Which of the following may grant approval to any gratuity fund?
Select correct option:
a)Federal Tax Ombudsman
b)Federal Government
c)Superior judiciary
d)Commissioner of Income Tax (55)
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?
Select correct option:
a)Mr. X being resident of Pakistan Rs. 20,000 will be added in Gross total income
b)Mr. X being resident of Pakistan Rs. 20,000 will be Subtracted in Gross total income
c)Mr. X being non-resident of Pakistan Rs. 20,000 will be added in Gross total income
d)None of the given options (33)
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?
Select correct option:
a)Wholly exempt (55)
b)Partially exempt
c)Wholly taxable
d)None of the given options
Approval of Gratuity fund can be withdrawn on which of the following grounds?
Select correct option:
a)On the expiry of time period
b)On the death of the employee
c)On the malfunctioning of the trust
d)On the death of trustee
Which of the following is the tax treatment of free hospitalization services provided under the terms of employment?
Select correct option:
a)Wholly exempt (48)
b)Wholly taxable
c)Exempt up to 10% of MTS
d)Taxable up to 10% of MTS
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?
Select correct option:
a)Added in total income (33)
b)Subtracted from the total income
c)Added in income after tax
d)Exempt from tax
______is the payment to the holder for the right to use property such as a patent, copyrighted material, or natural resources.
Select correct option:
a)Permanent Establishment
b)Royalty
c)Dividend
d)Goodwill
- ______are a form of excise levied when a commodity is sold to its final consumer.
- Corporation tax
- Property tax
- Sales Tax
- Excise
- An individual shall be a resident individual for a tax year if the individual is present in Pakistan for a period of:
- 143 Days
- 153 Days
- 173 Days
- 183 Days
3.For the calculation of the period of stayed in Pakistan, which of the following days are considered as full day?
a.Day of departure
b.Day of arrival
c.A Public Holiday
d.All of the given options
4.According to Theory of Control and Management, a resident company must have:
a.Its incorporation in Pakistan
b.Its Registered Office in Pakistan
c.Its most of the branch lies in Pakistan
d.Its Control and Management of affairs lies in Pakistan
- Which of the following is not a geographical source of income?
- Salary paid by the Federal Government
- A dividend paid by a resident company
c.Business income derived from any business carried on in Pakistan
- None of the given options
- Permanent establishment in relation to a person means a fixed place of business through which the business of the person is ______carried on.
- Wholly
- Partly
- Both Wholly & Partly
- None of the given options
- ______is the payment to the holder for the right to use property such as a patent, copyrighted material, or natural resources.
- Permanent Establishment
- Royalty
- Dividend
- Tax
- Any foreign-source salary received by a resident individual shall:
- be exempt from tax if the individual has paid foreign income tax
- be exempt from tax if the individual has not paid foreign income tax
- Not be exempted from tax in any case
- Always be Exempt from tax in all cases
9.Which of the following deductions allowed in computing the income of a permanent establishment in Pakistan of a non-resident person chargeable under the head “Income from Business”:
- Any insurance premium paid by the non-resident person in respect of any debt.
- Any salary paid to an employee employed by the head office outside Pakistan.
- Any other expenditure which may be prescribed.
- No deduction allowed in any case.
- Among the Canon of taxes, benefit principal suggest that:
- Derive more income but enjoy less benefits from the state should be taxed at the lower rates
- Derive more income but enjoy less benefits from the state should be taxed at the higher rates
- Those persons who derives less income but more benefits from State should be taxed at lower rates
- None of the given options
1). If taxable income of an individual is Rs. 1,211,200, then his tax liability is:
a. Rs. 254,352
b. Rs. 211,960
c. Rs. 181,680
d. Rs. 151,400
2). A Provident Fund recognized by the commissioner in accordance with Part I of Sixth Schedule is called:
a. Statutory Provident Fund
b. Recognized Provident Fund
c. Unrecognized Provident Fund
d. All of the given options
3). Utilities were exempt 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:
a. Finance Ordinance, 2004
b. Finance Ordinance, 2005
c. Finance Act, 2006
d. Finance Act, 2007
4). Which of the followings are admissible deductions available before tax year 2007?
a. Allowance for Repair
b. Property tax.
c. Unpaid rent (irrecoverable rent)
d. All of the given options
5). Statutory Provident Fund, governed by the:
a. Finance Act 2006
b. Insurance Act 1969
c. Provident Funds Act 1925
d. Finance Bill 2007
6). ______on account of cancellation of sale agreement of building shall be treated as rental income and fully taxable.
a. Fair market rent
b. Forfeited amount
c. Rent collection charges
d. Penalty
7). A tax payer is required to have a national tax number commonly referred as:
a. NTN
b. NIC
c. CNIC
d. None of the given option
8). If income of an individual received under the head income from property, is Rs. 470,000, then his tax liability is:
a. Rs. 23,500
b. Rs. 47,000
c. Rs. 70,500
d. Rs. 94,000
9). Which of the following is the tax treatment for Income from property received as a rent for the year?
a. 1 /4 of the rent is deduct able as repairs allowance
b. 1 /2 of the rent is deduct able as repairs allowance
c. 1 /5 of the rent is deduct able as repairs allowance
d. No deduction is allowed
10). GP fund available in the Government Organization is also called:
a. Statutory Provident Fund
b. Recognized Provident
c. Unrecognized Provident Fund
d. All of the given options
Note: Q # 9 option (c) is right for the tax year 2006 and as per amendment in Finance Act 2006 option (d) is right for tax year 2007.
1) Which one of the following is main difference between the tax and fee?
A. Imposing authority
B. Applied Rates
C. Entitlement of Counter benefit
D. Mode of payment
2) Which of the following is the main tool of Fiscal Policy?
A. Taxes
B. Deficit Financing
C. Subsidies
D. Transfer Payments
3) Which one of the canon of taxation suggests easiness in time of payment and mode of collection of tax?
A. Simplicity
B. Convenience
C. Certainty
D. Capacity to Pay
4) Which of the following is tax, where the tax rate decreases as the amount to which the rate is applied increases?
A. Proportional tax
B. Progressive tax
C. Regressive tax
D. Corporate tax
5) The Chairman of CBR has the responsibility for which of the following measures?
A. Formulation and administration of fiscal policy
B. Levy and collection of federal taxes
C. Quasi-judicial function of hearing of appeals
D. All of the given options
6) Which of the following is the External aid to interpretation of tax laws?
A. Preamble
B. Title of a chapter
C. Non-Obstinate clause
D. Finance Minister’s budget speech
7) A definition that includes the dictionary meanings of the word is termed as:
A. Exclusive definition
B. Inclusive definition
C. Both Exclusive and Inclusive definitions
D. Statutory definition
8) Special tax year is adopted after seeking approval from the ______under section 74(3).
A. Commissioner
B. Tax Officer
C. Appellate Tribunal
D. Supreme Court
9) Which of the following is the legal status of Al-Habib Bank limited under section 80 of the ordinance?
A. Individual
B. Banking Company
C. Hindu Undivided Family
D. Firm
10) Which of the following income is chargeable to tax?
A. Gross income from business
B. Income computed in line with provisions of Ordinance
C. Only basic salary of salaried person
D. Basic salary excluding allowances of a salaried person
1. Agriculture income means an income derived by a person from:
a. Agri-business
b. land situated in Pakistan and used for any purpose
c. land situated outside Pakistan
d. land situated in Pakistan and used for agriculture purpose
2. Which of the following is the best treatment of any “Pakistan Source Income” of a
resident of Pakistan?
a. Wholly Taxable
b. Wholly Exempt
c. Partially exempt
d. None of the given options
3. Which one of the following condition must be satisfied for a resident AOP?
a. AOP must be registered in Pakistan
b. Owners of AOP must be resident of Pakistan
c. Control and management of AOP is situated wholly or partly in Pakistan
d. Control and management of AOP lies outside Pakistan
4. Which one of the following sources of income of a Non-resident is taxable in Pakistan?
a. Pakistan Source Income only
b. Foreign Source Income only
c. Both Pakistan and Foreign Source Income
d. Receipt of any Income in Pakistan
5. Mr. Kamran is a pilot in air force; his salary will be taxed from a separate block, which one of the following rates will be applied to him?
a. 2.0%
b. 2.5%
c. 3.0%
d. 3.5%
6. Which one of the following conditions must be fulfilled by XYZ Co. in order to become Pakistan Resident Company under Income Tax Ordinance 2001?
a. Most of it’s branches located in Pakistan
b. Control and management is situated wholly in Pakistan
c. Control and management is situated partly in Pakistan
d. Owners of the company must be resident of Pakistan
7. For the calculation of residential status of an individual, which of the following day is considered as whole day?
a. Day of arrival
b. Day of departure
c. Day of leave including sick leave
d. All of the given options
8. Under which one of the following conditions a profit can be Pakistan Source Income?
a. It is paid by Non-resident Person
b. It is received by Resident Person through permanent establishment outside Pakistan
c. Borne by Non-resident through permanent establishment in Pakistan
d. It is paid to non resident person through permanent establishment out side Pakistan
9. Under which one of the following conditions a Business Income can be “Pakistan Source Income”?
a. Income derived from any business carried on in Pakistan
b. Income derived by Non resident through permanent establishment in Pakistan
c. Any remuneration paid by resident of Pakistan
d. All of the given options
10. ______means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
a. Franchise
b. Permanent establishment
c. Small Business Units (SBU)
d. Venture
Which one of the following policy have taxes as an important instrument?
a)Monetary policy
b)Fiscal policy (1)
c)Trade Policy
d)Economic Policy
Which one of the following is the main source of revenue generation of the state?
a)Taxes
b)Tariffs
c)Internal Borrowing
d)Penalties & Fines
In the canon of taxation, which one of the following statements best describe the benefits principle?
a)Persons deriving more income leads to enjoy less benefits from the state, should be taxed at the lower rates (2)
b)Persons deriving more income leads to enjoy less benefits from the state, should be taxed at the higher rates
c)Persons deriving less income leads to enjoy more benefits from the state, should be taxed at the lower rates
d)All persons deriving more or less income should be taxed at the same rate
Which one of the following is NOT the type of tax?
a)Direct Taxes
b)Indirect Taxes
c)Value Added Taxes
d)Federal Taxes (3)
Which one of the following is the Special Accounting Year of the Insurance Companies?
a)1st January to 31st December (11)
b)1st July to 30th June
c)1st October to 30th September
d)1st September to 31st August
Which one of the following is the legal status of Mr. Z a Director in Private Company under section 80 of the Income Tax Ordinance 2001?
a)Individual (16)
b)Company
c)Hindu Undivided Family
d)AOP
Mr. Ali is 60 years old and being a citizen of Pakistan, if his total taxable income is Rs. 400,000. His tax liability will be reduced by ______under Part 3 of second schedule.
a)10%
b)25%
c)50%
d)75%
Mr. Khan is an employee of ABC Co. the company has provided a driver and a gardener to him. What will be the treatment of their salaries as per Income Tax Ordinance 2001?
a)Salaries paid to them added in the salary of Mr. Khan
b)Salaries paid to them subtracted from the salary of Mr. Khan
c)Have no relation with salary of Mr. Khan
d)Salaries paid to them are exempted from Tax
Which one of the following is an example of tax evasion?
a)Mr. Javed transfers stock to his grandchildren so that the dividend income is included in their taxable income
b)Mis Saima sells her corporate bonds and reinvests the proceeds in tax exempt municipal bonds
c)Imran wins $500 at beach bingo and does not report the income on his tax return
d)Khuram invests in an apartment that expects to show losses for the next three years
Mr. Suleman is an employee of ABC Co. utilities are provided by Company to him for the tax year 2007. What will be the treatment of Utilities as per Income Tax Ordinance 2001 in the tax year 2007?
a)Utilities paid are added in the salary of Mr. Suleman
b)Fair market value of Utilities is added in the salary of Mr. Suleman
c)10% of Utilities is exempted from tax and remaining amount will be added in the salary of Mr. Suleman
d)Utilities paid are exempted from Tax
Simplicity principle implies that taxation system should be plain, and easily understandable by the tax payer.
a)True
b)False
Provincial Government can issue administrative instructions explanations/circulars under the powers vested through Sec 206 and 213.
a)True (5)
b)False
Scholarship granted to a person to meet the cost of person’s education shall be exempt from tax under Section 45 of Income Tax Ordinance 2001.
a)True
b)False
Part 2 of the Second Schedule of Income Tax Ordinance 2001 deals with reduction in Tax Rates.
a)True
b)False
Mr. Akbar a resident individual received Dividends in Tokyo from a Pakistani resident company. Dividend will be added in his gross total income.
a)True
b)False
Which of the following is not the type of tax?
Select correct option:
a)Direct taxes
b)Indirect Taxes
c)Value Added Taxes
d)Fees and Penalties
Which of the following income is chargeable to tax?
Select correct option:
a)Gross income from business
b)Income computed in line with provisions of Ordinance
c)Only basic salary of salaried person
d)Basic salary excluding allowances of a salaried person
Which of the following is the tax where the tax rate remained fixed to the amount on which the rate is applied increases?
Select correct option:
a)Proportional tax
b)Progressive tax
c)Regressive tax
d)Corporate tax
Which of the following is the important content for calculating tax on income?
Select correct option:
a)Taxable Income
b)Residential Status
c)Tax Year
d)All of the given options
Income tax ordinance, 2001 became effective from which of the following date?
Select correct option:
a)1st July 2001
b)13th September 2001
c)1st July 2002 (5)
d)13th September 2002
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?
Select correct option:
a)2006
b)2007
c)2008
d)2009
Which of the following methods of accounting is compulsory to adopt for Sole-proprietorship?
Select correct option:
a)Accrual Basis
b)Cash Basis
c)Both accrual and cash bases
d)Free to choose any kind of base
Special tax year is adopted after seeking approval from the ______under section 74(3).
Select correct option:
a)Commissioner
b)Tax Officer
c)Appellate Tribunal
d)Supreme Court
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:
a)2006
b)2007
c)2008
d)2009
Which of the following tax is paid in relation to how much you earn?
Select correct option:
a)Income Tax
b)Inheritance Tax
c)Value added Tax
d)Sales Tax
Total income of a person for a tax year shall be the sum of the person’s income under which of the following head?
Select correct option:
a)Only Income from salary
b)Only Income from Business
c)Only Income from Property
d)All of the given options (17)
_____ tax is paid from money you have received from someone who has died.
Select correct option:
a)Income
b)Inheritance
c)Property
d)Sales
Which part of Income Tax Ordinance 2001 deals with the Exemptions and Tax Concessions?
Select correct option:
a)Part IV
b)Part V
c)Part VI
d)Part VII
Which of the following is the Special Accounting Year of Companies exporting rice?
Select correct option:
a)1st January to 31st December (11)
b)1st July to 30th June
c)1st October to 30th September
d)1st September to 31st August
Which of the following is the legal status of Al-Habib Bank Limited under section 80 of the ordinance?
Select correct option:
a)Individual
b)Firm
c)Banking Company
d)Hindu Undivided Family
Person Sec. 2(42) does not includes which of the following?
Select correct option:
a)An Individual
b)The Federal Government
c)Public International Organization
d)None of the given option
Interpretation of Tax Laws is the prime responsibility of which of the following?
Select correct option:
a)Parliament
b)Supreme Court
c)High Court
d)Superior Judiciaries
Federal government has been empowered vide section 53 (2) and (3) to make amendments in the second schedule by:
Select correct option:
a)Adding any clause or condition therein
b)Omitting any clause or condition therein
c)Making any change in any clause or condition therein
d)All of the given options (18)
Expenses entitled to be paid by a Company, then entry of such expenses will be made in the books of accounts if:
Select correct option:
a)Company maintaining its books of account on Cash basis
b)Company maintaining its books of account on Accrual basis
c)Company maintaining its books of account on Both Accrual and Cash basis
d)None of the given options
Achieving full employment level is one of the objectives of which of the following policy?
Select correct option:
a)Monetary policy
b)Fiscal policy (2)
c)Trade Policy
d)Economic Policy
Which of the following is the example of deem income?
Select correct option:
a)Cash Gift
b)Salary
c)Loan through cross cheque
d)Golden hand shake
Which of the following is a literal meaning of tax?
Select correct option:
a)Burden