MIDTERMEXAMINATION
Spring 2010 Paper
FIN623- Taxation Management (Session - 5)
Time: 60 min
M a r k s: 44
Question No: 1( M a r k s: 1 )http://vuzs.net
In the canons of taxation, which one of the following statements best describe the benefits principle?
►Persons deriving more income leads to enjoy less benefits from the state, should be taxed at the lower rates.
►Persons deriving more income leads to enjoy less benefits from the state, should be taxed at the higher rates.
►Persons deriving less income leads to enjoy more benefits from the state, should be taxed at the lower rates.
►All persons deriving more or less income should be taxed at the same rates.
Question No: 2( M a r k s: 1 )http://vuzs.net
Law making is the prime responsibility of which of the following authorities?
► Parliament
► Supreme Court
► High Court
► City Court
Question No: 3( M a r k s: 1 )- Please choose vuzs one
Which one of the following is the Internal aid and help in the interpretation of law?
►Punctuation marks
►CBR’s circulars
►Definitions in other statutes
►Departmental manuals
Question No: 4( M a r k s: 1 )http://vuzs.net
Section 2(5A) of Income Tax Ordinance 2001 defined:
“assessment year” means assessment year as defined in the repealed Ordinance.
In which criteria the above definition falls?
► Exclusive definition
► Inclusive definition
► Both Exclusive and Inclusive definitions
► Statutory definition
Question No: 5( M a r k s: 1 )http://vuzs.net
Section 2(13) of Income Tax Ordinance 2001 defined:
“Commissioner” means a person appointed as a Commissioner of Income Tax under section 208, and includes a taxation officer vested with all or any of the powers, and functions of the Commissioner;
In which criteria the above definition falls?
►Exclusive definition
► Inclusive definition
► Both Exclusive and Inclusive definitions
► Statutory definition
Question No: 6( M a r k s: 1 )http://vuzs.net A definition also includes the dictionary meanings of the word is termed as which of the following?
►Exclusive definition
► Inclusive definition
► Both Exclusive definition and Inclusive definitions
► Statutory definition
Question No: 7( M a r k s: 1 )http://vuzs.net
2(22) of Income Tax Ordinance 2001 defined:
“Employment” includes:
·a directorship or any other office involved in the management of a company;
·a position entitling the holder to a fixed or ascertainable remuneration; or
·the holding or acting in any public office;
In which criteria the above definition falls?
► Exclusive definition
► Inclusive definition
► Both Exclusive and Inclusive definitions
► Statutory definition
Question No: 8( M a r k s: 1 )http://vuzs.net
The _____ year is a period of twelve months arbitrarily chosen for tax purposes.
► Economic
► Fiscal
► Economy
► Monetary
Question No: 9( M a r k s: 1 )http://vuzs.net
Which of the following is the legal status of the Punjab University under the provisions of section 80 of the ordinance?
► Individual
► Company
► Banking Company
► Hindu Undivided Family
Question No: 10( M a r k s: 1 )http://vuzs.net
Which of the following is the example of deemed income?
► Cash Gift
► Loan through cross cheque
► Salary
► Golden hand shake
Question No: 11( M a r k s: 1 )http://vuzs.net
Which of the following is NOT an example of deemed income?
►Loan through cross cheque
►Gifts through proper transaction
► Golden hand shake
► All of the given options
Question No: 12( M a r k s: 1 )http://vuzs.net
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: 13( M a r k s: 1 )http://vuzs.net
Which of the following is NOT an example of Lump sum receipt?
► Pension
► Golden shake hand
► Provident fund
► Salary
Question No: 14( M a r k s: 1 )http://vuzs.net
Which of the following methods of accounting is compulsory to adopt for Firm?
► Accrual Basis
► Cash Basis
► Both Accrual and Cash Basis
►Free to choose any kind of base
Reference: Adoption rule of accounting methods are as under:
For Companies –Accrual basis mandatory.
For Others --- optional, cash or Accrual Basis
Question No: 15( M a r k s: 1 )http://vuzs.net
The process of clubbing of income results in which of the following?
► 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
As a result of clubbing, higher tax bracket will be charged to "the person, to whom this income is clubbed" . In this mcq, it is not clear whose tax bracket will be affected.
There is counter effect on tax bracket. Let say,
If wife clubbed her income with her husband 's income then her husband's income will be increased and he will definitely fall into higher tax bracket and wife will do it for saving herself from higher tax bracket.
Thus , her tax bracket will be decreased or will not be increased due to that transferred income
Question No: 16( M a r k s: 1 )http://vuzs.net
Any salary received by an employee of a foreign government for services rendered to such government shall be exempt from tax under which section of IT Ordinance 2001?
► Section 40
► Section 43
► Section 47
► Section 53
Question No: 17( M a r k s: 1 )http://vuzs.net
Rate charged under presumptive tax regime to non resident shipping firm 8% on its gross receipt is quite low as compare to other business. This is an example of which type of tax concession?
► Reduction in total taxable income
► None of the given options
►Reduction in tax liability
► Reduction in tax rate
Question No: 18( M a r k s: 1 )http://vuzs.net
What is the tax treatment of any profit on the US Dollar Bonds purchased by the resident person after December 1999 under Second Schedule?
► Wholly exempt
► Wholly taxable
► Tax @10% of profit paid
► Not mention in second schedule
Question No: 19( M a r k s: 1 )http://vuzs.net
Which of the following section deals with the residential status of Company?
►Section 81
► Section 82
► Section 83
► Section 84
Question No: 20( M a r k s: 1 )- Please choose vuzs one
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
Question No: 21( M a r k s: 1 )http://vuzs.net
Sale of goods through permanent establishment in Pakistan by a non-resident 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
Question No: 22( M a r k s: 1 )htt
Rental income shall be Pakistan-source income if it is derived from:
► The lease of immovable Property in Pakistan
► The lease of immovable Property outside Pakistan
► The lease of immovable Property both in and out of Pakistan
► None of the given options
Question No: 23( M a r k s: 1 )http://vuzs.net
Which of the following does Not come under the ambit of permanent establishment (PE)?
► Branch office
► Factory or workshop
► Premises for soliciting orders
► Liaison or relationship office
Question No: 24( M a r k s: 1 )http://vuzs.net
Mr. Ali resident of Pakistan received salary form UK? What will be the tax treatment of his salary in Pakistan?
► Wholly taxable
► Partly Taxable
► Wholly exempt
► Wholly exempt only if resident paid foreign tax on his salary
Question No: 25( M a r k s: 1 )http://vuzs.net
What is the relation between the Non-resident and permanent establishment as per section 105?
►Both have same legal entity
► Both are separate legal entity
► Both are dependent on each other
► None of the given options
Question No: 26( M a r k s: 1 )http://vuzs.net
What is the tax treatment of losses from the foreign source under section 104 of the ordinance?
► Wholly taxable
► Partly Taxable
►Deductible expenditure
► None of the given options
Question No: 27( M a r k s: 1 )http://vuzs.net
Which of the following section of Income Tax Ordinance 2001 deals with Income from Salary and its treatment?
► Section 11
► Section 12
► Section 13
► Section 14
Question No: 28( M a r k s: 1 )http://vuzs.net
Mr. A non-resident of Pakistan received interest on Canadian Bonds Rs. 150,000 (entire amount received in Pakistan). What is the treatment of this amount for calculating his gross total income?
► Rs. 150,000 added in his total income
► Rs. 150,000 subtracted from his total income
► Rs. 75,000 added in his total income
► Exempt from tax
Question No: 29( M a r k s: 3 )
What is meant by reduction in tax liability? Give an example from Income Tax ordinance 2001?
Question No: 30( M a r k s: 3 )
Define the employment as per its respective sections.
Question No: 31( M a r k s: 5 )
Define the following under the Income Tax Ordinance 2001 with their respective sections:
a.Resident Individual
b.Resident Associations of Persons
Question No: 32( M a r k s: 5 )
Mr. Bajwa resident of Pakistan received salary from UK. He claimed that he has also paid foreign tax in respect of his salary in UK. How his claimed will be verified and what is the tax treatment of his salary under which section of the income tax ordinance deals this scenario?
