Pakistan Income Tax MCQs (With Answers)

Deduction of Tax at Source

31. Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Petroleum Products ? Section 156A Section 147 Section 148 Section 138

Explanation:
Every person who sells petroleum products to a petrol pump operator shall deduct tax from the commission or discount allowed to the operator.

Reference: Section 156A. Petroleum Products - ITO, 2001

32. Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Payments for Goods , Services and Contracts ? Section 137 Section 138 Section 153 Section 152

Explanation:
Every prescribed person shall deduct tax at source from the gross amount at the time of making payment for Goods, Services or Contracts.

Reference: Section 153. Payments for Goods , Services and Contracts - ITO, 2001

Deductible Allowances

33. Which section of the Income Tax Ordinance, 2001 deals with Zakat ? Section 59 Section 60 Section 61 Section 63

Explanation:
A person is entitled to a deductible allowance equal to the amount of Zakat paid during a tax year under the Zakat and Ushr Ordinance, 1980.

Reference: Section 60. Zakat - ITO, 2001

34. Which section of the Income Tax Ordinance, 2001 deals with Workers’ Welfare Fund ? Section 61 Section 59 Section 63 Section 60A

Explanation:
A person is entitled to a deductible allowance for any amount paid as Workers’ Welfare Fund during a tax year under the Workers’ Welfare Fund Ordinance, 1971, or under any provincial law relating to the Workers’ Welfare Fund enacted after the Eighteenth Constitutional Amendment, 2010. However, this allowance shall not apply to any Workers’ Welfare Fund paid to the provinces by a trans-provincial establishment.

Reference: Section 60A. Workers’ Welfare Fund- ITO, 2001

35. Which section of the Income Tax Ordinance, 2001 deals with Workers’ Participation Fund ? Section 61 Section 63 Section 60B Section 59

Explanation:
A person shall be entitled to a deductible allowance for any amount paid to the Workers’ Participation Fund during a tax year, in accordance with the Companies Profit (Workers’ Participation) Act, 1968, or under any provincial law relating to the Workers’ Profit Participation Fund enacted after the Eighteenth Constitutional Amendment, 2010.

Reference: Section 60B. Workers’ Participation Fund - ITO, 2001

36. Which section of the Income Tax Ordinance, 2001 deals with Deductible allowance for education expenses ? Section 59 Section 60D Section 61 Section 60A

Explanation:
An individual is entitled to claim a deductible allowance for tuition fees paid during a tax year, provided that the individual’s taxable income does not exceed Rs. 1.5 million.

Reference: Section 60D.Deductible allowance for education expenses - ITO, 2001

Filing of Return

37. Which section of the Income Tax Ordinance, 2001 deals with Wealth Statement ? Section 113 Section 114 Section 115 Section 116

Explanation:
The person is required to file a statement of assets and liabilities under section 116 of the Income Tax Ordinance, 2001.

Reference: Section 116. Wealth Statement - ITO, 2001

38. Which section of the Income Tax Ordinance, 2001 deals with Business Bank Account ? Section 114 Section 114A Section 115 Section 116

Explanation:
Every taxpayer shall declare to the Commissioner the bank account used for business transactions.

Reference: Section 114A. Business Bank Account - ITO, 2001

Enforcement of Filing of Return

39. Which section of the Income Tax Ordinance, 2001 deals with Enforcement of Filing Return ? Section 115 Section 111 Section 113 Section 114B

Explanation:
This section empowers the Board to issue an income tax general order against persons who are liable to file a return but are not on the Active Taxpayers’ List. Under this order, measures such as blocking mobile SIMs, discontinuing utility connections, or restricting foreign travel may be taken to enforce filing of the return.

Reference: Section 114B. Powers to enforce filing of returns - ITO, 2001

Advance Tax – Transitional Phase

40. Which section of the Income Tax Ordinance, 2001 deals with Advance tax on cash withdrawal ? Section 231AB Section 231C Section 233 Section 234

Explanation:
When the amount is withdrawn from the bank, advance tax will be deducted by the bank from the gross amount.

Reference: Section 231AB. Advance tax on cash withdrawal - ITO, 2001

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