Taxation Managment (Fin-623) Solution

1. If a cultivator used its agricultural produce as raw material in its business what will be the tax treatment of such agriculture produce?
a) Market price of such produce will be deducted as business
expenditure
b) The expenses of cultivation will be deducted as expense from
business
c) The land revenue rent paid will be deducted as expense from
business
d) All of the given options

2. Which of the following is similar to the concept of clubbing of Incomes?
a) Unification only two heads of Income
b) Association of two or more heads of Incomec) Splitting up of only two heads of Income
d) Division of two or more than two heads of Income

3. The process of clubbing of income results in which of the
following?
a) Lower Bracket rate of tax is charged
b) Higher Bracket rate of tax is charged
c) Moderate Bracket rate of tax is chargedd) No change occur due to clubbing

4. What is the tax treatment of the salary of an employee of foreign government but citizen of Pakistan?
a) Exempt form taxb) Wholly Taxable
c) Partly Taxable
d) No Tax treatment given in IT Ordinance 2001

5. Any Pakistan-source income which Pakistan is not permitted to
tax under a tax treaty shall be _______.
a) Wholly Taxable
b) Wholly Exemptc) Partly Exempt
d) Not mention in Ordinance

6. An Individual will be termed as Short Term Resident under
section 50 of the IT Ordinance 2001 on which of the following
condition meet?
a) His period of stay equal to 183 days
b) The employee of Federal Government
c) The citizen of Pakistan
d) Resident solely by reason of the individual’s employment

7. Income chargeable under the head “Income from Business”
derived by a Provincial Government or local authority from a
business carried on outside its jurisdictional area, how it will be
treated under sec (49) IT Ordinance 2001?
a) Wholly taxableb) Wholly exempt
c) Partially exempt
d) Section is silent about it

8. In Income Tax Ordinance 2001 tax concessions meant for which
of the following?
a) Reduction in tax liabilityb) Reduction in tax rate
c) Reduction in taxable Income
d) All of the given options

9. Senior citizen-age 60 years & above where taxable income not
exceeding ________ tax liability reduced by 50% under Part 3
of second schedule.
a) Rs. 200,000
b) Rs. 300,000
c) Rs. 400,000
d) Rs. 500,000

10. The age of senior citizen was 65years and now amended to
60years which of the following finance act substituted 65 to
60years?
a) Finance Act 2005
b) Finance Act 2006
c) Finance Act 2007
d) Finance Act 2008

11. M/s ABC & Co. has been incorporated under Pakistan
Companies Ordinance 1984. However its most of the branched
are operated out of Pakistan? What will be the residential status
of M/s ABC & Co.?
a) Resident Company
b) Non- Resident Company
c) Resident Individual
d) Resident AOP

12. Mr. Joseph is an employee of Foreign Government posted in
Pakistan? What will be the residential status of Mr. Joseph?
a) Resident Individual
b) Non- Resident Individual
c) Resident HUF
d) Resident AOP

13. What is the residential status of Provincial Government of
Pakistan?
a) Resident Individual
b) Resident Company
c) Resident AOP
d) Resident HUF

14. What is the residential status of Federal Government of
Pakistan?
a) Resident Person
b) Resident Company
c) Resident AOP
d) Resident HUF

15. For a resident AOP which of the following condition must be
satisfied?
a) Control and management of affairs of AOP is situated partly in
Pakistan
b) Control and management of affairs of AOP is situated wholly in
Pakistan
c) Control and management of affairs of AOP is situated wholly or
partly in Pakistan
d) None of the given options

16. Which of the following days shall be counted as whole day for
the computation of residential status of an individual?
a) A public holiday
b) A day of sick leave
c) Any strike day
d) All of the given options

17. Which part of income is charged to tax of non-resident person
under the income tax ordinance 2001?
a) Pakistani source of income
b) Foreign source of income
c) Both Pakistan and foreign source of income
d) None of the given option

18. Rental income shall be Pakistan-source income if it is derived
from:
a) The lease of immovable Property in Pakistan
b) The lease of immovable Property outside Pakistan
c) The lease of immovable Property both in and out of Pakistan
d) None of the given options

19. Any gain arising on the disposal of shares in a non-resident
company belongs to which of the following?
a) Pakistan- source income
b) Foreign source of income
c) Both Pakistan and foreign source of income
d) None of the given option

20. What is the tax treatment of losses from the foreign source under section 104 of the ordinance?
a) Wholly taxable
b) Partly Taxable
c) Deductible expenditure
d) None of the given options