Pakistan Income Tax MCQs (With Answers)

Income from Other Sources – Nature of Income

21. Which of the following incomes is chargeable to tax under the head Income from Other Sources ? Salary received from an employer Rental income from property Capital gain on sale of immovable property Profit on debt

Explanation:
Any profit on debt earned by a person from a bank or a financial institution is treated as income from other sources.

Reference: Section 39(1)(c). Income from Other Sources - ITO, 2001

Default Surcharge

22. Which section of the Income Tax Ordinance, 2001 deals with default surcharge? Section 210 Section 205 Section 204 Section 203

Explanation:
Default surcharge is imposed on unpaid tax, penalty, or other specified amounts at 12% or KIBOR plus 3% per annum, calculated from the due date until payment.

Reference: Section 205. Default Surcharge - ITO, 2001

Deduction of Tax at Source

23. Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from salary? Section 149 Section 150 Section 151 Section 152

Explanation:
The Employer is responsible for deducting tax from the employee’s salary and depositing it into the government treasury.

Reference: Section 149. Salary - ITO, 2001

24. Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Dividends ? Section 152 Section 150 Section 151 Section 149

Explanation:
Every person paying a dividend shall deduct tax from the gross amount at the time of payment.

Reference: Section 150. Dividends - ITO, 2001

25. Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Profit on debt ? Section 151 Section 150 Section 148 Section 152

Explanation:
Every person, bank, or financial institution is required to deduct tax at source on profit on debt and deposit the deducted amount into the government treasury.

Reference: Section 151. Profit on debt - ITO, 2001

26. Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Exports ? Section 149 Section 148 Section 154 Section 151

Explanation:
The bank shall deduct tax at source at the time the amount is credited.

Reference: Section 154. Export - ITO, 2001

27. Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Exports of Services ? Section 148 Section 154 Section 154A Section 155

Explanation:
The bank shall deduct tax at source at the time the amount is credited.

Reference: Section 154A. Export of Services - ITO, 2001

28. Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Rent of Immovable Property ? Section 155 Section 147 Section 156 Section 152

Explanation:
Every prescribed person shall deduct tax at source at the time of making payment to the owner.

Reference: Section 155. Rent of Immovable Property - ITO, 2001

29. Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Payments to non-residents ? Section 147 Section 148 Section 151 Section 152

Explanation:
Every person making payment of royalty or fees for technical services to a non-resident person, which is chargeable to tax, shall deduct tax at source.

Reference: Section 152. Payments to non-residents - ITO, 2001

30. Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Prizes and Winnings ? Section 156 Section 138 Section 147 Section 137

Explanation:
Every person paying a prize on a prize bond, or winnings from a raffle, lottery, quiz, sales promotion scheme, or crossword puzzle shall deduct tax at source.

Reference: Section 156. Prizes and Winnings - ITO, 2001

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