FINALTERM EXAMINATION
Spring 2009
FIN623- Taxation Management (Session - 1)
Marks: 81
Question No: 1 ( Marks: 1 ) - Please choose one
__________ is a type of tax where the tax rate increases as the income to which
the rate is applied increases.
Proportional tax
Progressive tax
Regressive tax
Corporate tax
Question No: 2 ( Marks: 1 ) - Please choose one
If the accounting year of Mr. Aslam, a rice exporter is started from 01 January
2005 and ending on 31st December 2005 . What will be its tax year?
Tax year 2003
Tax year 2004
Tax year 2005
Tax year 2006
Question No: 3 ( Marks: 1 ) - Please choose one
In case of lump sum receipt of income like Golden hand shake the tax payer pays tax in which of the following way?
Average of last 3 years tax rate
Option to choose current or average of last 3 years tax rate
Current tax rate
Previous year tax rate
Question No: 4 ( Marks: 1 ) - Please choose one
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
Question No: 5 ( Marks: 1 ) - Please choose one
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? By: Adeel Abbas, www.allvupastpapers.blogspot.com
Income from Business
Agriculture Income
Income from Property
Capital Gain
Question No: 6 ( Marks: 1 ) - Please choose one
If person supplying water to the land for the purpose of growing rice in the field and he charged money from the cultivator against the water supplied. What will be the tax treatment of such income?
Exempt as Agriculture Income
Allowed Reduction in tax rate
Allowed reduction in tax liability
Taxable as Non-Agriculture Income
Question No: 7 ( Marks: 1 ) - Please choose one
Mr. Imran is an employee of Provincial Government of Punjab posted in UK
Resident Individual
Non-Resident Individual
Resident HUF
Resident AOP
Question No: 8 ( Marks: 1 ) - Please choose one
For 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
None of the given options
Question No: 9 ( Marks: 1 ) - Please choose one
What is the tax treatment of the reimbursement of expenditure made by the employer?
Wholly Taxable
Wholly exempt
Partly Taxable
Not mentioned in Income Tax Ordinance 2001
Question No: 10 ( Marks: 1 ) - Please choose one
What is the tax treatment of the leave encashment of the armed forces of Pakistan
retirement made by the employer?
Wholly Taxable
Wholly exempt
Partly Taxable
Not mention in Income Tax Ordinance 2001
Question No: 11 (Marks: 1) - Please choose one
As part of remuneration package, a company provides for reimbursement of telephone costs on actual basis to its employees in case the facility is used for official purposes only, what are the tax consequences of this policy?
Treated as taxable By: Adeel Abbas, www.allvupastpapers.blogspot.com
No tax consequences
Partially taxable
Not discussed in Income Tax Ordinance 2001
Question No: 12 ( Marks: 1 ) - Please choose one
MTS stands for which of the following?
Minimum time scale Page 44
Minimum transfer Salary
Maximum time scale
Maximum transfer Salary
Question No: 13 ( Marks: 1 ) - Please choose one
Condition for the approval of gratuity fund is based on which of the following?
Trust is irrevocable
Trust is revocable By: Adeel Abbas, www.allvupastpapers.blogspot.com
Trust is established by Government
Trust is approved by Officer of Income Tax
Question No: 14 ( Marks: 1 ) - Please choose one
Clause (10) and (11) of Part 1 of second schedule related to Pension are omitted by which
of the following?
Finance Ordinance 2004
Finance Ordinance 2005
Finance Bill 2006
Finance Bill 2007
Question No: 15 (Marks: 1) - Please choose one
Which of the following is the tax treatment for Income from property received as a rent for the year 2007?
1 /4 of the rent is deduct able as repairs allowance
1 /2 of the rent is deduct able as repairs allowance
1 /5 of the rent is deduct able as repairs allowance
No deduction is allowed
Question No: 16 (Marks: 1) - Please choose one
A non adjustable advance is received from a building as income from property. Such rent will be spread in how many of the following years?
5 years
6years
8 years
10 years
Question No: 17 ( Marks: 1 ) - Please choose one
Under clause (93 A) of the Part 1 of second schedule of Income Tax Ordinance 2001, which of the following business income is exempted from tax?
Income of a Text-Book Board
University or Educational Institution established not for profit purpose
Recognized Vocational Institute
Income of Recognized Sports Board
Question No: 18 ( Marks: 1 ) - Please choose one
Head Income from property section 15 defines land as:
Constructed building
Block of brick
Vacant plot
None of the given options
Question No: 19 ( Marks: 1 ) - Please choose one
One of the following options doesn’t come under the definition of Business income section 2 (9):
Trade
Commerce
Profession
Employment
Question No: 20 ( Marks: 1 ) - Please choose one
Which one of the following section defines Income under the head Income from
Business section 18?
Section 2(9)
Section 2(29)
Section 75
Section 2(15)
Question No: 21 (Marks: 1) - Please choose one
Which of the following section deals with the deductions Not allowed to income from business?
Section 2 (9)
Section 20
Section 21
Section 22
Question No: 22 (Marks: 1) - Please choose one
Gain on sale of depreciable asset, under section 31 of the Income Tax Ordinance 2001, is charged to tax under which of the following head of Income?
Income from Business By: Adeel Abbas, www.allvupastpapers.blogspot.com
Income from Property
Income from Capital Gain
Income from Other sources
Question No: 23 (Marks: 1) - Please choose one
Amount received after discontinuance of business, under section 31 of the Income Tax Ordinance 2001, is charged to tax under which of the following head of Income?
Income from Business
Income from Property
Income from Capital Gain
Income from Other sources
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following is the tax rate that a Resident Company is subjected to pay on its turnover for a tax year, even in cases where the company sustains loss?
0.25%
0.50%
0.75%
1.00%
Question No: 25 ( Marks: 1 ) - Please choose one
The amount of minimum tax liability is arrived at as follows:
(A x 0.5%) B
(A x B) 0.5%
(A + B) 0.5%
(A / 0.5%) B
Question No: 26 ( Marks: 1 ) - Please choose one
In case of disposal of asset between spouses under an agreement to live apart, what would be the tax treatment of such disposal of asset?
Charged to tax under the head Income from Business
Charged to tax under the head Income from Capital Gain
Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following is NOT required to file the return of Income Tax under section 115?
Every Company
Every Firm
Every person with land 250 sq yards
Salaried individual having salary certificate in lieu
Question No: 28 ( Marks: 1 ) - Please choose one
A person may furnish Revised Return from the date when the original return was furnished up to which of the following time period?
5 Days
5 Months
5 Years (Page 98)
15 Months
Question No: 29 ( Marks: 1 ) - Please choose one
A person where taxable income for a tax year exceeds the maximum amount not chargeable to tax is required to file a return of income for the tax year, presently this amount is:
Rs.100, 000
Rs.300, 000
Rs.250, 000
Rs.500, 000 –
Question No: 30 ( Marks: 1 ) - Please choose one
Which 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
Tax payer
Question No: 31 ( Marks: 1 ) - Please choose one
Federal Tax Ombudsman has the same powers as _____________ to punish any person for its contempt..
Supreme court
High court
City court
Provincial Government
Question No: 32 ( Marks: 1 ) - Please choose one
The office of Superintendent of Sales Tax, or such other office as the Board may, by notification in the official Gazette, specify is called;
Income tax office
Registered office
Local Sales Tax Office
None of the given options
Question No: 33 ( Marks: 1 ) - Please choose one
Capital Value Tax was levied on the capital value of assets with effect from;
1st July, 1989
1st June 1990
1st July 2000
1st July 1999
Question No: 34 ( Marks: 1 ) - Please choose one
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: 35 ( Marks: 1 ) - Please choose one
Mr. X resident of Pakistan
50,000 but received in India
particular scenario?
Mr. X being resident of Pakistan
income
Mr. X being resident of Pakistan Rs. 50,000 will be subtracted in Gross
total income By: Adeel Abbas, www.allvupastpapers.blogspot.com
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
Question No: 36 ( Marks: 1 ) - Please choose one
Mr. X non-resident of Pakistan earned income from property situated in Dubai
Rs. 70,000 but received in Pakistan
for this particlar scenario?
Mr. X being non-resident of Pakistan
total income
Mr. X being non-resident of Pakistan Rs. 70,000 will be subtracted in
Gross total income
Mr. X being non-resident of Pakistan Rs. 70,000 will be claimed as
admissible deduction
Mr. X being non-resident of Pakistan Rs. 70,000 will be exempted
Question No: 37 ( Marks: 1 ) - Please choose one
Which of the following is the rate of tax for salaried Individuals for tax year 2009, where the taxable income exceeds Rs. 250,000 but does not exceed Rs. 350,000?
Nil
0.250%
0.50%
0.75%
Question No: 38 ( Marks: 1 ) - Please choose one
Which of the following is the rate of tax for salaried Individuals for tax year 2009, where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 450,000?
0.25%
1.50%
2.50%
3.50%
Question No: 39 ( Marks: 1 ) - Please choose one
Miss Sonia s total taxable income for the year 2009 is Rs. 240,000. Which of the
following is the tax liability of Miss Sonia?
Nil
Rs. 500
Rs. 1,000
Rs. 1,500
Question No: 40 ( Marks: 1 ) - Please choose one
Mr. As total taxable income for the year 2009 is Rs. 600,000. Which of the following is the tax liability of Mr. A?
Rs. 15,000
Rs. 21,000
Rs. 27,000
Rs. 36,000
Question No: 41 ( Marks: 1 ) - Please choose one
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: 42 ( Marks: 1 ) - Please choose one
A firm ABC maintaining its account in cash basis, at June 27, 2008 it incurred
expenses for Rs. 10,000 but actual payments made at 01 August 2008. It would
be charge to tax into the tax year:
2006
2007
2008
2009
Question No: 43 ( Marks: 3 )
What is the main purpose of Gratuity?
Purpose:
• Provision of Gratuity to employees or
• Undertaking of provision (payment) of gratuity on retirement or
• On employees becoming incapacitated or
• On termination of their employment after completion of minimum period of service specified in the regulations of fund or to the widows, children or dependants of such employees on their death
• All benefits granted by the fund shall be payable only in Pakistan
Question No: 44 (Marks: 3)
Mr. Farooq s salary is Rs.22, 000 per month. He received commission during the year amounting to Rs.33, 000. He is provided a jeep by his employer for personal as well as official use. The employer took this jeep from a leasing company at an annual lease of Rs.80, 000. The fair market value of the jeep at commencement of lease was Rs.800, 000.Calculate the taxable income of Mr.Farooq.
Salary | =22000*12 | 264,000 |
Commission | =33000 | 33,000 |
Vehicle (As per Rule 5) | =800000*.05 | 40,000 |
Taxable Income | 337,000 | |
Question No: 45 ( Marks: 3 )
Briefly explain the unexplained income or assets under section 111 of Income Tax Ordinance 2001.
Where
A person has made an investment,
Any amount credited to person’s books of account
A person has incurred expenditure
A person has made an investment,
Any amount credited to person’s books of account
A person has incurred expenditure.
But no reasonable explanation offered regarding sources of fund –the amount as (a), (b) and (c) above shall be included in person’s income chargeable to tax.
Sub Sec. 1 of Sec. 111 does not apply to any amount of Foreign Exchange remitted from outside Pakistan
Sub Sec. 1 of Sec 111 does not also apply to any unexplained amount relating to a period beyond preceding five tax years.
Question No: 46 ( Marks: 5 )
Under what conditions a commissioner of Income Tax may ask for the filing of returns by notice?
Returns on Notice by Commissioner
The Commissioner may, by notice in writing, require a person, or a person’s representative, as the case may be, to furnish a return of income by the date specified in the notice for a period of less than 12 month, where-
- The person has died;
- The person has become bankrupt or gone into liquidation;
- The person is about to leave
Pakistan
Ø The commissioner may require any person to file a return of income, if in the opinion of the commissioner, a person is required to file a return for a tax year but he failed to do so. The person on whom the notice is served shall file return within 30 days from the date of service of notice.
Ø In case of any omission by a tax payer, a revised return can be filed within 5 years of the date that the original return was furnished.
Question No: 47 ( Marks: 5 )
Mr. Ghaus is employed in a company after his retirement from army. Details of his income for the year ended 30th June 2009 are as under;
Basic salary from company Rs.20, 000 per month - Taxable
Entertainment allowance Rs. 1,000 per month - Taxable
Pension received from army Rs. 48,000 per annum – Exempt Income (Retired from Army) By: Adeel Abbas, www.allvupastpapers.blogspot.com
Calculate the total taxable income of Mr.Ghaus.
Ans: Taxable Income 360,000
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