FIN623 Final Paper 2010

FINALTERM EXAMINATION
Spring 2010
FIN623- Taxation Management

Question No: 1 ( Marks: 1 ) - Please choose one
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: 2 ( Marks: 1 ) - Please choose one
How many Sections are included in the Income Tax Ordinance 2001?

► 340 sections
► 440 sections
► 140 sections
► 240 sections

Question No: 3 ( Marks: 1 ) - Please choose one
How many Schedules are contained in the Income Tax Ordinance 2001?
► Three Schedule
► Fifth Schedule
► Seven Schedules
► Nine Schedules

Question No: 4 ( Marks: 1 ) - Please choose one
Section 2(13) of Income Tax Ordinance 2001 defined:

“Commissioner” means a person appointed as a Commissioner of Income Tax under section 208, and includes a taxation officer vested with all or any of the powers, and functions of the Commissioner;

In which criteria the above definition falls?
► Exclusive definition
► Inclusive definition
► Both Exclusive and Inclusive definitions
► Statutory definition

Question No: 5 ( Marks: 1 ) - Please choose one
Which of the following is the Special Accounting Year of Insurance Companies?
► 1st January to 31st December
► 1st July to 30th June
► 1st October to 30th September
► 1st September to 31st August


Question No: 6 ( Marks: 1 ) - Please choose one
Certain incomes those are excluded from tax are called as:
► Perquisites
► Exemptions
► Allowances
► Deductions

Question No: 7 ( 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?
► Taxable as Non-Agriculture Income
► Exempt as Agriculture Income
► Allowed Reduction in tax rate
► Allowed reduction in tax liability

Question No: 8 ( Marks: 1 ) - Please choose one
The process of clubbing of income results in which of the following?
► Lower Bracket rate of tax is charged
► Higher Bracket rate of tax is charged
► Moderate Bracket rate of tax is charged
► No change occur due to clubbing

Question No: 9 ( Marks: 1 ) - Please choose one
Date for the exemption limit for Foreign Currency Account (FCA) under Clause 80 of the Part I of Second Schedule is available to which of the following?
► 16 December 1999
► 16 November 1999
► 16 July 2001
► 1st July 2002

Question No: 10 ( Marks: 1 ) - Please choose one
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.
► 2.5%
► 5.5%
► 7.5%
► 9.5%

Question No: 11 ( Marks: 1 ) - Please choose one
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: 12 ( Marks: 1 ) - Please choose one
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: 13 ( Marks: 1 ) - Please choose one
Pension received by Mr. John through permanent establishment in Pakistan is belonging to which of the following?

► Pakistani source of Income
► Foreign source of income
► Both Pakistan and foreign source of income
► None of the given option

Question No: 14 ( Marks: 1 ) - Please choose one
What is the tax treatment of losses from the foreign source under section 104 of the ordinance?
► Wholly taxable
► Partly Taxable
► Deductible expenditure
► None of the given options

Question No: 15 ( Marks: 1 ) - Please choose one
Rental income earned is taxable on a net income basis that is, after deduction of tax admissible expenditure and allowances from gross rent, for up to Tax year:
► 2007
► 2008
► 2006
► 2005

Question No: 16 ( Marks: 1 ) - Please choose one
On Building (all types) the depreciation rate specified for the purposes of section 22 shall be:
► 10%
► 12%
► 5%
► 20%

Question No: 17 ( Marks: 1 ) - Please choose one
Rates of depreciation is prescribed in which of the following part of third schedule of the Income Tax Ordinance:

► Part II
► Part III
► Part I
► None of the given options

Question No: 18 ( Marks: 1 ) - Please choose one
Which section define this ‘Income tax depreciation is admissible only in respect of depreciable assets'.

► Section 22(15)
► Section 22 (11)
► Section 23 A
► Section 24

Question No: 19 ( Marks: 1 ) - Please choose one
Profit on debt charged to tax under which of the following heads of Income?

► Income form Property

► Income from Business

► Income from Capital Gain

► Income from Other Sources

Question No: 20 ( 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

► Orphan with age below 25


Question No: 21 ( Marks: 1 ) - Please choose one
Appeal to the collector of sales tax may be filed within which of the following time period?
► 60 days

► 90 days

► 180 days

► 30 days


Question No: 22 ( Marks: 1 ) - Please choose one
Members of income tax appellate tribunal are appointed by which of the following authorities?
► Income Tax Department

► Provincial Government


► Federal Government

► Judicial Commission


Question No: 23 ( 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: 24 ( Marks: 1 ) - Please choose one
In relation to any registered person means the tax charged under the Sales tax Act in respect of a supply of goods made by that person and shall include duties of excise chargeable under section 3 of the Central Excises Act, 1944 (I of 1944) is known as;

► Output tax
► Input tax
► Income tax
► Wealth tax

Question No: 25 ( Marks: 1 ) - Please choose one
In Sales Tax Act "Zero - rated supply" means a taxable supply which is charged to tax at the rate of zero per cent define under

► Section 4
► Section 5
► Section 6
► Section 22

Question No: 26 ( Marks: 1 ) - Please choose one
Capital value tax is levied on which of the following?
► Capital gain

► Gross profits

► Capital value of asset

► Intangible assets

Question No: 27 ( Marks: 1 ) - Please choose one
What will be the tax liability of an individual who has received an income of Rs. 470,000 under the head income from property?
► Rs.17,750
► Rs. 23,500
► Rs. 47,000

► Rs. 70,500

Question No: 28 ( Marks: 1 ) - Please choose one
A retailer whose value of supplies in any period during the last twelve months ending any tax period exceeds_______ are required to be registered under the Sales Tax Act 1990;

► Forty million rupees
► Twenty million rupees
► Ten million rupees
► Five million rupees

Question No: 29 ( Marks: 1 ) - Please choose one
Mr. Amjad (employed by Federal Government) received a basic salary of Rs. 100,000 during the year ended 30.06.2009. He received leave encashment amounting to Rs. 12,000 per month and the special allowance . 25% which is Rs. 8,400 per month. What would be his taxable income?
► Rs. 50,000
► Rs. 100,000
► Rs. 200,800
► Rs. 244,000

Question No: 30 ( Marks: 1 ) - Please choose one
Mr. Shahmeer has a gross tax of Rs. 97,200 and taxable income of Rs. 972,000 during the year ended 30.06.2009. He has invested shares in public company of Rs. 120,000 and donated to Mayo Hospital Rs. 30,180. What would be the amount of average relief?
► Rs. 12,738
► Rs. 3,018
► Rs. 9,720
► Rs. 12,000

Question No: 31 ( Marks: 1 ) - Please choose one
Which of the following is the general formula for calculating tax credits?
► (A+B) x C
► (A-B) x C
► (A/B) x C
► (A/B) + C

Question No: 32 ( Marks: 1 ) - Please choose one
Salary is the first head or source of income mentioned in which of the following sections of the Income Tax Ordinance 2001?
► Section 12
► Section 34
► Section 20
► Section 85

Question No: 33 ( Marks: 1 ) - Please choose one
Mr. Zahoor received a basic salary of Rs. 10,000 per month during the year ended 30.06.2009. He has received rent free unfurnished accommodation by his employer. He was entitled to receive rent . Rs. 4,000, per month, if this accommodation was not provided to him. What would be his tax payable?
► Nil
► Rs. 133,980
► Rs. 195,000
► Rs. 210,000

Question No: 34 ( Marks: 1 ) - Please choose one
Mr. Shafqat received a basic salary of Rs. 200,000 during the year ended 30.06.2009. He has received lunch facility, cost of living allowance and adhoc relief of Rs. 6,000, 50,000, and 7,800 respectively. What would be his tax payable?
► Rs. 1,030
► Rs. 1,039
► Rs. 1,069
► Rs. 1,978.5

Question No: 35 ( Marks: 1 ) - Please choose one
Mr. Asif received a salary of Rs. 200,000 during the year ended 30.06.2009. His MTS is (Rs. 55,000-5,000-70,000). He has received medical allowance and facility of interest free loan from his employer of Rs. 10,000 per month and Rs. 900,000 respectively. What would be his tax payable?
► Rs. 1,987.5
► Rs. 2,535
► Rs. 107,500
► Rs. 134,200

Question No: 36 ( Marks: 1 ) - Please choose one
In case, general provident is approved by Govt. or a local authority or a statutory body under clause 13 (i) of the Income Tax Ordinance 2001 then what will be the treatment of such Gratuity fund?
► Wholly exempt
► Exempt up to Rs. 100,000
► Exempt up to Rs. 200,000 and exceeding amount will be charged as salary
► 50% of the amount receivable or Rs. 75,000 whichever is less

Question No: 37 ( Marks: 1 ) - Please choose one
Mr. Afsar received a basic salary of Rs. 900,000 during the year ended 30.06.2009. He has received dividend income of Rs. 15,000 and verifiable personal medical expenses of Rs. 20,000. What would be his tax payable?
► Rs. 67,500
► Rs. 84,150
► Rs. 82,800
► Rs. 82,350

Question No: 38 ( Marks: 1 ) - Please choose one
The taxable income of Mr. Sabahat is Rs. 460,400 during the year ended 30.06.2009. He has received an interest free loan of Rs. 100,000 at which the employer charged interest at a rate of 12%. What would be his tax payable?
► Rs. 16,534
► Rs. 460,400
► Rs. 472,400
► Rs. 560,400

Question No: 39 ( Marks: 1 ) - Please choose one
Mr. Sufyan has rented out his house at Rs. 80,000 per month. As per rent deed he has received an amount of Rs. 150,000 as advance, which is non adjustable against rent. What would be the amount of rent chargeable to tax?
► Rs. 40,000
► Rs. 975,000
► Rs. 73,000
► Rs. 100,800

Question No: 40 ( Marks: 1 ) - Please choose one
Mr. Tareen let out a house at the monthly rent of Rs. 150,000 and received a deposit of Rs. 65,000 not adjustable against the rent. What would be his tax payable?
► Rs. 3,250
► Rs. 325
► Rs. 92,400
► Rs. 215,000

Question No: 41 ( Marks: 1 ) - Please choose one
Mr. Liaqat during the year ended 30th June 2009 received a net profit of Rs. 60,000. He has received profit on sale of investments of Rs. 10,000 and interest on government securities of Rs. 3,000. What will be his income from profession?
► Rs. 53,000
► Rs. 67,000
► Rs. 73,000
► Rs. 47,000

Question No: 42 ( Marks: 1 ) - Please choose one
Mr. Mohsin during the year ended 30th June 2009 received a net profit of Rs. 250,000. He has maintained a reserve for meeting contingent liability. The maintenance cost him Rs. 25,000 and he has paid for purchase of goodwill Rs. 30,000. What will be his income from profession?
► Rs. 170,000
► Rs. 230,000
► Rs. 255,000
► Rs. 330,000

Question No: 43 ( Marks: 1 ) - Please choose one
Mr. Jamil an engineer has received consultancy fee of Rs. 385,000. He has paid design and draft related salaries and site supervisors Rs. 45,000 and Rs. 36,000 respectively. What will be his income from profession?
► Rs. 304,000
► Rs. 394,000
► Rs. 376,000
► Rs. 466,000

Question No: 44 ( Marks: 1 ) - Please choose one
Mrs. Mazhar during the year ended 30th June 2009 received salary of Rs. 80,000 per month. She has received income from fish catching business of Rs. 30,000. What will be her income from profession?
► Rs. 50,000
► Rs. 110,000
► Rs. 990,000
► Rs. 960,000

Question No: 45 ( Marks: 1 ) - Please choose one
M/s Junior during the year ended 30th June 2009 received a net profit of Rs. 139,400. The income tax as per P&L account is worth Rs. 2,500 and loss by embezzlement of Rs. 5,000. What will be the tax payable of the company?
► Rs. 785,000
► Rs. 51,415
► Rs. 730,000
► Rs. 725,000

Question No: 46 ( Marks: 1 ) - Please choose one
Mr. Qasim received income from business of Rs. 107,000. He has received gain on sale of residential house of Rs. 140,000. What will be his taxable income?
► Rs. 50,000
► Rs. 300,000
► Rs. 107,000
► Rs. 100,000

Question No: 47 ( Marks: 1 ) - Please choose one
Mr. Sabir received income from business of Rs. 107,000. He has received profit on encashment of Defence Saving Certificates of Rs. 10,000. What will be his income from profession?
► Rs. 300,000
► Rs. 200,000
► Rs. 107,000
► Rs. 192,000

Question No: 48 ( Marks: 1 ) - Please choose one
Mrs. Gilani has received basic salary of Rs. 300,000 during the tax year 2009. She has received matured Defence Saving Certificates of Rs. 80,000 of which 70,000 were encashed. What will be his taxable income?
► Rs. 960,000
► Rs. 110,000
► Rs. 50,000
► Rs. 310,000

Question No: 49 ( Marks: 3 )
What is meant by Depreciable asset?

Question No: 50 ( Marks: 3 )
Who is liable to pay Capital Value Tax on capital value of certain assets?

Question No: 51 ( Marks: 5 )
Your are required to define in detail the section 21(l) ‘Expenditure paid for in cash’under head Income from Business'.


Question No: 52 ( Marks: 5 )
What do you understand by the term ‘mal-administration’ in context with Income tax department? Explain.

Question No: 53 ( Marks: 5 )
Mr. Adeel owns a property which he has rented out for Rs.10, 000 per month. The local authority has determined the rental value of the property as Rs.144, 000. He has no other income.
Required:
1. What will be the fair market value of the property?
2. How much tax will be payable by Mr.khan for the tax year 2009?