3. (1) page 22Any Pakistan-source income which Pakistan is not permitted to tax under a tax treaty shall be

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1 1. What is the tax treatment of the salary of an employee of foreign government but citizen of Pakistan? a. Exempt from tax b. Wholly Taxable c. Partly Taxable 2. Non-Agricultural income includes which one of the following? a. Select correct option: b. Income from sale of wild grass c. Income from fisheries d. Royalty income of mines e. All of the given options 3. (1) page 22Any Pakistan-source income which Pakistan is not permitted to tax under a tax treaty shall be a. Wholly Taxable b. Wholly Exempt c. Partly Exempt d. Not mention in Ordinance 4. However its most of the branches 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 5. In Income Tax Ordinance 2001 tax concessions meant for which of the following? Select correct option:

2 a. Reduction in tax liability b. Reduction in tax rate c. Reduction in taxable Income d. All of the given options 6. Which of the following is the tax where the tax rate remained fixed to the amount on which the rate is applied increases? a. Proportional tax b. Progressive tax c. Corporate tax 7. Any Pakistan-source income which Pakistan is not permitted to tax under a tax treatyshall be a. Wholly Taxable b. Wholly Exempt c. Partly Exempt d. Not mention in Ordinance 8. Which of the following methods of accounting is compulsory to adopt for Sole- proprietorship? a. Accrual Basis b. Cash Basis c. Free to choose any kind of base 9. Which one of the following is the general meaning of Tax? a. Relax b. Lighte c. n Reli d. eve

3 e. Fatigue 10. In the normal circumstances on which of the following tax is charged? a. Gross Receipt b. Total Income c. Taxable Income d. Gross Income 11. Which of the following is the Special Accounting Year of Companies exporting rice? a. 1st January to 31st December b. 1st July to 30th June c. 1st October to 30th September d. 1st September to 31st August 12. Which one of the following canons of taxation suggests easiness in time of payment and mode of collection of tax? a. Simplicity b. Convenience c. Certainty d. Capacity to e. Pay 13. Which part of Income Tax Ordinance 2001 deals with the Exemptions and Tax Concessions? a. Part IV b. Part V c. Part VI

4 d. Part VII 14. Agricultural income includes which one of the following? a. Dividend paid by a company out of its agriculture income b. Income from fisheries c. Royalty income of mines d. Share of profit of a partner from a firm engaged in agricultural 15. designed in such a way to boost business atmosphere and the investment environment in the country? a. Convenience b. Judicious c. Capacity to Pay d. Business friendly 16. The Chairman of CBR has the responsibility for which of the following measures? a. Formulation and administration of fiscal policies b. Levy and collection of federal taxes c. Quasi-judicial function of hearing of appeals d. All of the given options 17. Tribunal established under section 130 In which criteria the above definition falls? a. Exclusive definition b. Inclusive definition c. Both Exclusive and Inclusive definitions d. Statutory definition

5 18. Agricultural income does NOT include which one of the following? a. Rent or Revenue derived by a person from land b. Income derived from land situated in Pakistan c. The land is used for agricultural purposes d. Income from spontaneous forest 19. A firm ABC maintaining its account in cash basis, at June 27, 2008 it is entitled to receive Rs. 10,000 but actual payments made at 01 August In which year it is charged to tax? a b c d Which of the following income is chargeable to tax? a. Gross income from business b. Income computed in line with provisions of Ordinance c. Only basic salary of salaried person d. Basic salary excluding allowances of a salaried person 21. Which of the following is the main tool of Fiscal Policy? a. Taxes b. Deficit Financing c. Subsidies d. Transfer Payments 22. The Fiscal year is a period of months arbitrarily chosen for tax purposes. a. 3

6 b. 6 c. 12 d expenses incurred in providing common benefits upon the residents? a. Fee b. Taxes c. Charges d. Penalties 24. Which part of Income Tax Ordinance 2001 deals with the Exemptions and Tax Concessions? a. Part IV b. Part V c. Part VI d. Part VII 25. Taxes are important instrument of which of the following policy? a. Monetary policy b. Fiscal policy c. Trade Policy d. Economic Policy 26. Which of the following tax is paid from money you received from someone who has died? a. Income tax b. Inheritance tax

7 c. Property tax d. Sales tax 27. 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 charged d. No change occur due to clubbing 28. are allowable deductions in case if the tax payer is running a business. a. Salaries paid b. Purchases c. Office expenditures d. All of the given options 29. What is the tax treatment of the salary of an employee of foreign government but citizen of Pakistan? a. Exempt from tax b. Wholly Taxable c. Partly Taxable d. No Tax treatment given in IT Ordinance Which one of the following is the main objective of Fiscal Polic y? a. Economic Development b. Price stability

8 c. Removal of deficit in Balance of Payment d. All of the given options 31. Expenses entitled to be paid by a Company, then entry of such expenses will be made in the books of accounts if: a. Company maintaining its books of account on Cash basis b. Company maintaining its books of account on Accrual basis c. Company maintaining its books of account on Both Accrual and Cash basis d. None of the given options 32. It is mandatory for each Company to maintain its books of accounts on which of the following methods? a. Cash basis b. Accrual basis c. Both cash and accrual basis d. Free to choose any kind of base 33. Non-Agricultural income includes which one of the following? a. Income from sale of wild grass b. Income from fisheries c. Royalty income of mines d. All of the given options 34. Which of the following is the important content for calculating tax on income? a. Taxable Income b. Residential Status c. Tax Year

9 d. All of the given options 35. Any Pakistan-source income which Pakistan is not permitted to tax under a tax treaty shall be. a. Wholly Taxable b. Partly Exempt c. Not mention in Ordinance 36. In the normal circumstances on which of the following tax is charged? a. Gross Receipt b. Total Income c. Taxable Income d. Gross Income 37. Which of the following income is chargeable to tax? a. Gross income from business b. Income computed in line with provisions of Ordinance (not sure) c. Only basic salary of salaried person d. Basic salary excluding allowances of a salaried person 38. The Fiscal year is a period of months arbitrarily chosen for tax purposes a. 3 b. 6 c. 12 d What is the tax treatment of any profit on the US Dollar Bonds purchased by the non resident person before December 1999 under clause 82 of the Second Schedule?

10 a. Wholly taxable b. Wholly exempt c. Partly taxable d. Not mention in second schedule (not sure) 40. What is the residential status of Provincial Government of Pakistan? a. Resident Individual b. Resident Company c. Resident AOP d. Resident HUF 41. M/s ABC & Co. has been incorporated under Pakistan Companies Ordinance However its most of the branches 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 42. In Income Tax Ordinance 2001 tax concessions meant for which of the following? a. Reduction in tax liability c. Reduction in tax rate c. Reduction in taxable Income d. All of the given options 43. of the following section deals with the residential status of Individual? a. Section 80

11 b. Section 81 c. Section 82 d. Section Any amount received under Part 3 of Second Schedule, as flying allowance by pilots etc and junior commissioned officers or other ranks shall be taxed at the rate of as separate block. a. 2.5% b. 5.5% c. 7.5% d. 9.5% 45. Mr. Kishan Kumar during his yearly tour in Pakistan spends 156 working days, 26 off- working days and 1 Public Holiday in a tax year ? Which of the following is his residential status? a. Resident Individual b. Non Resident Individual c. Resident Person d. Resident HUF 46. What is the residential status of Federal Government of Pakistan? a. Resident Person b. Resident Company c. Resident AOP d. Resident HUF 47. 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

12 c. Resident HUF d. Resident AOP 48. 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 Which of the following section deals with the residential status of Association of Person? a. Section 81 b. Section 82 c. Section 83 d. Section Which of the following days shall be counted as half day for the computation of residential status of an individual? Select correct option: a. A Public Holiday b. A day of sick leave c. Any strike d. None of the given options 51. 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

13 c. Rs. 400,000 d. Rs. 1,000, A firm ABC maintaining its account in accrual basis, at June 27, 2008 it is entitled to receive Rs. 10,000 but actual payments made at 01 August It would be charge to tax into the tax year: a b c d Mr. Kishan Kumar during his yearly tour in Pakistan spends 155 working days, 26 off-working days 1 strike day and a. 1 Public Holiday in a tax year ? What will be the status of the individual? b. Resident Individual c. Non Resident Individual d. Resident Person e. Resident HUF 54. Which of the following section of Income Tax Ordinance 2001 deals with perquisites of Income from Salary and its a. treatment? b. Section 11 c. Section 13 d. Section 14 e. Section Tax year for the salaried individuals is called as:

14 a. Special Tax Year b. Normal Tax Year c. Fiscal Year d. Financial Year 56. The definition of Employment under Sec. 2(22) of the ordinance is categorized in: a. Inclusive Definition b. Exclusive Definition c. Both Inclusive and Exclusive d. None of the given options 57. Any business carried by Non-resident person in Pakistan through permanent establishment (PE) the general and a. admin expenditure incurred. What will be the tax treatment of such expenditure? b. Exempt from tax due to non-resident c. Wholly taxable due to PE d. Allowed as deduction from the income of Non-resident e. None of the given options 58. 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 59. For a resident AOP which of the following condition must be satisfied?

15 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 60. M/s ABC & Co. has been incorporated under Pakistan Companies Ordinance However it s most of the branched and control and management of affairs wholly situated out of Pakistan? What will be the residential status of M/s ABC & Co.? a. Resident Company CORRECT b. Non-Resident Company c. Resident Individual d. Resident AOP 61. Which of the following section deals with the residential status of Company? a. Section 81 b. Section 82 c. Section 83 d. Section Rate charged under presumptive tax regime to nonresident shipping firm 8% on its gross receipt is quite low as a. compare to other business. This is an example of which type of tax concession? b. Reduction in total taxable income c. None of the given options d. Reduction in tax liability e. Reduction in tax rate 63. What is the tax treatment of Donation to the President s Relief Fund for Earthquake Victims 2005?

16 a. Wholly Taxable b. Wholly Exempt c. Partly Exempt d. Not mention in Ordinance 64. Land revenue rent (Lagan) is received by which of the following authority? a. High Court b. Supreme Court c. Income Tax Department d. Provincial Government 65. Suppose a Profit acquired by a cultivator from the sale of standing crops or the produce after harvesting. a. The profit of the cultivator will be treated in which of the following way? b. Income from Business c. Agriculture Income d. Income from Property e. Capital Gain 66. If the land situated in Pakistan and used for agriculture purposes then which of the following factor make distinction a. between agriculture and non-agriculture Income? b. Nationality of Pakistan c. Quantity of the product d. Time period e. Human effort

17 67. Certain incomes those are excluded from tax are called as: a. Perquisites b. Exemptions c. Allowances d. Deductions 68. If the accounting year of Mr. Aslam, a rice exporter is started from 01 January 2005 and ending on 31st December a What will be its tax year? b. Tax year 2003 c. Tax year 2004 d. Tax year 2005 e. Tax year Which of the following is the Special Accounting Year of Insurance Companies? a. 1st January to 31st December b. 1st July to 30th June c. 1st October to 30th September d. 1st September to 31st August 70. 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? a. Exclusive definition b. Inclusive definition c. Both Exclusive and Inclusive definitions d. Statutory definition

18 71. Law making is the prime responsibility of which of the following authorities? a. Parliament b. Supreme Court c. High Court d. City Court 72. Under which of the following sections of Income Tax Ordinance 2001 vested the powers to CBR in order to a. formulate the IT rule 2002? b. Section 206 c. Section 213 d. Section 237 e. Section Which of the following tax is paid in relation to how much you earn? a. Sales Tax b. Income Tax c. Inheritance Tax d. Value added Tax 74. Taxation management is a strategy where by a person manages its business in such a way so as to maximize the a. utilization of which of the following? b. All of the given options c. Tax holidays d. Exemption, Rebates & Concession

19 e. Tax credits 75. Which of the following canon of taxation suggests that there should not be any arbitrariness or ambiguity in respect of amount of tax paid? a. Capacity to Pay b. Simplicity c. Certainty d. Convenience 1-a 2-d 3-b 4-a 5-d 6-a 7-b 8-c 9-e 10-c 11-a 12-b 13-d 14-d 15-d 16-d 17-a 18-d 19-c 20-b 21-a 22-c 23-b 24-d 25-b 26-b 27-b 28-d 29-a 30-d 31-c 32-b 33-d 34-d 35-a 36-c 37-b 38-c 39-d 40-a 41-a 42-d 43-c 44-a 45-a 46-a 47-b 48-c 49-d 50-d 51-c 52-d 53-a 54-d 55-b 56-a 57-b 58-b 59-c 60-a 61-a 62-d 63-b 64-d 65-b 66-d 67-b 68-d 69-d 70-a 71-a 72-c 73-b 74-a 75-c