MIDTERM EXAMINATION
Spring 2010
FIN623- Taxation Management (Session - 4)
Time: 60 min
M a r k s: 44
Question No: 1 ( M a r k s: 1 ) http://vuzs.net
Which one of the following is main difference between the tax and fee?
► Entitlement of Counter benefit
► Imposing authority
► Mode of payment
► Applied Rates
Question No: 2 ( 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: 3 ( M a r k s: 1 ) http://vuzs.net
How many Sections are included in the Income Tax Ordinance 2001?
► 340 sections
► 440 sections
► 140 sections
► 240 sections
Question No: 4 ( 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: 5 ( M a r k s: 1 ) http://vuzs.net
Superior judiciary includes which of the following authorities?
► City Court
► Supreme Court
► High Court
► Both supreme and High court
Question No: 6 ( M a r k s: 1 )
http://vuzs.net
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: 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
Which of the following is the Special Accounting Year of Sugar Companies?
► 1st July to 30th June
► 1st October to 30th September
► 1st September to 31st August
► 1st January to 31st December
Question No: 10 ( M a r k s: 1 ) http://vuzs.net
Which one of the following is the example of tax payer?
► Salaried Person
► LESCO
► All of the given options
► WAPDA
Question No: 11 ( M a r k s: 1 ) http://vuzs.net
Certain incomes those are excluded from tax are called as:
► Perquisites
► Exemptions
► Allowances
► Deductions
Question No: 12 ( M a r k s: 1 ) http://vuzs.net
Sources of Income are classified into _____ heads of income.
► 3
► 4
► 5
► 6
Ref: Following are the heads of income, ascertained in section 11
• Salary (Section 12)
• Income from Property (Section 15)
• Income from Business (Section 18)
• Capital Gains (Section 37)
• Income from other Sources (Section 39)
Question No: 13 ( M a r k s: 1 ) http://vuzs.net
Which of the following incomes are treated as agriculture income?
► Spontaneous forests
► Agro based industry
► Interest received by a farmer on lending
► Income from land in Pakistan used for agriculture
Question No: 14 ( M a r k s: 1 ) http://vuzs.net
Which of the following is similar to the concept of club 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
Question No: 15 ( M a r k s: 1 ) http://vuzs.net
What is the tax treatment of the salary of an employee of foreign government but citizen of Pakistan?
► Exempt form tax
► Wholly Taxable
► Partly Taxable
► No Tax treatment given in IT Ordinance 2001
Question No: 16 ( M a r k s: 1 ) http://vuzs.net
Income of Federal Government exempt from tax under which of the following section of IT Ordinance 2001?
► Section 41
► Section 43
► Section 47
► Section 49
Question No: 17 ( M a r k s: 1 )
Any Fund for Promotion of Science and Technology in Pakistan is__________ under Part I of the second schedule of IT Ordinance 2001.
► Wholly Taxable
► Wholly Exempt
► Partly Exempt
► None of the given options
Question No: 18 ( M a r k s: 1 ) - Please choose vuzs one
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: 19 ( M a r k s: 1 ) http://vuzs.net
Which of the following days shall be counted as whole day for the computation of residential status of an individual?
► A public holiday
► A day of sick leave
► Any strike day
► All of the given options
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
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: 22 ( M a r k s: 1 ) http://vuzs.net
Mr. Khan resident of Pakistan received salary from UK? His salary will be included in which of the following?
► Pakistan source income
► Foreign source income
► Both Pakistan and foreign source income
► None of the given options
Question No: 23 ( 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: 24 ( 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: 25 ( 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: 26 ( M a r k s: 1 ) http://vuzs.net
Salary by members of AOP is not treated as Salary but treated as appropriation of profit and charged under the head:
► Income from Salary
► Income from Property
► Income from Business
► Income from Other Sources
Question No: 27 ( M a r k s: 1 ) http://vuzs.net
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
Question No: 28 ( M a r k s: 1 ) http://vuzs.net
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: 29 (vuZs M a r k s: 3 )
What is the difference between remittance and receipt of income? Which one is chargeable to taxable?
Difference between remittance and receipt of income
Receipt of
income is the money that you receive and you might have to return it on a
later stage. Further the receipt can be on sale of goods, or business
receipts out of which the profit shall be your income. If salaried, the
salary is your income for the purpose of tax calculations.
While a remittance
is a transfer of money by a foreign worker to his or her home country.
See "Remittance Man" below for the historical use of the word, which is
the opposite of the modern use.
Question No: 30 ( M a r k s: 3 )
Section 102 deals with Salary received from Foreign-Source by resident individual. What is the tax treatment of such salary?
Answer:
Foreign-Source Salary Income [102]
A 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: 31 ( M a r k s: 5 )
Profit on
debt earned by a non-resident person is exempt from tax under clause
(77) of Part I of the second schedule. Is this exemption only available
to “Individuals” as reference has been made to persons being citizens of
Pakistan or otherwise? Provide the details of this clause.
Answer:
No this
exemption is also available Approved loans, Foreign currency accounts
held in the Pakistani account, profit on rupee help with a scheduled
bank in Pakistan, profit from the private frogin currency accounts held
in the authorized banks.
Question No: 32 ( 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.
