through mutual funds, the rate of dividend is 15 percent. Capital gains from mutual funds are taxed at 10 percent but the rate of capital gain is now proposed at 15 percent. Income tax on dividend income from a mutual fund may be enhanced from 15 percent, where a mutual fund is deriving 50 percent or more of its income from profit on debt. The tax rate on capital gains from mutual funds for individuals and Associations of Persons (AOPs) may be enhanced from 10 percent to 15 percent. Capital gain from mutual funds for non-filers is now proposed to be taxed up to 45 percent. The revenue impact due to the proposed tax rate hike on dividends and capital gains from mutual funds is expected to exceed Rs. 6 billion. For live updates on everything about the Federal Budget, visit this link.