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Pakistan Income Tax MCQs (With Answers)

Exempted Income

11. Which of the following incomes are exempt from tax under the Income Tax Ordinance, 2001 ?
Explanation:
Any agricultural income received or earned by a person shall be exempt from tax under the Income Tax Ordinance, 2001.
Reference: Section 41. Agricultural Income - ITO, 2001

Computation of Total Income

12. Total income is calculated after combining how many heads of income ?
Explanation:
Total income is the combined income from all heads: Salary, Property, Business, Capital Gains, and Other Sources.
Reference: Section 10. Total Income - ITO, 2001

Resident and Non-resident Persons

13. Which section of the Income Tax Ordinance, 2001 deals Resident Individual?
Explanation:
A person shall be treated as a resident for a tax year in Pakistan if he or she stays in Pakistan for a period of 183 days or more.
Reference: Section 82. Resident Individual - ITO, 2001

Advance Tax – Transitional Phase

14. Which section of the Income Tax Ordinance, 2001 deals with Advance Tax on Sale or Transfer of Immovable Property?
Explanation:
At the time of sale or transfer of immovable property, advance tax shall be collected by the withholding agent.
Reference: Section 236C. Advance Tax on sale or transfer of immovable Property - ITO, 2001
15. Which section of the Income Tax Ordinance, 2001 deals with Advance Tax on Purchase or Transfer of Immovable Property ?
Explanation:
At the time of purchase or transfer of immovable property, advance tax shall be collected by the withholding agent.
Reference: Section 236K. Advance Tax on purchase or transfer of immovable Property - ITO, 2001

Filing of Return

16. Which section of the Income Tax Ordinance, 2001 deals with Return of Income ?
Explanation:
A person is required to file an income tax return for the tax year in accordance with section 114 of the Income Tax Ordinance, 2001.
Reference: Section 114. Return of Income - ITO, 2001

Minimum Tax

17. Which section of the Income Tax Ordinance, 2001 deals with Minimum Tax on Turnover ?
Explanation:
This section applies to resident companies, permanent establishments of non-resident companies, individuals, and associations of persons having a turnover of Rs. 100 million or more.
Reference: Section 113. Minimum tax on the income of certain persons - ITO, 2001

Filing of Return

18. Which section of the Income Tax Ordinance, 2001 deals with Persons Not Required to Furnish a Return of Income ?
Explanation:
A widow, orphan, disabled person, or a non-resident owning immovable property is not required to file a return of income under section 114, solely due to sub-clauses (iii) to (vi) of section 114(1)(b).
Reference: Section 115. Persons not required to furnish a return of income - ITO, 2001

Advance Tax – Transitional Phase

19. Which section of the Income Tax Ordinance, 2001 deals with Advance tax on persons remitting amounts abroad through credit or debit or prepaid cards ?
Explanation:
Advance tax is collected by the bank on foreign payments made through debit, credit, or prepaid cards at the time of remittance.
Reference: Section 236Y.Advance tax on persons remitting amounts abroad - ITO, 2001
20. Which section of the Income Tax Ordinance, 2001 deals with Electricity Consumption ?
Explanation:
Advance tax will be collected on the electricity bills of commercial, industrial, and domestic consumers.
Reference: Section 235. Electricity Consumption - ITO, 2001
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