Taxation of bonus shares (taxing a non-economic capitalization event)
Reform IDF713
DescriptionBonus shares are taxed as deemed income at 10% for filers & 20% for non-filers under Section 236Z, of the ITO, 2001. Bonus shares represent a neutral accounting reclassification of previously taxed profits rather than the realization of new income. By taxing notional gains, the policy imposes an inequitable burden of double taxation and creates market distortions.
DepartmentFederal Board of Revenue - FBR-IRS
Jurisdiction / LocationFederal - Entire Pakistan
SectorAll Sectors
Start Date03-06-2026
Target Deadline
Date Enacted
Implementation StatusIn Progress
Progress 0%
CCORR Direction
Cost Savings PKR (Mil.)
Evidence