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3 Feb 2015

Inspector Inland Revenue MCQS

21:44 Inspector Inland Revenue MCQS No comments

Taxation Management

Question No: 1

Mrs. Sara received a basic salary of Rs. 280,000 during the year ended 30.06.2009. She received gratuity from the government of Sindh of Rs. 21,600. What would be her tax payable?

A Rs. 1,938

Question No: 2

Which of the following canon of taxation suggests that there should not be any arbitrariness or ambiguity in respect of amount of tax paid?

Capacity to Pay

Question No: 5

Any Income entitled to be received by a Company then entry of such amount will only be made in the books of accounts if:

Company maintaining its books of account on Cash basis

Company maintaining its books of account on Accrual basis

Company maintaining its books of account on Both Accrual and Cash basis

None of the given options

Question No: 6

Income Tax is charged on which of the following?

Income of the current tax year

Income of the previous year

Income of the coming year

Any Receipt of money

Question No: 8

Pension is defined in which of the following schedule of the Income Tax Ordinance 2001?

2nd Schedule Part 1 Cl. (8)

2nd Schedule Part 1 Cl. (24)

2nd Schedule Part 2 Cl. (22)

1st Schedule of Part 2 Cl. (20)

Question No: 9

Resident Person (Section 81) includes which of the following?

Resident Individual & Association of Persons

Resident Company

Federal Government

All of the given options

Question No: 10

Which part of income is charged to tax of resident person under the income tax ordinance 2001?

Pakistani source of income

Foreign source of income

Both Pakistan and foreign source of income

None of the given option

Question No: 11

____________ means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

Permanent establishment

Small Business Units SBU

Question No: 12

Which of the following is the general definition of tax?

Compulsory contribution of wealth by persons

Optional contribution of wealth by persons

Compulsory contribution of wealth by state

Optional contribution of wealth by state

Question No: 13

Which one of the following section defines ‘Income’ under the head Income from Business section 18?

Section 2(9)

Question No: 14

'Income is recorded when received and expenditure when paid', which one of the following accounting systems describe this statement?

Cash basis accounting system

Accrual basis accounting system

Both cash and accrual basis

None of the given options

Question No: 15

On Building (all types) the depreciation rate specified for the purposes of section 22 shall be:

10%

Question No: 16

Section 22(15) defines depreciable asset means:

Any tangible movable property

Any tangible immovable property (other than unimproved land)

Structural improvement to immovable property

All of the given options

Question No: 18

The salary received from the UK Government by Mr. Amir resident of Pakistan. Which section of the income tax ordinance explains his tax treatment of such salary?

Section 102

Question No: 19 Revision of return can be made on an application made by the tax payer relating to issuance of an exemption, by which of the following authorities?

Income Tax Officer

Assistant Controller of Income tax

Deputy Controller of Income tax

Regional Commissioner of Income tax

Question No: 20

Appeal to CIT (appeals) shall be filed in which of the following manner?

On prescribed form

On stamped paper

Legal documents

Question No: 23

Which of the following is included in the assessment order by commissioner?

Amount of Tax Paid

All of the given options

Question No: 24 In Sales Tax Act "Zero - rated supply" means a taxable supply which is charged to tax at the rate of zero per cent define under

Question No: 25

Mr. Kishan Kumar during his yearly tour in Pakistan spends 155 working days, 26 off-working days 1 strike day and 1 Public Holiday in a tax year 2008-09? What will be the status of the individual?

Resident Individual

Non Resident Individual

Resident Person

Mr. Kishan Kumar during his yearly tour in Pakistan spends 156 working days, 26 offworking days and 1 Public Holiday in a tax year 2009-2010? Which of the following is his residential status?

Select correct option:

Resident Individual

Non Resident Individual

Resident Person

Question No: 26

Mr. Zeeshan during his yearly tour in Pakistan spends 180 working days and in a tax year 2008-

09? What will be the status of individual?

Resident Individual

Non-Resident Individual

Resident Person

His total stay in Pakistan is less than 183 days , so he is non resident individual as per income tax ordinance section 81.

Question No: 27

Which of the following is the rate of tax for AOP for tax year 2009, where the taxable income exceeds Rs. 100,000 but does not exceed Rs. 110,000?

0.50%

Question No: 28

Which of the following is the rate of tax for AOP for tax year 2009, where the taxable income exceeds Rs. 125,000 but does not exceed Rs. 150,000?

2.00%

Question No: 29

Which of the following is the Rate of Tax for dividend received from power Generation Company for Tax Year 2009?

7.50%

Question No: 30

Which one of the following is not the feature of Sales Tax?

Elastic/ Flexible

None of the given options

Question No: 31

Mr. Ali received a basic salary of Rs. 20,000 per month during the year ended 30.06.2009. During the year domestic bills of water, telephone and electricity amounting to Rs. 6,000, 12,000, and 9,600 were paid by his employer respectively. What would be his taxable income?

Rs. 267,600

Question No: 32

Mr. Saleem received a basic salary of Rs. 10,000 per month during the year ended 30.06.2009. During the year his employer provided the services of a driver and a housekeeper. The company paid Rs. 4,000 per month to each of these employees. What would be his taxable income?

Rs. 186,000

Question No: 33

The basic salary of Mr. Ghauri (a salaried person) during the year 30.06.2009 is Rs. 445,000. He paid Zakat under Zakat Ordinance of Rs. 8,000 and received commission of Rs. 24,000. What will be his taxable income?

Rs. 461,000

Question No: 38

Mr. Sadiq received a salary of Rs. 200,000 during the year ended 30.06.2009. His MTS is (Rs. 200,000-5,000-300,000). He has received medical allowance and facility of interest free loan from his employer of Rs. 10,000 per month and Rs. 900,000 respectively. What would be his tax payable?

Question No: 39

Mr. Shafqat received a basic salary of Rs. 350,000 during the year ended 30.06.2009. His company maintained car for personal and official use. The cost of the vehicle is Rs. 880,000.What would be his tax payable?

Question No: 34

Mr. Shafqat received a basic salary of Rs. 200,000 during the year ended 30.06.2009. He has received lunch facility, cost of living allowance and adhoc relief of Rs. 6,000, 50,000, and 7,800 respectively. What would be his tax payable?

Rs. 1,978.5

Question No: 40

A retailer whose value of supplies in any period during the last twelve months ending any tax period exceeds_______ are required to be registered under the Sales Tax Act 1990;

Forty million rupees

Twenty million rupees

Ten million rupees

Five million rupees

Question No: 42 Statutory Provident Fund is governed by which one of the following?

Finance Act 2006

Insurance Act 1969

Provident Funds Act 1925

Finance Bill 2007

Question No: 44

Mrs. Waseem has rented out her house at Rs. 15,000 per month. As per rent deed she has received an amount of Rs. 75,000 as advance, which is non adjustable against rent. What would be the amount of rent chargeable to tax where the fair market rent is Rs. 100,000?

Rs. 1,87500

Question No: 45 Mr. Waqas is a practicing chartered accountant. He has received audit fees of Rs. 300,000 and the examiner’s fees of Rs. 2,000. During tax year 2009 he has made membership and certificate expenses of Rs. 500. What will be his income from profession?

Rs. 301,500

300,000+2000-500=301,500

Question No: 46 M/s. RST filed tax return for tax year 2009, declaring taxable income as Rs. 1,135,000 made payments in execution of a contract for purchase of office appliances Rs. 250,000. What will be the tax payable of the company?

Rs. 484,750

Calculation: Tax Liability

1135000+250,000=1,385000*35%=484,750

Question No: 47

Mr. Qasim received income from business of Rs. 107,000. He has received gain on sale of residential house of Rs. 140,000. What will be his taxable income?

Rs. 107,000

Question No: 37

Mr. Qasim received income from business of Rs. 6,107,000. He has received gain on sale of residential house of Rs. 140,000. What will be his taxable income?

Rs. 6,107,000

Question No: 48

Mr. Jamil has received income from poultry farm of Rs. 645,000 and gain on sale of shares of private company Rs. 136,000 where the shares were disposed off after 12 months. The capital loss amounted to Rs. 15,000 was reported. What will be his taxable income?

Rs. 732,000

FIN623 Online Quiz# (4 & 5)

Question # 1 If an employee’s taxable income is Rs.715, 000 and he paid donations amounting Rs.10,000 to a charitable institution, what will be the value of ‘C’ in calculating tax credit?

Select correct option:

Which one of the following section deals with intangibles?

Mr. A is an employee of Government of the Punjab, his data for the year 2010 is given below. Salary: Rs. 60,000 per month Gratuity: Rs. 1,000,000 Calculate his taxable income.

Select correct option:

A firm ABC maintaining its account in accrual basis, at June 27, 2008 it is entitled to receive Rs. 10,000 but actual payments made at 01 August 2008. In which year it is charged to tax?

Select correct option:

2008

Deficit Financing is one of the tools of which of the following policy?

Monetary policy

Fiscal policy

Economic Policy

Following person is required to file tax return:

Select correct option:

Disabled person

The person has become bankrupt

Orphan below age of 25

The process of clubbing of income results in which of the following?

Select correct option:

Lower Bracket rate of tax is charged

Higher Bracket rate of tax is charged

Moderate Bracket rate of tax is charged

No change occur due to clubbing

Which of the following incomes are treated as agriculture income?

Agro based industry

Spontaneous forests

Interest received by a farmer on lending

Income from land situated in Pakistan used for agriculture

Which of the following is the important content for calculating tax on income?

Residential Status

All of the given options

(A / B) x C In the above formula for calculating tax credit under section 61 of the Income tax Ordinance 2001, C represents which of the following?

Amount of Gross tax

Person’s taxable income for the tax year

Amount of exemption as per Ordinance

Net Income Of the year

Which of the following section deal with tax treatment of person who is a cultivator or receiver of agricultural produce as rent-in-kind in the business of cultivator?

Rule 11 of the IT Rule 2002

Section 40 of the Income Tax Ordinance 2001

Section 41 of the Income Tax Ordinance 2001

Section 42 of the Income Tax Ordinance 2001

In an association of person, 25% tax rate is applied where the taxable income exceeds:

Rs 1,300,000

Deductions not allowed under the head income from business is defined by

A depreciable asset has normal useful life of:

One year or more

None of the given options

Expenses entitled to be paid by a Company, then entry of such expenses will be made in the books of accounts if:

Company maintaining its books of account on Cash basi

Company maintaining its books of account on Accrual basis

Company maintaining its books of account on Both Accrual and Cash basis

None of the given options

Every person owns immovable property, with a land area of _________ or more in municipal limits, cantonment and CDA is required to file return of income tax.

250 Sq. yards

Formula to compute the tax rate applies on gratuity received, “B” stands for;

The total tax paid or payable by the employee for the three preceding tax years

The employee’s total taxable income for the three preceding tax years

The gratuity received by the employee

None of the given options

Which of the following tax is paid in relation to how much you earn?

Inheritance Tax

Value added Tax

In case of discontinuance of business, what is the time period to file a return?

Within 05days of discontinuance

Within 15days of discontinuance

Within 25days of discontinuance

Within 30days of discontinuance

The formula used in the computation of capital gain is:

A-B

What rate is applied in normal depreciation of plant and machinery?

15%

Mr. Z resident of Pakistan received dividend amounting Rs. 10,000 in UK from UK resident company. What is the tax treatment for calculating his gross total income?

Added in total income

Subtracted from the total income

No treatment due to non-resident company

Exempt from tax

Which of the following days shall be counted as half day for the computation of residential status of an individual?

A Public Holiday

A day of sick leave

None of the given options

Question # 15 Pension is exempt under

Clause (12) Part I of Second Schedule

Clause (121) Part I of Second Schedule

Clause (122) Part I of Second Schedule

Clause (112) Part I of Second Schedule

Special tax year is adopted after seeking approval from the ____________ under section 74(3).

Commissioner

Appellate Tribunal

Any income from a business carried on outside Pakistan through permanent Establishment by a resident person belongs to which of the following?

Pakistani source of Income

Foreign source of income

Both Pakistan and foreign source of income

None of the given option

Accrual basis accounting method is mandatory for which one of the following:

Salaried person

Association of person

Which of the following is the main tool of Fiscal Policy?

Taxes

Deficit Financing

Transfer Payments

Which one of the following is excluded from the definition of capital asset?

A postage stamp

Stock-in-trade

Question # 12 Non-adjustable amounts shall be treated as rent and chargeable to tax, these amounts are spread over a period of

Which of the following section deals with the residential status of Association of Person?

If a cultivator used its agricultural produce as raw material in its business what will be the tax treatment of such agriculture produce?

Market price of such produce will be deducted as business expenditure

The expenses of cultivation will be deducted as expense from business

The land revenue rent paid will be deducted as expense from business

All of the given options

__________ are allowable deductions in case if the tax payer is running a business.

Office expenditures

All of the given options

Question # 1 Which part of the Income Tax Ordinance 2001 deals with Tax credits?

Chapter III Part VII

Chapter III Part VIII

Chapter III Part IX

Chapter III Part X

Which of the following is a general compulsory contribution of wealth by the state, to meet the expenses incurred in providing common benefits upon the residents?

Taxes

Which one of the following is the main objective of Fiscal Policy?

Economic Development

Price stability

Removal of deficit in Balance of Payment

All of the given options

Bench Mark rate for the tax year 2010 is:

12%

Deduction is allowed on expenditure on acquiring a depreciable asset whose useful life is:

More than one year

Which one of the following canons of taxation suggests easiness in time of payment and mode of collection of tax?

Convenience

Capacity to Pay

Who is liable to pay tax in a partnership form of business?

Partnership firm

Partner with large share

None of the given options

Mr. Afzal would like to compute the tax rate apply on the gratuity received the formula to compute the tax rate is.

Which of the following may grant approval to any gratuity fund?

Federal Tax Ombudsman

Federal Government

Superior judiciary

Commissioner of Income Tax

An Individual will be termed as Short Term Resident under section 50 of the IT

Ordinance 2001 provided:

His period of stay equal to 183 days

The employee of Federal Government

The citizen of Pakistan

Resident solely by reason of the individual’s employment

Any gain arising on the disposal of shares in a resident company belongs to which of the following?

Foreign source of income

Pakistan source income

Both Pakistan and foreign source of income

None of the given option

If the accounting year of firm manufacturing shawls is started from 1st April 2002 and ending on 31st March 2003. What will be its tax year?

Tax year 2003

Concept of separate legal entity of accounting applies on which of the following concepts in taxation under section 105 of the ordinance?

Resident and permanent establishment

Non-resident and permanent establishment

Citizenship and permanent establishment

All of the given options

A definition that includes the dictionary meanings of the word is termed as:

Exclusive definition

Inclusive definition

Both Inclusive & Exclusive definitions

Statutory definition

Any amount shall be foreign-source income if it is paid by:

Resident person

Non-resident person

Citizen of Pakistan

All of the given options

Utilities were exempted up to 10% of MTS or Basic salary till 30th June, 2006, vide clause 38 of part 1 of Second Schedule. This clause has been omitted by:

Finance Ordinance 2004

Finance Ordinance 2005

Finance Act 2006

Finance Act 2007

Depreciation rate applied on all types of buildings under section 22 is:

10%

Question # 3 Which of the following section of Income Tax Ordinance 2001 deals with perquisites of Income from Salary and its treatment?

Which of the following tax is paid from money you received from someone who has died?

Inheritance tax

Which of the following is NOT treated as transactions through the banking channel?

Online transfer of payment

Payments through credit card

Payment through cash

None of the given options

If M/s ABC and Co. an association of person is a non-resident AOP which of the following condition must be satisfied?

Control and management of affairs of AOP is situated partly in Pakistan.

Control and management of affairs of AOP is situated wholly in Pakistan.

Control and management of affairs of AOP is situated wholly or partly in Pakistan

None of the given options

Non-Agricultural income does Not includes which one of the following?

Dividend paid by a company out of its agriculture income

Royalty income of mines

Profit on sale of standing crops

Income from fisheries

Mr. Joseph is an employee of Foreign Government posted in Pakistan? What will be the residential status of Mr. Joseph?

Resident Individual

Non- Resident Individual

Which of the following is NOT a “Person” as defined in Sec 2 (42) of the Income Tax Ordinance?

The Federal Government

Public International Organization

None of the given option

A definition that excludes the dictionary meanings of the word is termed as:

Exclusive definition

Inclusive definition

Both Inclusive & Exclusive definitions

Statutory definition

Senior citizen-age 60 years & above where taxable income not exceeding ________ tax liability reduced by 50% under Part 3 of second schedule.

Rs. 400,000

Which of the following is the rate of tax for male salaried Individuals for tax year 2010, where the taxable income exceeds Rs. 200,000 but does not exceed Rs. 250,000?

0.50%

Which part of income is charged to tax of non-resident person under the income tax ordinance 2001?

Pakistani source of income

Foreign source of income

Both Pakistan and foreign source of income

None of the given option

Gratuity fund which is fully exempt from tax is approved by:

Income tax officer

Commissioner of income tax

Liquidator is referred as:

A liquidator of a company

A trustee for a bankrupt

A mortgagee in possession

All of the given options

Flying allowance shall be taxed @:

1.5% of amount received as a separate block of income

2% of amount received as a separate block of income

2.5% of amount received as a separate block of income

3.5% of amount received as a separate block of income

Which one of the following is NOT a depreciable asset?

Tangible movable property

Unimproved land

Tangible immovable property

Structural improvement to immovable property

Question # 10 Which of the following is a literal meaning of tax?

Which of the following is NOT the type of tax?

Value Added Taxes

Fees and Penalties

Which of the following is the example of deem income?

Loan through cross cheque

Golden hand shake

Which of the following is NOT an admissible deduction under the head income from property?

Payment of premium

Fair market rent

Which one of the following sections deals with prizes and winnings?

Section 156

General Provident (GP) Fund available in the Government Organization is also called as:

Statutory Provident Fund

Recognized Provident

Unrecognized Provident Fund

None of the given options

Which of the following is the tax where the tax rate remained fixed to the amount on which the rate is applied increases?

Proportional tax

Progressive tax

Which one of the following is the general meaning of Tax?

Which of the following is the Tax year available for salaried individual?

1st January to 31st December

1st July to 30th June

1st October to 30th September

1st September to 31st August

If any other office involved in the management of a company it is termed as:

Business premises

Mr. A employed in Pakistan received dividend amounting Rs. 10,000 in UK from Pakistani resident company. What is the tax treatment for calculating his gross total income?

Added in total income

Subtracted from the total income

Added in income after tax

Exempt from tax

Which one of the following is NOT a liquidator under section 141 of the income tax ordinance 2001?

Receiver appointed by a Court

Trustee for a bankrupt

Mortgagee in possession

Agricultural income does NOT include which one of the following?

Rent or Revenue derived by a person from land

Income derived from land situated in Pakistan

The land is used for agricultural purposes

Income from spontaneous forest

Mr. A’s total taxable income for the year 2010 is Rs. 150,000. Which of the following is the tax liability of Mr. A?

Nil

A return of income as required to be furnished under section 114 shall be in the form specified in:

Part I of second schedule

Part II of second schedule

Part III of second schedule

All of the given options

Which one of the following sections discusses the cash-basis accounting?

Pension received by an employee of the Government or the armed forces is exempt from tax define in:

2nd Schedule Part 1 Cl.(8)

2nd Schedule Part 1 Cl.(25)

2nd Schedule Part 1 Cl.(9)

None of the given options

What is the rate of tax for a small company?

10% of taxable income

20% of taxable income

25% of taxable income

30% of taxable income

Loss from speculation business can be set off against

Business income

Income earned from resident company

Speculation business income

None of the given options

Income from building leased out together with Plant & Machinery falls under

Income from property

Income from salary

Income from capital gain

Income from other sources

The Fiscal year is a period of ______ months arbitrarily chosen for tax purposes.

3

6

A woman taxpayer shall be charged to tax if taxable income is:

Less than Rs. 100,000

Less than Rs. 200,000

More than Rs. 200,000

More than Rs. 260,000

What is the residential status of Federal Government of Pakistan?

Resident Person

Resident Company

In the formula of computing the capital gains, A defines

Cost of the asset

Consideration received on disposal

None of the given options

Provident fund maintained by a private organization which has not been granted recognition by the Income Tax Authorities, is discussed in which of the following type of provident fund

Government provident fund

Recognized provident fund

Unrecognized provident fund

None of the given options

Not mentioned in Income Tax Ordinance 2001

If capital asset has been held for more than one year, it is exempt from tax up to:

Select correct option:

10% of total capital gain

15% of total capital gain

25% of total capital gain

30% of total capital gain

If tax payable of a sole proprietorship is Rs. 595,000, what will be the tax rate applied?

Land revenue rent (Lagan) is received by which of the following authority?

Income Tax Department

Provincial Government

If tax payable of a partnership firm is Rs. 900,000, what will be the tax rate applied?

Valuation of stock is computes by the formula:

A+B-C

2(59) of Income Tax Ordinance 2001 defined: “shareholder” in relation to a company,includes a modaraba certificate holder, a unit holder of a unit trust and a beneficiary of a trust. In which criteria the above definition falls?

Exclusive definition

Inclusive definition

Both Exclusive and Inclusive definitions

Statutory definition

Gratuity will be ignored in computing taxable income of

Resident person

Non-resident person

Income tax officer

Deceased person

Achieving full employment level is one of the objectives of which of the following policy?

Monetary policy

Fiscal policy

Economic Policy

For the year 2009 Mr. Ali has basic salary Rs. 40,000 p.m. what will be the salary of Mr. Ali for the tax year 2010?

Rs. 240,000

Normally the salary income is taxed on cash basis but there is one exception available in Income Tax Ordinance 2001 that salary income can be taxed on due basis if there are reasonable grounds. Which of the following section deals with this exception?

Section 110

Mr. X resident of Pakistan earned income from Property situated in London Rs. 50,000 but received in India. Which of the following is right for the above scenario?

Mr. X being resident of Pakistan Rs. 50,000 will be added in Gross total income

Mr. X being resident of Pakistan Rs. 50,000 will be subtracted in Gross total income

Mr. X being resident of Pakistan Rs. 50,000 will be claimed as admissible deduction

Mr. X being resident of Pakistan Rs. 50,000 will be exempted

Recognized provident fund is recognized by

Income tax officer

Central board of revenue

Commissioner of income tax

Which one of the following is main difference between the tax and fee?

Imposing authority

Entitlement of Counter benefit

Mode of payment

Which of the following is the External aid for the interpretation of tax laws?

Non-Obstinate clause

Title of a chapter

Finance Minister’s budget speech

Mr. Ali is an employee of ABC Co. He has availed an interest free loan from his Company. What will be the treatment of Interest on loan as per Income Tax Ordinance 2001?

Salary of Ali includes the Interest on loan at benchmark rate

Salary of Ali includes the Interest on loan at lower than benchmark rate

Salary of Ali includes the Interest on loan at higher than benchmark rate

Amount of Interest on loan is exempted from Tax

What will be the tax treatment of motor vehicle provided partly for official and partly for personal use?

5% of cost (vehicle)

10% of cost (vehicle)

15% of cost (vehicle)

25% of cost (vehicle)

Which one of the following sections defines minimum tax on resident companies?

Section 113

Mr. A resident of Pakistan received interest on Australian Bonds Rs. 100,000 (half amount received in Pakistan). What is the treatment of this amount for calculating his gross total income?

Rs. 100,000 added in his total income

Rs. 100,000 subtracted from his total income

Rs. 50,000 added in his total income

Exempt from tax

Concessional loan of Rs 1 million provided by employer @ of markup of 6% per annum (bench mark rate for tax year 2010 is 12% per annum), what will be the amount added back?

What is the time period given to a taxpayer to file a revised return?

Members of income tax appellate tribunal are appointed by which of the following authorities?

Provincial Government

Income Tax Department

Federal Government

Judicial Commission

The rate of income tax for Modarba Company is:

25%

Statutory provident fund is also known as:

Recognized provident fund

Unrecognized provident fund

Government provident fund

None of the given options

Which one of the following specifies the rates of depreciation?

Part I of 3rd schedule

Part II of 3rd schedule

Part III of 3rd schedule

None of the given options

Which of the following section deals with the residential status of Individual?

Mr. A non-resident of Pakistan received interest on Australian Bonds Rs. 100,000 (half amount received in Pakistan). What is the treatment of this amount for calculating his gross total income?

Rs. 100,000 added in his total income

Rs. 100,000 subtracted from his total income

Rs. 50,000 added in his total income

Exempt from tax

Profit and gains arising out of speculation business is chargeable to tax under

Income from salary

Income from other sources

Income from business

Income from capital gains

If an individual has taxable income Rs. 90,000, what will be the tax rate applied?

Nil

Which of the following is the rate of tax for salaried Individuals (male) for tax year 2010, where the taxable income does not exceed Rs. 200,000?

0.50%

On which of the following deduction is allowed from taxable income under the head income from business?

Any entertainment expenditure

Any personal expenditure

Expenditure incurred by an amalgamated company

Which of the following section defines deductions allowed in computing income from business?

_____________ is the payment to the holder for the right to use property such as a patent, copyrighted material, or natural resources.

Permanent Establishment

As per clause 13(iii) of the part 1 of second schedule, if gratuity fund is approved by CBR, the amount of fund exempted up to Rs. 200,000 and any amount exceeding it will be taxed in which of the following way?

Salary Income

Income from Business

Which of the following come under the ambit of Royalty under section 2 (54)?

Right to use any patent

Copy right of a literary

Right to use any industrial or scientific equipment

All of the given options

Profit earned on debts is chargeable under

Select correct option:

Income from salary

Income from other sources

Income from business

Income from capital gains

Which one of the following principle of tax emphasized, that the taxation policy should be designed in such a way to boost business atmosphere and the investment environment

in the country?

Select correct option:

Capacity to Pay

Business friendly

Miss Sonia’s total taxable income for the year 2010 is Rs. 260,000. Which of the following is the tax liability of Miss Sonia?

Nil

In Income Tax Ordinance 2001 tax concessions meant for which of the following?

Reduction in tax liability

Reduction in tax rate

Reduction in taxable Income

All of the given options

Question # 6 Which of the following is the deductible allowance from the income of an individual?

Worker’s Welfare Fund

Work’s Participation Fund

All of the given options

In which of the following heads of Income No deductions are allowed:

Income from Property

Income from Business

Mr. A is an employee of ABC Co. The company has provided a driver and a gardener to Mr. A. What will be the tax treatment of their salaries under section 13 of Income Tax Ordinance 2001?

These salaries, will be added in the salary of Mr. A

These salaries will be subtracted from the salary of Mr. A

These salaries have no relation with the salary of Mr. A

These Salaries will be exempted from Tax

Income tax ordinance, 2001 became effective from which of the following date?

13th September 2001

1st July 2002

13th September 2002

Mr. A non-resident person employed in UK received Rs. 500,000 as salary. Which of the following statement is true for Mr. A?

Rs. 500,000 will be added in Gross total income being non resident person

Rs. 500,000 will be subtracted from Gross total income being non resident person

Rs. 500,000 will be exempt from tax being non resident person

None of the given options

Total income of a person for a tax year shall be the sum of the person’s income under which of the following head?

Only Income from salary

Only Income from Business

Only Income from Property

All of the given options

Suppose a money lender give loan to a farmer of Rs. 100,000. After the due time the farmer pay back the loan in shape of agriculture produce amounting Rs. 110,000 to money lender. What will be the tax treatment of Rs. 110,000?

Tax will be charged only on Rs. 100,000

Tax will be charged only on Rs. 10,000

Tax will be charged only on Rs. 110,000

Exempt as Agriculture Income

Which of the following is similar to the concept of clubbing of Incomes?

Unification only two heads of Income

Association of two or more heads of Income

Splitting up of only two heads of Income

Division of two or more than two heads of Income

The Chairman of CBR has the responsibility for which of the following measures?

Formulation and administration of fiscal policies

Levy and collection of federal taxes

Quasi-judicial function of hearing of appeals

All of the given options

Pride of performance awarded by President is exempt from tax. Under which section it is treated in Income Tax ordinance 2001?

Which of the following expression is used in computing tax credit?

What is the residential status of Provincial Government of Pakistan?

Resident Individual

Resident Company

Which of the following is included in the Scheme of the Income Tax Ordinance 2001?

All of the given options

Agricultural income includes which one of the following?

Dividend paid by a company out of its agriculture income

Income from fisheries

Royalty income of mines

Share of profit of a partner from a firm engaged in agricultural

Mr Ali is an employee of ABC Co. the company has provided a driver and a gardener to Mr. Ali. What will be the treatment of their salaries as per Income Tax Ordinance 2001?

The salaried paid to them added in the salary of MR. Ali

The salaried paid to them subtracted in the salary of MR. Ali

Have no relation with salary of Mr. Ali

The Salaried paid are exempted from Tax

Which of the following is the legal status of Al-Habib Bank Limited under section 80 of the ordinance?

Banking Company

Hindu Undivided Family

Profit on debt shall be Pakistan-source income if it is:

Paid by a resident person

Paid by the resident person from business carried on outside Pakistan through a permanent establishment

Paid by non-resident person

All of the given options

What is the tax treatment of losses from the foreign source under section 104 of the ordinance?

Deductible expenditure

None of the given options

Loss can be carried forward up to how many years?

Which of the following person fulfilled the criteria of a Taxpayer?

Any representative of a person who derives an amount chargeable to tax

Any person who is required to deduct or collect tax

Any person required to furnish a return of income

All of the given options

The age of senior citizen was 65years and now amended to 60years which of the following finance act substituted 65 to 60years?

Finance Act 2005

Finance Act 2006

Finance Act 2007

Finance Act 2008

Mr. X resident of Pakistan remittance from UK received Rs. 20,000 in Pakistan from past profits. Which of the following is right for the above scenario?

Mr. X being resident of Pakistan Rs. 20,000 will be added in Gross total income

Mr. X being resident of Pakistan Rs. 20,000 will be Subtracted in Gross total income

Mr. X being non-resident of Pakistan Rs. 20,000 will be added in Gross total income

None of the given options

Which of the following tax is payable on merchandise imported or exported from one country to another?

Custom duty

Which of the following is an example of Lump sum receipt?

Golden shake hand

All of the given options

Income from lease of tangible movable property is chargeable to tax under

Income from property

Income from other sources

Income from business

Income from capital gains

Question # 4 Which of the following is the general formula for calculating tax credits?

(A / B) x C

In the normal circumstances on which of the following tax is charged?

Taxable Income

Approval of Gratuity fund can be withdrawn on which of the following grounds?

On the expiry of time period

On the death of the employee

On the malfunctioning of the trust

On the death of trustee

In a tax _____ you give information about what you earn every year.

What is the tax treatment of any profit on the US Dollar Bonds purchased by the non resident person before December 1999 under clause 82 of the Second Schedule?

Not mention in second schedule

Sec. 02 of Income Tax Ordinance 2001 defined: “Appellate Tribunal means the Appellate Tribunal established under section 130” In which criteria the above definition falls?

Exclusive definition

Inclusive definition

Both Exclusive and Inclusive definitions

Statutory definition

Taxes are important instrument of which of the following policy?

Monetary policy

Fiscal policy

Economic Policy

Which of the following income is chargeable to tax?

Gross income from business

Income computed in line with provisions of Ordinance

Only basic salary of salaried person

Basic salary excluding allowances of a salaried person

Which one of the following principles of tax emphasized, that the taxation policy should be designed in such a way to boost business atmosphere and the investment environment in the country?

Capacity to Pay

Business friendly

Which of the following is the Special Accounting Year of Companies exporting rice?

1st January to 31st December

1st July to 30th June

1st October to 30th September

1st September to 31st August

It is mandatory for each Company to maintain its books of accounts on which of the following methods?

Accrual basis

Both cash and accrual basis

Free to choose any kind of base

Question # 11 Which one of the following is the general definition of tax?

Compulsory contribution of wealth by persons

Optional contribution of wealth by persons

Compulsory contribution of wealth by state

Optional contribution of wealth by state

M/s ABC & Co. has been incorporated under Pakistan Companies Ordinance 1984.However its most of the branches are operated out of Pakistan? What will be the residential status of M/s ABC & Co.?

Resident Company

Non- Resident Company

Resident Individual

_______ are a form of excise levied when a commodity is sold to its final consumer.

Corporation tax

Federal government has been empowered vide section 53 (2) and (3) to make

Amendments in the second schedule by:

Select correct option:

Adding any clause or condition therein

Omitting any clause or condition therein

Making any change in any clause or condition therein

All of the given options

Any dividend is Pakistan source income if it is paid by which of the following?

Select correct option:

By resident Company

By non resident Company

By resident Individual

By resident AOP

Which of the following section deals with the residential status of Person?

Which of the following section deals with the residential status of Company?

Select correct option:

Which of the following methods of accounting is compulsory to adopt for Soleproprietorship?

Both accrual and cash bases

Free to choose any kind of base

Which of the following is not included in business?

Tax year for the salaried individuals is called as:

Special Tax Year

Normal Tax Year

A firm ABC maintaining its account in cash basis, at June 27, 2008 it is entitled to receive Rs. 10,000 but actual payments made at 01 August 2008. In which year it is charged to tax?

2009

Any amount received under Part 3 of Second Schedule, as flying allowance by pilots etc. and junior commissioned officers or other ranks shall be taxed at the rate of __________ as separate block.

2.50%

Condition for the approval of gratuity fund is based on which of the following?

Trust is irrevocable

Trust is revocable

Trust is established by Government

Trust is approved by Officer of Income Tax

Which of the following is the rate of tax for salaried Individuals for tax year 2010, where the taxable income exceeds Rs. 550,000 but does not exceed Rs. 650,000?

4.50%

Which of the following is the rate of tax for salaried Individuals for tax year 2010, where the taxable income exceeds Rs. 650,000 but does not exceed Rs. 750,000?

6.00%

Which of the following is the rate of tax for salaried Individuals for tax year 2010, where the taxable income exceeds Rs. 900,000 but does not exceed Rs. 1,050,000?

9.00%

MTS stands for which of the following?

Minimum time scale

Minimum transfer Salary

Maximum time scale

Maximum transfer Salary

Which of the following is tax, where the tax rate decreases as the amount to which the rate is applied increases?

Proportional tax

Progressive tax

Regressive tax

Mr. X employed in Pakistan earned pension from Pakistan Government but received in London Rs. 100,000. Which of the following is right for the above scenario?

Mr. X being resident of Pakistan Rs. 100,000 will be added in Gross total income

Mr. X being resident of Pakistan Rs. 100,000 will be subtracted in Gross total income

Mr. X being resident of Pakistan Rs. 100,000 will be added in total income after tax

Mr. X being non-resident of Pakistan Rs. 100,000 will be exempted

Concessional loan provided by the employer is taxable and added back to the income of employee. But under which of the following condition there is no need to add back such loan?

Loan used for the purchase of furniture

Loan used for the education of children

Loan used for the construction of house

Loan used for the purchase of shares

If a business carried on by Non-resident person in Pakistan through permanent establishment what will be the tax treatment of the traveling expenditures born by the non-resident for spending his holidays in his home land?

Wholly taxable due to PE

Wholly taxable as no concerned with PE in Pakistan

Not permissible as deduction from the income of Non-resident

None of the given options

What is the tax treatment of the leave encashment on the retirement of the employee?

Wholly Taxable

Income chargeable under the head “Income from Business” derived by a Provincial Government or local authority from a business carried on outside its jurisdictional area, will be:

Wholly taxable

Partially exempt

Section is silent about it

Which of the following is the Tax Treatment of utilities for the year 2010?

Wholly exempted

Exempt up to 10% of MTS

Exempt up to 45% of MTS

Gratuity pertaining to government employees received on retirement/ death of the employee. Which of the following is the tax treatment of gratuity under the Income Tax Ordinance 2001?

Wholly exempt

Partially exempt

None of the given options

Which of the following is the tax treatment of free hospitalization services provided under the terms of employment?

Wholly exempt

Exempt up to 10% of MTS

Taxable up to 10% of MTS

Gratuity received by a non-resident person is

Wholly exempt

50% of amount receivable

Gratuity Approved by Central Board of Revenue is

Exempt up to Rs. 200,000

50% of amount receivable

Income of the recognized vocational institution is

Exempt up to 50%

Partially taxable

Any Pakistan-source income which Pakistan is not permitted to tax under a tax treaty

shall be _______.

Wholly Exempt

Not mention in Ordinance

What is the tax treatment of income from the sale of Mudarba Certificates?

Wholly exempt

Partially taxable

Partially exempt

Question No: 41

What is the tax treatment of recognized Provident fund under section 2 (48) of part I of sixth schedule?

Partially taxable

Partially exempt

Question No: 7

What is the tax treatment of support payment received by spouse made under the agreement to live apart?

Wholly Exempt

Not mention in Ordinance

Question No: 41

Which of the following is the Tax Treatment of utilities for the year 2009?

Wholly taxable

Wholly exempted

Exempt up to 10% of MTS

Exempt up to 1% of MTS

Question No: 10

What is the tax treatment of the leave encashment of the armed forces of Pakistan on retirement made by the employer?

Wholly exempt

Not mention in Income Tax Ordinance 2001

What is the tax treatment of the reimbursement of expenditure made by the employer?

Select correct option:

Wholly Taxable

Not mentioned in Income Tax Ordinance 2001

Income of a Text-Book Board is

Select correct option:

Exempt up to 50%

None of the given options

What is the tax treatment of the salary of an employee of foreign government but citizen of Pakistan?

Exempt form tax

Wholly Taxable

No Tax treatment given in IT Ordinance 2001

Mr.John a non-resident received profit in Pakistan on a security issued by a resident person, how the profit will be treated under sec (46) of IT Ordinance 2001?

Wholly Taxable

None of the given options

Conveyance provided by employer for personal use of the employee is only taxed @ 5% of the cost to the employer for acquiring the vehicle or the fair market value of vehicle.

FALSE

A cash amount paid by a person as donation shall be taken into account only if it was paid by a crossed cheque drawn on a bank.

TRUE

Tax year for the salaried individuals is called as Special Tax Year.

FALSE

Payment of Zakat is entitled to a deductible allowance according to provisions of sec.60.

TRUE

Bonuses are fully taxable under Income Tax Ordinance 2001.

TRUE

Tax rate for taxable income for the tax year 2010 exceeding Rs 550,000 up to Rs 650,000 is 6.0% as given in the first schedule of Income Tax Ordinance 2001.

Select correct option:

FALSE

Gratuity is only granted in case of retirement.

FALSE

Gratuity is received by legal heirs, where employee dies before retirement the gratuity would be exempted in the hands of legal heirs of the deceased.

FALSE

Officer of Income Tax may grant approval to any gratuity fund.

FALSE

Gratuity will be ignored while computing taxable income and tax liability of a deceased person.

TRUE

Any obligation of employee waived off by employer will not be added back to his taxable income.

FALSE

Government provident fund is

Totally taxable

Partially taxable

Totally exempt

Partially exempt

Unrecognized provident fund is

Totally taxable

Partially taxable

Partially exempt

Pension received by a citizen of Pakistan is _____________from tax.

Partially taxable

Taxable 25% of the pension received

Totally exempt

Pension is treated as

Totally taxable

Partially taxable

Totally exempt

Partially exempt

Pension granted to disabled is treated as

Totally taxable

Partially taxable

Totally exempt

Partially exempt

Not mentioned in Income Tax Ordinance 2001

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