MIDTERM EXAMINZTION
Spring 2011
FIN623-Taxation Management
Shared By Muhammad Awais Zafar
Question No: 1( 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: 2 ( M a r k s: 1 ) http://vuzs.net
If the land situated in Pakistan and used for agriculture purposes then which of the
following factor make distinction between agriculture and non-Agriculture Income?
► Nationality of Pakistan
► Quantity of the product
► Time period
► Human effort
Question No: 3 ( M a r k s: 1 ) http://vuzs.net
Suppose a Profit acquired by a cultivator from the sale of standing crops or the
produce after harvesting.
The profit of the cultivator will be treated in which of the following way?
► Income from Business
► Agriculture Income
► Income from Property
► Capital Gain
Question No: 4 ( 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: 5 ( M a r k s: 1 ) http://vuzs.net
Any gain arising on the disposal of shares in a non-resident company belongs to
which of the following?
► Pakistan- source income
► Foreign source of income
► Both Pakistan and foreign source of income
► None of the given option
Question No: 6 ( M a r k s: 1 ) http://vuzs.net
Which of the following is the main objective of Fiscal Policy?
► Economic Development
► Price stability
► Removal of deficit in Balance of Payments
► All of the given options
Question No: 7 ( M a r k s: 1 ) http://vuzs.net
Which of the following is the example of inclusive definitions?
► Appellate Tribunal 2(2)
► Business 2(9)
► Association of Person 2(6)
► Debt 2(15)
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
Sources of Income are classified into _____ heads of income.
► 3
► 4
► 5
► 6
Question No: 10 ( M a r k s: 1 ) http://vuzs.net
What will be the tax treatment of foreign source salary received by a resident person?
► Wholly taxable
► Partly Taxable
► Wholly exempt
► Wholly exempt only if resident paid foreign tax on his salary
Question No: 11 ( 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: 12 ( M a r k s: 1 ) http://vuzs.net
Mr. Ali being citizen of Pakistan of 60 years old, if his total taxable income is
Rs.400,000. His tax liability will be reduced by ______ under Part 3 of second
schedule.
►10%
►25%
►50%
►75%
Question No: 13 ( M a r k s: 1 ) http://vuzs.net
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: 14 ( M a r k s: 1 ) http://vuzs.net
A directorship or any other office involved in the management of a company
under section 2(22) of Income Tax Ordinance, 2001 is termed as:
►Employment
►Employer
►Employee
►Business premises
Question No: 15( 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: 16 ( 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: 17 ( 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: 18( M a r k s: 1 ) http://vuzs.net
Which of the following is not an employment tax?
► Social Security Tax
► Federal Excise Tax
► Federal unemployment compensation tax
► State unemployment compensation tax
Question No: 19 ( M a r k s: 1 ) http://vuzs.net
If the accounting year of a business engaged in cotton ginning is started from 01
September 2003 and ending on 31st August 2004. What will be its tax year?
► Tax year 2002
► Tax year 2003
► Tax year 2004
► Tax year 2005
Question No: 20( M a r k s: 1 ) http://vuzs.net
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: 21 ( M a r k s: 1 ) http://vuzs.net
Which of the following was the First law on Income Tax promulgated in
Pakistan?
►1st July, 1979
►1st July, 1969
►1st July, 1949
►1st July, 2002
Question No: 22( M a r k s: 1 ) http://vuzs.net
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
Tax year for the salaried individuals is called as:
►Special Tax Year
►Normal Tax Year
►Fiscal Year
►Financial Year
Question No: 24 ( M a r k s: 1 ) http://vuzs.net
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 110
►Section 101
►Section 102
►Section 50
Question No: 25 ( M a r k s: 1 ) http://vuzs.net
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
Question No: 29 ( M a r k s: 3 )
If Mr. Kamal resident of Pakistan suffered a foreign loss against the income
received from foreign country in tax year. What is the treatment of such
foreign loss? Which section deals this kind of loss? Such losses can be
carried forward up to how many years?
Answer
Foreign losses Sec.104: Deductible expenditures incurred by a person in deriving foreign
source income chargeable to tax under a head of income shall be deductible only against
that income. Foreign losses carried forward up to 6 years.
Question No: 30 ( M a r k s: 3 )
What exemption granted under section 46 of IT Ordinance 2001?
Answer
Section 46 Profit on Debt
Any profit received by a non – resident person on a security issued by a resident person
shall be exempt from tax provided:
Persons not associates
Security widely issued by resident person outside Pakistan
Profit on security was paid outside Pakistan
Security approved by Central Board of Revenue (CBR)
Question No: 31 ( M a r k s: 5 )
Mr. Irfan resident of Pakistan received salary from UK. He has also paid tax on his
salary from UK as per the tax laws prevailing there. What will be the tax treatment
of his salary as a Pakistani resident? Which section of the income tax ordinance
deals this scenario?
Answer Foreign-Source Salary Income [102]
Mr. Irfan’s salary from UK would be exempted from tax, because he has paid tax on his
salary from UK. Under Foreign-Source Salary Income [section102] foreign source
salary income of a resident individual will be exempt from tax, if he has paid foreign
income tax in respect of such income. Payment of foreign tax means that the employer
has deducted the tax at source and deposited the same to the revenue authorities of the
country in which employment was exercised.
Question No: 32 ( M a r k s: 5 )
Why the right to acquire share is not chargeable to tax under Employee Share
Scheme section 14. Under what condition the right to acquire share under section
14 is taxable?
