Shares, sukuk and life insurance · omitted by the Finance Act 2022
Section 62 Tax Credit in 2026-27: Withdrawn, and What You Can Claim Instead
Section 62 gave a tax credit for buying newly issued listed shares, sukuk or ETF units, or paying life insurance premiums. The Finance Act 2022 removed it, so Tax Year 2021-2022 was the last year it could be claimed. This calculator works it out for that year, for an amended return or an old assessment (check the time limit first, with the assessment time-bar calculator), and the page shows what you can still claim today. Nothing you type leaves your browser.
Not available for current years. Section 62 was omitted by the Finance Act 2022 and cannot be claimed for Tax Year 2022-2023 or later, including Tax Year 2026-2027. The figures below are for Tax Year 2021-2022.
Worked examples
How much was the Section 62 credit worth, and what can you claim now?
In Tax Year 2021-2022, someone with Rs 3,600,000 of salary who bought Rs 500,000 of newly issued listed shares paid Rs 390,000 in tax before the credit and got a credit of Rs 54,167, leaving Rs 335,833 to pay. The same person in Tax Year 2026-2027 gets nothing for the shares, but putting the same Rs 500,000 into an approved pension fund earns a Section 63 credit of Rs 57,778. The table shows the most each credit could be worth at six incomes, assuming the investment is at least the eligible amount.
| Taxable income | Section 62 eligible, 2021-22 | Section 62 credit, 2021-22 | Section 63 eligible, 2026-27 | Section 63 credit, 2026-27 |
|---|---|---|---|---|
| Rs 1,200,000 | Rs 240,000 | Rs 6,000 | Rs 240,000 | Rs 1,200 |
| Rs 2,400,000 | Rs 480,000 | Rs 36,000 | Rs 480,000 | Rs 31,200 |
| Rs 3,600,000 | Rs 720,000 | Rs 78,000 | Rs 720,000 | Rs 83,200 |
| Rs 6,000,000 | Rs 1,200,000 | Rs 179,000 | Rs 1,200,000 | Rs 220,800 |
| Rs 12,000,000 | Rs 2,000,000 | Rs 390,833 | Rs 2,400,000 | Rs 634,800 |
| Rs 24,000,000 | Rs 2,000,000 | Rs 470,417 | Rs 4,800,000 | Rs 1,474,800 |
Two things are worth reading off it. The Section 62 eligible amount stopped growing at Rs 10,000,000 of income, where 20% reached the Rs 2 million cap, so above that the credit rose only with the average rate; Section 63 has no rupee cap. At Rs 1,200,000 and Rs 2,400,000 of income the old Section 62 credit was the bigger of the two; at Rs 3,600,000 and above the pension credit is larger, and at Rs 24,000,000 it is Rs 1,474,800 against Rs 470,417, each on its own year’s slabs. The pension credit grows with income twice over, because its average rate and its uncapped eligible amount rise together: it is Rs 1,200 on Rs 1,200,000 and Rs 1,474,800 on Rs 24,000,000.
Step by step
The Section 62 tax credit formula, step by step
Tax before the credit
Taxable income for Tax Year 2021-2022, on that year's salaried or non-salaried slabs.
The eligible amount
The lowest of what you invested in the year, 20% of taxable income and Rs 2,000,000.
Your average rate on it
Tax before credit divided by taxable income, applied to the eligible amount: (A/B) x C.
Tax after the credit
Tax before less the credit. A later sale is not modelled: shares sold within 24 months had the credit added back in the year of sale.
Reading the result
Is the Section 62 tax credit still available?
No. The Finance Act 2022 omitted Section 62, together with the health insurance credit in Section 62A, so neither can be claimed for Tax Year 2022-2023 or any year since. Guidance published before 2022 still turns up in searches and describes it as current; it is not. The reason to work it out now is an amended return, an assessment or appeal for Tax Year 2021-2022 or earlier, or simply understanding an old return.
Is there a tax credit on shares in Pakistan now?
Not any more. Buying listed shares, sukuk or ETF units earned a credit only while Section 62 was in force, up to Tax Year 2021-2022. Since then the only investment-linked credit for an individual is Section 63, for contributions to an approved pension fund, and that is a pension, not a share purchase.
A credit reduces tax; a deduction reduces income
Section 62 was a credit, so it came off the tax itself, at your average rate. A deduction comes off income, at your marginal rate. The same structure survives in Section 63 and in the Section 61 donation credit (donation tax credit calculator), while Zakat and the welfare fund payments under Sections 60 to 60B are deductions.
The holding rule had teeth
Selling the shares within 24 months added the credit already claimed back to the tax for the year of sale. Surrendering a life policy within two years was treated the same way, with the earlier years' tax recomputed. Anyone checking an old return should look for a sale or surrender that triggered that.
Where this stops
The calculator models Tax Year 2021-2022 only. Earlier versions of Section 62 capped the eligible amount at a lower share of income and asked for a twelve-month holding, so a year before Tax Year 2021-2022 needs that year's text. It does not check whether a particular share issue, sukuk or policy qualified; that depended on the issuer and how the investment was made. For tax on your income in Tax Year 2026-2027, use the income tax calculator.
Sources
Where these figures come from
The terms of Section 62 are read from the text of the omitted section as reproduced in the FBR's consolidated Income Tax Ordinance, amended up to 30 June 2026, which records the omission by the Finance Act 2022 and the section as it stood until then; Section 63 is read from the same document. The Tax Year 2021-2022 and Tax Year 2026-2027 slabs come from the slab file the income tax calculator uses, so the tax before credit matches that calculator for either year. The worked examples and FAQ figures are computed from those.
How rates are checked and corrected is in the editorial policy; if a figure looks wrong, report it with the source.
FAQs
Section 62 tax credit: questions people ask
Is the Section 62 tax credit still available in Pakistan?
No. The Finance Act 2022 omitted Section 62 of the Income Tax Ordinance, so the credit for buying shares, sukuk, exchange traded fund units or paying life insurance premiums is not available from Tax Year 2022-2023 onward. Tax Year 2021-2022 was the last year it applied. The nearest credit still in force is Section 63, for contributions to an approved pension fund. It is a separate credit, not a successor.
What replaced the Section 62 tax credit?
Nothing replaced it directly. Section 63 already existed and was never withdrawn: for an eligible individual with salary or business income, a contribution to an approved pension fund under the Voluntary Pension System Rules 2005 earns a credit at your average rate of tax on the lesser of the contribution and 20% of taxable income. On Rs 3,600,000 of salary in Tax Year 2026-2027, a Rs 500,000 contribution gives a credit of Rs 57,778. The health insurance credit under Section 62A was omitted by the same Finance Act.
How was the Section 62 credit calculated?
With the formula (A/B) x C: tax before credits, divided by taxable income, multiplied by the eligible amount. For Tax Year 2021-2022 the eligible amount was the lowest of the amount invested, 20% of taxable income and Rs 2 million. On Rs 3,600,000 of salary and Rs 500,000 invested, the tax was Rs 390,000 and the credit Rs 54,167: the average rate applied to the investment, not a flat percentage.
What investments qualified for the Section 62 credit?
Before its omission, Section 62 covered new shares offered to the public by a company listed on a stock exchange in Pakistan, bought as the original allottee or from the Privatisation Commission; sukuk offered to the public by a listed company, as the original allottee; units of an exchange traded fund; and premiums on a life insurance policy with an SECP-registered insurer, for someone with salary or business income.
What happened if the shares were sold early?
While Section 62 applied, if shares that earned the credit were sold within 24 months of buying them, the credit was added back to the tax for the year of sale. A life insurance policy surrendered within two years of being taken out had its credit treated as wrongly allowed, and the tax for those years was recomputed.
Why does this calculator use the Tax Year 2021-2022 slabs?
Because that was the last year the credit existed, and the average rate in the formula is that year's rate. The terms changed over the credit's life: earlier versions capped the eligible amount at a lower percentage of income and required shares to be held for twelve months, so years before Tax Year 2021-2022 are not modelled here.
Could the Section 62 credit create a refund?
No. While it applied, the credit was the average rate of tax applied to an eligible amount of at most 20% of taxable income, so it could only ever be a fraction of the tax and could never create a refund. If the tax before credits was nil, so was the credit.
Is my information stored anywhere?
No. The calculator runs entirely in your browser, with the slab tables built into the page. Nothing you type is sent anywhere, stored or logged, and the page sets no cookies.
Claim what still exists
Work out your Section 63 pension credit for 2026-27
The tax credits and allowances calculator prices a pension fund contribution alongside Zakat, welfare fund and tuition-fee allowances on the current slabs.
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