Fpsc - Book - Final

QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR TAX YEAR 2017 1st EDITION Income Tax Ordinance, 2001 Sales tax Act, 1990 Federal Excise Act 2005 By:

NADEEM BUTT Chartered Accountant FCA, FPFA, B.Com.

AMAN PUBLICATIONS COMPANY

ALL RIGHTS RESERVED BY THE AUTHOR No responsibility shall be taken for any mistake, error or omission regarding any material contained in this book. 1st Edition: Tax year 2017

AUTHOR NADEEM BUTT Chartered Accountant FCA, FPFA, B.Com.

PRICE Rs. 500/-

SALIENT FEATURES OF THIS EDITION  Use of easy & understandable language.  Covers the entire syllabus of inspector inland revenue examination

FACILITY FOR ANY QUESTION OR QUERY FROM THE AUTHOR AT:  Ph No: 042-35408638  Cell: 0333 / 0301 - 4245240  E-mail: [email protected] and [email protected]

PREFACE TO THE FIRST EDITION By the grace of Almighty ALLAH and prayers of my family, friends, and students, I am presenting the 1st Edition of “Question Bank for the post of Inspector Inland Revenue by FBR”. This book is primarily for the candidate applying for the post of Inspector Inland Revenue by FBR. I am grateful to all those who contributed a lot in the completion of this book. My special thanks are due to my staff. All positive criticism with suggestions for the improvement will be entertained.

Nadeem Butt Chartered Accountant January 4, 2017

THE AUTHOR 

Mr. Nadeem Butt qualified as a Chartered Accountant in 1998 & after working with a well known professional firm as Tax Manager has started his own professional firm under the name and style Nadeem & Co. Chartered Accountants in 2007 & is practicing as Fellow member of ICAP mainly in audit, income tax & sales tax for more than 200 various corporate and non-corporate clients in Pakistan. He is also the life time member of Lahore Tax Bar Association and Audit & Tax advisor of All Pakistan Cottage Industry & Small Traders Association.



Member, (special invitees) Taxation Committee of Lahore Chamber of Commerce & Industry (LCCI).



Member education & Seminar Committee of Lahore Tax Bar Association (LTBA).



18 years post qualification teaching experience in the subjects of Taxation..



Visiting faculty member of the following professional educational institutions in providing coaching for the exams of Taxation: 1.

College of Accountancy & Professional Studies(CAPS)

Module C & F

2.

Institute of Cost & Management Accountants of Pakistan (ICMAP)

Stage – IV

3.

Institute of Chartered Accountants of Pakistan (ICAP)

Module C

4.

Rise School of Accountancy

Module C

5.

Premier DLC (A project of Beacon house)

AFC- CA

6.

The University of Lahore

M. Com.

7.

SKANS School of Accountancy

Module C

8.

Punjab Group of Colleges

M. Com.

9.

GC University, Lahore

Business Taxation Coaching



Appointed as auditor on behalf of the tax department by the Federal Board of Revenue for Special Audit Under section 4A of the repealed Income Tax Ordinance of various corporate and non-corporate entities.



Two students of Mr. Nadeem Butt (FCA) got 1st & 2ndpositions all over the Pakistan by scoring 98% & 97% marks in Taxation exam of ICMAP.



Student of Mr. Nadeem Butt (FCA) got the first gold medal in the history of SKANS School of Accountancy, Lahore in Financial Accounting Module C exam of ICAP.

INCOME TAX For FPSC Students S. No.

CHAPTERS

Page No.

1

Tax on Taxable Income

1

2

Income from Salary

4

3

Income from Property

16

4

Income from Business

26

5

Assets & Depreciation

40

6

Tax Accounting

56

7

Capital Gains

62

8

Income from Other Sources

72

9

Tax Exemptions

79

10

Losses

83

11

Deductible Allowances

95

12

Tax Credits

98

13

Collection and Recovery of Tax

107

For

SALES TAX FPSC Students

S. No.

CHAPTERS

Page No.

1

Preliminary

114

2

Scope and Payment of Tax

130

3

Registration

151

4

Book Keeping and Invoicing Requirements

157

5

Returns

166

6

Appeals

173

7

Recovery of Arrears

179

8

Miscellaneous

181

FEDERAL EXCISE DUTY S. No.

CHAPTERS

Page No. 192

1

Preliminary

2

Levy, Collection and Payment of duty

202

3

Offences & Penalties

219

4

Searches, Arrests and Seizures

228

5

Powers, Adjudication and Appeals

232

INCOME TAX – OTHER CHAPTERS For FPSC Students S. No.

CHAPTERS

Page No.

1

Fiscal Policy

244

2

Functions of FBR

253

3

Tax Administration

261

INCOME TAX ORDINANCE, 2001

TAX ON TAXABLE INCOME – Section 9 to 11

Chapter-01

MULTIPLE CHOICE QUESTIONS 1.

The Income Tax for a person for a tax year shall be the __________ income of the person for the year reduced (but not below zero) by the total of any deductible allowances. a) b) c) d)

Taxable Exempt Total None of the above

2.

The total income of a person for a tax year shall be the sum of the____________. a) income under all heads of income for the year + exempt income for the year b) Total income + exempt income c) Normal tax regime income + Final tax regime income d) Final tax regime income + Separate block of income

3.

For the purposes of the imposition of tax and the computation of total income, all income shall be classified under the following ___________heads of income. a) Income from salary + income from property b) Income from salary + income from property + Income from Business c) Income from salary + income from property + Income from Business + Capital gains d) Income from salary + income from property + Income from Business + Capital gains e) Income from salary + income from property + Income from Business + Capital gains + income from other sources

4.

The income of a person under a head of income for a tax year shall be the total of the amounts derived by the person in that year that are ______________________ to tax under the head as reduced by the total deductions, if any, allowed under this Ordinance to the person for the year under that head. a) Exempted b) Allowed c) Chargeable d) None

5.

A loss under the head of income will arise where total deductions allowed under this Ordinance to a person for a _________________ under a head of income exceed the total income chargeable to tax. a) Whole month b) Tax year

QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

1


c) d)

Chapter-01

Half year None

6.

The income of a resident person shall be computed by taking into account amount that are _________________Pakistan source income and amounts that are _____________ income. a) Only Pakistan source income b) Only foreign source income c) Pakistan source income + Foreign source income d) None of the above

7.

The income of a non-resident person shall be computed by taking into account only amounts that are _______________________. a) Foreign-source income b) Pakistan-source income c) Both Pakistan source income and foreign-source income d) None of the above


2


Chapter-01

ANSWERS 1

(a)

2

(b)

6

(c)

7

(b)

3

(e)

4

(c)

5

(b)


3

INCOME FROM SALARY [SECTION [12 to 14]

Chapter-02

MULTIPLE CHOICE QUESTIONS 1. The income received by an employee from salary income (a)

Present

(b)

Past

(c)

Future or

(d)

All of the above

--------- employer is treated as

2. Benchmark rate of interest on loan provided by the employer to his employee in tax year 2017 is: ________ (a)

1%

(b)

5%

(c)

8%

(d)

10% or

(e)

none of the above

3. The value of any right or option to acquire shares is ________. (a)

Chargeable to tax

(b)

Chargeable at a concessional rate

(c)

Not chargeable to tax or

(d)

None of the above

4. An amount required as compensation on termination of employment is a ________. (a)

Perquisite

(b)

Profit in addition to salary

(c)

Work conditions supplements or

(d)

None of the above

5. Salary income is chargeable to tax on ________ (a)

Accrual basis

(b)

Actual receipt basis or

(c)

Both (a) and (b)

6. Salary income is chargeable to tax at the rates specified in the ________schedule to the ITO, 2001. (a)

First

(b)

Second

(c)

Third or

(d)

Fourth


4


Chapter-02

7. In case an employee receive shares from a company under the employee share scheme the cost of shares would be________ (a)

Face value

(b)

Price paid by employee

(c)

Fair market value or

(d)

None of the above

8. In case of rent free accommodation the amount to be included in the salary income of the employee is ________ (a)

FM value of rent

(b)

45% of basic salary

(c)

Lower of FMR or 45% of basic salary or

(d)

Higher of FMR or 45% of basic salary

9. In case of conveyance provided by the employer to his employee for business use, amount to be included in salary is________ (a)

10% of FMV of car

(b)

5% of cost of car

(c)

Higher of cost or FMR or

(d)

None of the above

10. Where an employee has a salary income with bonus, the bonus received shall be ___________salary income: (a)

Included in

(b)

Excluded from

(c)

Ignored for

11. In case of rent free accommodation, amount to be included in the salary income of the employee is ____________. (a)

10% of basic salary

(b)

20% of basic salary

(c)

25% of basic salary

(d)

45% of basic salary

12. The amount expended by the employer on leave fare assistance is included in the salary income of the employee _______. (a)

Whole

(b)

Half

(c)

Proportionate

(d)

None of these


5


Chapter-02

13. An employee is entitled to deduct ________ incurred in deriving salary income. (a)

travelling expenses

(b)

personal expenses

(c)

entertainment expenses

(d)

None of above

14. House rent allowance provided by employer to his employees is _______. (a)

taxable

(b)

not taxable

(c)

exempt up to 45% of basic salary

(d)

none of the above

15. Tax free salary paid to an employee will be included in the _________of the employee. (a)

business income

(b)

tax payable

(c)

salary

(d)

income from other sources

16. An amount of perquisite is treated as received by an employee if it is paid _____. (a)

to him

(b)

applied on his behalf

(c)

to any person on his behalf

(d)

all of above

17. Entertainment allowance for official performance received by the employee is _______. (a)

exempt

(b)

taxable

(c)

50% exempt

(d)

80% taxable

18. The option available to an employee in respect of salary ________ shall be exercised in writing. (a)

received in arrears

(b)

for the current year

(c)

to be received in next year

(d)

none of the above


6


Chapter-02

19. The utilities provided by the employer to his employee are chargeable to tax under the head _____________ of employee. (a)

Income from salary

(b)

Other sources

(c)

Income from business

(d)

Income from utilities

20. Gross salary consists of _______. (a)

basic salary

(b)

perquisites

(c)

profit in lieu of or addition to salary

(d)

all of the above

21. When the employer charges a _____ interest rate than the benchmark rate, then nothing shall be included in the salary income of the employee. (a)

higher

(b)

lower

(c)

equal

(d)

both ‘a’ or ‘c’

22. Under “employee share scheme” shares can only be issued to the ______ of the company. (a)

employees

(b)

directors

(c)

shareholders

(d)

chief executive

23. The right or option given to an employee ________. (a)

is always free of cost

(b)

is chargeable to tax as business income

(c)

is chargeable to tax as property income

(d)

none of above

24. An employee may be a person who is engaged in __________. (a)

employment

(b)

business

(c)

trading

(d)

all of above

25. If the insurance premium of the employee paid by the employer then it should be included in the _____ income of the employee. QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

7


(a)

business income

(b)

salary income

(c)

property income

(d)

insurance income

Chapter-02

26. In case of the self-hiring of the property, it has ____ effect(s) under the law on the income of the recipient. (a)

one

(b)

two

(c)

three

(d)

no

27. In case of golden handshake, employee has option to offer the amount of golden handshake as _________. (a)

SBI under NTR

(b)

FTR

(c)

income from business

(d)

all of the above

28. The Commissioner Inland Revenue is empowered to charge tax on the salary income of the employee of a private limited Company on ______ basis where he has reason to believe that the salary income has deliberately been deferred. (a)

cash

(b)

accrual

(c)

tax

(d)

accounting

29. A salaried person income is taxable @ 0%, if his / her annual income is equal or less than _______. (a)

1,000,000

(b)

350,000

(c)

400,000

(d)

500,000

30. Commission paid to a part time employee director is chargeable to tax under the head ______ of such director. (a)

salary income

(b)

commission income

(c)

property income


8


(d)

Chapter-02

all of above

31. Any amount payable by employee to employer that has been waived of by the employer is _______ in the hands of the employee. (a)

not taxable

(b)

taxable

(c)

exempt

(d) all of above 32. Any salary received by an employees in a tax year, other than salary that is exempt from tax under this ordinance, shall be chargeable to tax in that year under the head __________________ a) Salary b) Pay c) Income d) All of these 33. Salary means any amount received by an employee from any employment, whether of a revenue of capital nature, including____________________ a) Any pay, wages or other remuneration provided to and, including leave pay, payment in lieu of leave, overtime payment, bonus, commission, fees, gratuity of work condition supplements b) Any perquisite, whether convertible to money or not; c) The amount of any allowance provided by an employer to an employee including a cost of living, subsistence, rent, utilities, education, entertainment or travel allowance, but shall not include any allowance solely expended in the performance of the employee’s duties of employment d) All of above. 34. The amount of any expenditure incurred by an employee that paid or reimbursed by the employer, other than expenditure incurred on behalf of the employer in the performance of the employee’s duties of employment comes under the definition of ________________________ a) Income b) Salary c) Tax d) All 35. Salary can be the amount of any profits in lieu of , or in addition to, salary or wages, including any amount received ________________________ i. ii.

As consideration for a person’s agreement to enter into an employment relationship; As consideration for an employee’s agreement to any conditions of employment or any changes to the employee’s conditions of employment


9


a) b) c) d)

Chapter-02

Only (i) Only (ii) Both (i) & (ii) None of the above

36. Where an employer agrees to pay the tax chargeable on an employee’s salary, the amount of the employee’s income chargeable under the head _________________ shall be grossed up by the amount of tax payable by the employer a) b) c) d)

Pay Income Salary None

37. No deduction shall be allowed for any expenditure incurred by an employee in deriving amounts chargeable to tax under the head ___________________. a) b) c) d)

Business income Property income Income from salary Income from other sources

38. For the purposes of Income Tax Ordinance the amount or perquisite shall be treated as received by an employee from any employment regardless of whether the amount or perquisite is paid or provided____________________________ a) By the employee’s employer, and associate of the employer or by a third party under an arrangement with the employer or an associate of the employer b) By a past employer or a prospective employer; or c) To the employee or to an associate of the employee d) All of the above 39. An employee who has received an amount as compensation for loss of employment in a tax year may, by notice in writing to the commissioner elect for the amount to be taxed at the average rate on taxable income for the three _____________________ tax years. a) b) c) d)

Following preceding current none of the above


10


Chapter-02

40. An election under income tax Ordinance shall be made by the due date for furnishing the employee’s return of income or employer certificate, as the case may be , for the tax year in which the amount was received or by such later date as the ___________ may allow. a) b) c) d)

Assistant Commissioner In land Revenue Deputy Commissioner In land Revenue Commissioner In land Revenue Commissioner In land Revenue (Appeals)

41. For the purposes of computing the income of an employee for a tax year chargeable to tax under the head salary, the value of any perquisite provided by an employer to the employee in that year that is included in the employee’s salary under ___________________ of the Income Tax Ordinance, 2001. a) b) c) d)

section 22 section 32 section 12 none of the above

42. Where, in a tax year, a motor vehicle is provided by an employer to an employee wholly or partly for the __________ use of the employee, the amount chargeable to tax to the employee under the head salary income for that year shall be 5% of the cost of motor vehicle to the employer. a) b) c) d)

private official both a & b none

43. Where, in a tax year, the services of a housekeeper, driver, gardener or other domestic assistant is provided by an employer to an employee, the amount chargeable to tax to the employee under the head ____________for that year shall include the total salary paid to the domestic assistant such house keeper, driver, gardener or other domestic assistant in that year for services rendered to the employee, as reduced by any payment made for such services. a) b) c) d)

services salary Record None

44. Where, in a tax year __________________________ are provided by an employer to an employee, the amount chargeable to tax to the employee


11


Chapter-02

under the head Salary for that year shall include the fair market value of the utilities provided, as reduced by any payment made by the employee for the utilities. a) b) c) d)

services pay utilities none

45. Where a loan is made, on or after the 1st day of July 2002, by an employer to an employee then such loan shall not be less than from the __________ benchmark rate. a) b) c) d)

5% 9% 15% 10%

46. The amount chargeable to tax to the employee under the head salary regarding loan from employer during the tax year shall include an amount equal to ______________________. a) The profit on loan computed at the benchmark rate, where no profit on loan is payable by the employee. b) The difference between the amount of profit on loan paid by the employee in that tax year and the amount of profit on loan computed at the benchmark rate. c) Both a & b d) None 47. Where a motor vehicle is available to more than one employee for a tax year, the amount chargeable to tax under the head Salary for each such employee for that Year shall be the amount determined divided by the ______ of employees permitted to use the vehicle. a) b) c) d)

Number Owner Authority All

48. Where, in a tax year, an obligation of an employee to pay or repay an amount owing by the employee to the employer is waived by the employer, the amount chargeable to tax to the employee under the head ____________for the year shall include the amounts so paid or waived. a) Salary income


12


Chapter-02

b) Income from property c) Capital gains d) None of the above 49. Where, in a tax year, property is transferred or services are provided by an employer to an employee, the amount chargeable to tax to the employee under the head Salary for that year shall include the _____________________ of the property or services determined at the time the property is transferred or the services are provided, as reduced by an payment made by the employee for the property or services. a) b) c) d)

fair market value sale value purchase value all

50. Where, in a tax year, an employee is issued with shares under an employee share scheme including as a result of the exercise of an option or right to acquire the shares; the amount chargeable to tax to the employee under the head Salary for that year shall include the fair market value of the shares determined at the date of issue as reduced by any consideration given by the employee for the shares including any amount given as consideration for the grant of a right or option to ____________ the shares., a) b) c) d)

Sale Acquire Purchase None

51. Benchmark rate can also means the state Bank of Pakistan discount rate at the ____________ of the tax year; a) Commencement b) End c) Middle d) None 52. Which one is not included in salary received by an employee from employment a) Commission income b) Overtime payment c) Payment in lieu of leave d) Reimbursement of job related expenses 53. Salary is always taxable at a) Receipt basis


13


Chapter-02

b) Accrual basis c) Can be at receipt or at accrual basis d) None of the above 54. Tax paid by employer for employee shall be a) Included in salary b) Fully exempt from tax c) Partially exempt from tax d) Employer is not allowed to pay tax by law 55. Payment receipt under golden handshake scheme a) b) c) d)

Can be taxable at fixed rate defined by law Can be taxable at slab rates of non salaried individuals Can be taxable at average tax rate of last three years Can be taxable at the tax rate of last year

56. Employee Loan from employer at less than benchmark rate shall be taxable a) If amount is less than 500,000 b) If more than 500,000 c) Any loan receipt by employee d) Shall not be taxable 57. Value of right share is a) Taxable at actual value of share b) Value of right share c) Higher of actual or right amount d) Not taxable


14


Chapter-02

ANSWERS 1

(d)

2

(d)

3

(c)

4

(d)

5

(b)

6

(a)

7

(b)

8

(d)

9

(d)

10

(a)

11

(d)

12

(a)

13

(d)

14

(a)

15

(c)

16

(d)

17

(a)

18

(a)

19

(a)

20

(d)

21

(d)

22

(a)

23

(d)

24

(a)

25

(b)

26

(b)

27

(a)

28

(b)

29

(c)

30

(a)

31

(b)

32

(a)

33

(d)

34

(b)

35

(c)

36

(c)

37

(c)

38

(d)

39

(b)

40

(c)

41

(c)

42

(c)

43

(b)

44

(c)

45

(d)

46

(c)

47

(a)

48

(a)

49

(a)

50

(b)

51

(d)

52

(d)

53

(a)

54

(a)

55

(c)

56

(b)

57

(d)


15

INCOME FROM PROPERTY [SECTION [15, 15A & 16]

Chapter-03

MULTIPLE CHOICE QUESTIONS Q.1 _______________ is taken as rent chargeable to tax. (a)

Actual rent

(b)

Fair market rent

(c)

Higher of FMR and actual rent plus 1/10th of non-adjustable advance, if any

(d)

Lower of FMR and actual rent

Q.2 ____________ part of advance not adjustable against rent is charged to tax every year. (a)

10%

(b)

5%

(c)

12%

(d)

50%

Q.3 Advances adjustable against rent_____________ the future rent chargeable to tax. (a)

Increase

(b)

Decrease

(c)

Has no effect

Q.4 The amount received by employee to vacate the possession less amount for taking the possession is charged to tax under__________ in ten equal proportions in the succeeding 10 years. (a)

Income from other sources

(b)

Property income.

(c)

Business income

(d)

None of these

Q.5 The income of the persons having definite share in a joint property shall be taxed_________. (a)

As association of person

(b)

The respective share in the hands of the members

(c)

None of the above

Q.6 Where the rent includes charges for utilities, then __________should be charged to tax under income from property. (a)

Whole of the rent

(b)

Rent less amount for utilities

(c)

Rent less expenditure for utilities.


16


(d)

Chapter-03

(b) or (c)

Q.7 The property income is taxable __________ (a)

Under SBI

(b)

Under NTR

(c)

SBI under FTR

(d)

None of above

Q.8 An individual will not pay tax if his income under the head property is_____________. (a)

Zero

(b)

Rs.200,000

(c)

Rs.100,000

(d)

Rs.150,000

(e)

None of these

Q.9 Income tax is charged @ __________ of rent chargeable to tax (after admissible deductions u/s 15A) till Rs. 400,000 received by a Company (other than a small company). (a)

0%

(b)

5%

(c)

7%

(d)

31%

(e)

none of the above

Q.10 Deduction for__________is allowed to a company while computing income under the head property. (a)

1/5th repair allowance

(b)

Insurance premium for property damage

(c)

Property tax for property

(d)

All of the above

Q.11 If tax at source has been deducted or not from rent received even then the rent received shall taxable under_________ for a company. (a)

FTR

(b)

NTR

(c)

Separate block of income

(d)

None of above


17


Chapter-03

Q.12 ____________of the forfeited deposit against sale of property is included in the rent chargeable to tax. (a)

25%

(b)

50%

(c)

75%

(d)

100%

Q.13 The rent of the building let out together with the plant and machinery installed therein is taxable under ____________. (a)

Property income

(b)

Business income

(c)


Q.14 Legal charges paid by the owner (company) of property are allowed as deduction against property income under____________. (a)

NTR

(b)

FTR

(c)

Not allowed

(d)

all of these

Q.15 In case where the property is hired by the employee and rent is payable by the employer then _________ shall be included in the salary income of the employee. (a)

Actual rent

(b)

Fair market value of rent

(c)

none of these

Q.16 Where the employee or his / her spouse is the owner of the building and that building has been provided by the employer against the entitlement of the rent free accommodation then it has ________________. (a)

One effect

(b)

two effects

(c)

no effect

Q.17 Obligation of the owner paid by the tenant included in the property income of the ___________ in the respective tax year, where the same is as per terms of rent deed. (a)

Owner of the property

(b)

Tenant

(c)

None of these


18


Chapter-03

Q.18 Property income received by subletting of property by the tenant is taxable under______________. (a)

Property income

(b)


(c)

FTR

Q.19 If portion of the rent and utilities cannot be segregated from each other then expenses incurred for provision of utilities shall (a)

Be deducted from rent

(b)

not be deducted from rent

Q.20 The property income (after allowable deductions u/s 15A) of a small company is taxable @ __________. (a)

35%

(b)

25%

(c)

33%

Q.21 The amount received for utilities _________________, only if separable. (a)

Income from property

(b)


(c)


is

taxable

under

the

head

Q.22 The repair charges and insurance premium paid by a individual shall ____________________ against rent chargeable to tax. (a)

Allowed as deduction

(b)

Not be allowed

(c)

1/10th is allowed

(d)

None of the above

Q.23 The amount received for utilities is taxable under the head income from __________. (a)

Salary

(b)

Property

(c)

Other sources

(d)

Business

Q.24 1/10th of any amount of advance received by the owner as advance ________ against rent is included in rent chargeable to tax. (a)

Adjustable

(b)

Not adjustable


19


(c)

payable

(d)

Receivable

Chapter-03

Q.25 Security received as an advance is ________ against rent. (a)

Adjustable

(b)

Not adjustable

(c)

payable

(d)

Receivable

Q.26 Amount received by tenant for vacating the possession, less amount already paid is chargeable to tax under the head Income from ____________. (a)

Salary

(b)

Property

(c)

Other sources

(d)

Business

Q.27 If the employee owned property after renting out to employer has been given to the employee for accommodation then in such case the actual rent shall be taxable in the hands of employee without comparing it with the ________. (a)

FMV

(b)

Market value

(c)

Cost of asset

(d)

None of the above

Q.28 Rent chargeable to tax includes ______________. (a)

amount forfeited under an agreement for sale of property

(b)

Accommodation allowance received from employer

(c)

Ground rent

(d)

None of above

Q.29 Rent ________ is taxable against property income. (a)

Received

(b)

Receivable

(c)

payable

(d)

Both ‘a’ and ‘b’

Q.30 Ground rent is chargeable to tax under the head “income from _________”. (a)

Other sources

(b)

Salary

(c)

Property


20


(d)

Chapter-03

Business

Q.31 Amount received from vacating possession is charged to tax in ten years in _______ proportion. (a)

Equal

(b)

Unequal

(c)

None of above

Q.32 Share of each person is taxable as ___ in case of property in co ownership. (a)

FTR

(b)

NTR

(c)

SBI under NTR

(d)

All of above

Q.33 Rent chargeable to tax is _________ actual rent or FMR plus 1/10th of non adjustable advance. (a)

Equal to

(b)

Higher of

(c)

Lower of

(d)

None of above

Q.34 Any forfeited deposit received under a contract of sale of property by the owner of such property is taxable under the head “income from _______”. (a)

Property

(b)

Other sources

(c)

Salary

(d)

Business

Q.35 Income from any rent from agricultural building derived will be treated as income from ______. (a)

Property

(b)

Other sources

(c)

Agricultural income

(d)

None of above

Q.36 The rent received or receivable by a person a tax year, other than rent exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head ______________. (a) Income from property (b) Income & property (c) Income with property (d) None QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

21


Chapter-03

Q.37 Rent means any amount received or receivable by the owner of land or a building as consideration for the use or occupation of, or the right to use or occupy, the land or building, and includes any _____________________ deposit paid under a contract for the sale of land or a building. (a) Forfeited (b) Adjustable (c) Non adjustable (d) None Q.38 This income from property section shall not apply to any rent received or receivable by any person in respect of the __________________ of a building together with plant and machinery and such rent shall be chargeable to tax under the head Income from Other Sources. (a) Sale (b) Purchase (c) Lease (d) None Q.39 Where any amount is included in rent received or receivable by any person for the provision of ___________________________ or any other service connected with the renting of the building, such amount shall be chargeable to tax under the head Income from other sources. (a) Contracts (b) Utilities (c) goods (d) All of these Q.40 Where the rent received or receivable by a person is less than the fair market rent for the property, the person shall be treated as having derived the ____________for the period the property is let on rent in the tax year. (a) Fair market rent (b) Market rent QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

22


Chapter-03

(c) Actual rent (d) None of the above Q.41 Non- adjustable amounts received in relation to buildings, where the owner of a building receives from a tenant an amount which is not adjustable against the rent payable by the tenant, the amount shall be treated as rent chargeable to tax under the head Income from property in the tax year in which it was received and the following nine tax years in ______________________ proportion. (a) Greater (b) Lower (c) Equal (d) None Q.42 Where an amount received ________________ by the owner to the tenant on termination of the tenancy before the expiry of ten years, no portion of the amount shall be allocated to the tax year in which it is refunded or to any subsequent tax year except as provided for in sub-section (a) Is refunded (b) Is not refunded (c) None Q.43 which one of the following is not included in the head income from property (a) Rent received (b) Rent receivable (c) Income from sale of property (d) Any forfeited deposit Q.44 Rent received in respect of lease of building together with plant and machinery by individual is taxable under the head (a) Income from business (b) Income from property (c) Income from other source (d) Income from capital gain


23


Chapter-03

Q.45 If a person received rent less than fair market value, ------ is taxable (a) Actual rent received (b) Fair market value (c) Depends on circumstances (d) None of the above Q.46 Deduction under the head income from property to an individual is not allowed for (a) Repair and maintenance allowance (b) Property tax paid (c) Collection charges (d) All of the above


24


Chapter-03

ANSWERS 1 6 11 16 21 26 31 36 41 46

(c) (b) (c) (b) (b) (c) (a) (a) (c) (d)

2 7 12 17 22 27 32 37 42

(a) (a) (d) (a) (b) (a) (c) (a) (a)

3 8 13 18 23 28 33 38 43

(c) (b) (c) (b) (c) (a) (b) (c) (c)

4 9 14 19 24 29 34 39 44

(a) (d) (a) (a) (b) (d) (a) (b) (c)

5 10 15 20 25 30 35 40 45

(b) (d) (c) (b) (b) (a) (c) (a) (b)


25

INCOME FROM BUSINES – Section 18, 19, 20, 21, 26 to 31

Chapter-04

MULTIPLE CHOICE QUESTIONS Q.1 Any payment made on account of salary exceeding Rs.15,000 per month is not allowed as a deduction against business income if made through (a)

Cross cheque

(b)

Online transfer

(c)

Cash

(d)

Pay order

Q.2 Any donation to an approved institution is allowed as straight deduction against business income by (a)

Full amount

(b)

Half amount

(c)

Proportionate basis

(d)

Amount calculated on average rate basis

Q.3 A deduction against business income is allowed for (a)

Provision for bad debts

(b)

Actual bad debts

(c)

Appropriation of profits

Q.4 Income tax is an (a)

Expense

(b)

Provision against profits

(c)

Appropriation of profits

Q.5 The expenditure or loss that was allowed as deduction if subsequently received is included in the income of the year (a)

In which it was allowed as expense

(b)

In which it is received

(c)

Following the year of receipt

(d)

None of these

Q.6 A company is allowed a deduction on account of depreciation for (a)

Depreciable assets

(b)

Intangibles

(c)

Pre-commencement expenditures


26


(d)

Chapter-04

All of these

Q.7 Cash discount received is taxable under the head (a)


(b)

Income from Capital Gains

(c)


(d)

Not taxable

Q.8 Income from Business may be taxable under (a)

FTR

(b)

NTR

(c)

Separate block

(d)

All of the above

(e)

Both (a) and (b)

Q.9 An income received by the lessor in connection with the lease is taxable under (a)


(b)


(c)


(d)

None of these

Q.10 Income from business comprises of (a)

Income from speculation business

(b)

Income from non-speculation business

(c)


(d)

None of these

Q.11 A person is required to deduct tax at source, where applicable in respect of payments against (a)

Salary

(b)

Rent

(c)

Dividend

(d)

All of these

(e)

Only (a) and (c)


27


Chapter-04

Q.12 _______ allowed as deduction against business income (a)

Accounting depreciation

(b)

Tax depreciation

(c)

Both of these

(d)

None of these

Q.13 Any payment made to the employees as _______ will be allowed as deduction to employer. (a)

Brokerage

(b)

Commission

(c)

Salary

(d)

all of the above

Q.14 Single transaction not exceeding _____ are allowed as deduction against business income (a)

5,000

(b)

1,000

(c)

10,000

(d)

20,000

Q.15 Income tax is allowed as deduction against business income in the year (a)

In which income is earned

(b)

In the following year

(c)

Not allowed

(d)

None of these

Q.16 Apportionment of common expenditure is necessary when income is derived from _______ class of income (a)

One

(b)

Two

(c)

Three

(d)

More than one


28


Chapter-04

Q.17 If a liability in respect of an expense allowed as deduction is not paid within ______, it shall be treated as income in the year on expiry of the said ____________. (a)

One year

(b)

Two years

(c)

Three years

(d)

Four years

Q.18 In case the asset is not owned by the lesser, amount received in connection with the lease is taxable under (a)


(b)


(c)


(d)

Capital gains

Q.19 The amount of deduction allowed on account of bad debts may be _______ to trade debtors (a)

Higher

(b)

Less

(c)

Equal

(d)

Both ‘b’ and ‘c’

Q.20 An amalgamation company is allowed a deduction on account of __________ (a)

Legal expenses

(b)

Selling expenses

(c)

Management expenses

(d)

None of these

(e)

Only (a) and (c)

Q.21 Where a person has been allowed a deduction in respect of a trading liability then the benefits from such liability shall be chargeable to tax under____________. (a)

Business Income

(b)


(c)

none of these.


29


Chapter-04

Q.22 Any expenditure incurred on training of any Pakistani in connection with a scheme specially approved by Board for the purpose of business is __________ (a)

Deductible

(b)

not deductible

Q.23 Expenditure incurred on the rental of a building for the scientific research, outside the Pakistan are __________ (a)

Allowable expenditure under IFB

(b)

Allowable Expenditure under Income from other Sources

(c)

Not allowable

Q.24 If the lease rentals have been paid to the ____________then it shall be an allowable expenditure to the taxpayer. (a)

Schedule Banks

(b)

Modaraba

(c)

Both of them

Q.25 __________ value of any benefit or perquisite arising from the past, present or prospective business relationship is chargeable under the head (a)

Business Income

(b)


(c)

None of these

Q.26 The function of buying and selling of financial securities by the dealer is called __________ (a)

Jobbing

(b)

Arbitrage

(c)

Both

Q.27 Repair Charges and insurance premium of any asset used for the business and private purposes are _______under the head of business income (a)

Allowable

(b)

Not allowable

(c)

Proportionately allowed


30


Chapter-04

Q.28 Provisions and P and L appropriations items are ________ expense. (a)

Allowable

(b)

Not allowable

(d)

Manufacturing

(d)

Factory

Q.29 Which of the following expenses is not admissible? (a)

Provision for doubtful debts

(b)

Bad debts

(c)

Penalty

(d)

Both ‘a’ and ‘c’

Q.30 Depreciation is allowed as per ___________. (a)

Accounts

(b)

Tax

(c)

Estimates

(d)

not allowed

Q.31 Which of the following donations are allowed as straight deduction? (a)

donation to unapproved institution

(b)

Donation to institution under section 61

(c)

Donation to institution specified in clause 61

(d)

None of above

Q.32 In an AOP the members are allowed only to receive ___________. (a)

Salary

(b)

Commission

(c)

Profit on debt

(d)

None of above

Q.33 Depreciation is allowed as per _____ schedule of the Income Tax Ordinance, 2001 (a)

1st

(b)

2nd


31


(c)

3rd

(d)

4th

Chapter-04

Q.34 Expenses other than utility, postage and freight charges must be paid through cross cheques where any of them exceeds Rs.______. (a)

8,000

(b)

10,000

(c)

5,000

(d)

6,000

Q.35 Any expenditure is admissible if the same is wholly and exclusively __________. (a)

For business

(b)

For personal use

(c)

For personal expenses of members in case of AOP or company

(d)

All of above

Q.36 Where the bad debts are recovered from the amount not allowed earlier then the same would be ___________. (a)

Included in taxable income

(b)

Ignored

(c)

Reversed from accounting profit

(d)

All of above

Q.37 Any amount received by a banking company or a non-Banking finance company out of profit on debt is taxable under income from _________. (a)

Salary

(b)

Property

(c)

Business

(d)

Other sources

Q.38 Expenses on entertainment of foreign customers and suppliers are ________. (a)

Admissible

(b)

Not admissible


32


(c)


(d)

None of above

Chapter-04

Q.39 Any expenditure (unless otherwise stated) under a single account head exceeding Rs.50,000 is admissible if the payment is made only through ___________. (a)

Cash

(b)

Cross cheque

(c)

Bearer cheque

(d)

All of above

Q.40 For tax purposes, business does not include ___. (a)

Employment

(b)

Trading

(c)

Manufacturing

(d)

Service providing

Q.41 Income from speculation business is kept separate from _____ business incomes. (a)

Non-speculation business

(b)

Other speculation business

(c)

Trading business

(d)

Business of service providing

Q.42 Arbitrage is a _________________. (a)

Speculation business

(b)

Non-speculation business

(c)

Illegal business

(d)

None of above

Q.43 Salary paid to sleeping partner of AOP is __________. (a)

Admissible

(b)

Not admissible

(c)

None of above


33


Chapter-04

Q.44 Any amalgamated company is allowed a deduction against ________ in respect of all expenses incurred by it. (a)

Business income

(b)

Salary income

(c)

Property income

(d)

All of above

Q.45 The financial cost of securitization incurred by the ___ is allowed as an admissible deduction. (a)

APV

(b)

SPV

(c)

Bank

(d)

Financial institution

Q.46 Which of the following is allowed as deductible allowance against business income? (a)

WWF

(b)

WPPF

(c)

Zakat under Zakat and Usher Ordinance

(d)

all of above

Q.47 Tax credit is allowed on donation to ___________. (a)

Beggars

(b)

Financial institution

(c)

Banks

(d)

Approved institution u/s 61

Q.48 Any expenditure in nature of fine or penalties for violation of any law is _________ against business income. (a)

Admissible

(b)

Inadmissible

(b)

Both ‘a’ or ‘b’

(c)

None of above

Q.49 _______ receipts mean all receipts less deduction of expenditures.


34


(a)

Gross

(b)

net

(c)

final

(d)

all of above

Chapter-04

Q.50 If any expenditure is allowed as business expense however the liability against the same has not been paid within ____ years including the year of its allow-ability then the same will be treated as income of the taxpayer after expiry of the ____ years. (a)

5

(b)

3

(c)

10

(d)

15

Q.51 If a deduction is allowed as expense and subsequently any benefit against the same, such as cash discount received then the same will be taxable under the head income from _____. (a)

Business

(b)

Other sources

(c)

Salary

(d)

Property

Q.52 The following incomes of a person for a tax year, other than income exempt from tax under this ordinance, shall be chargeable to tax under the head __Income from Business. (a) The profits and gains of any business carried on by a person at any time in the year; (b) Any income derived by any trade, professional or similar association from the sale of goods or provision of services to its members; (c) Any income from the hire or lease of tangible movable property. (d) All of above Q.53 The word benefit includes any benefit derived by way of waiver of profit on debt or the debt itself under the State Bank of Pakistan Banking policy Department’s Circular No.29 of 2002 or in any other scheme issued by the ____________. (a) State Bank of Pakistan (b) High court (c) Board


35


(d)

Chapter-04

None

Q.54 Any expenditure allowed to a person to earn business income as a deduction ________________ allowed as a deduction in computing the income of the person chargeable to tax under any other head of income. (a) Shall be (b) Shall not be (c) May be (d) None Q.55 The provisions of __________________ shall apply in determining the deductions allowed to a person in determining the deductions allowed in computing the income of a person chargeable to tax under the head Income from Business. (a) Section 20 (b) Section 21 (c) Section 22 (d) Section 23 Q.56 Any profit on debt derived by a person where the person’s business is to derive such income _____________ chargeable to tax under the head income from Business and not under the head Income from Other Sources. (a) Shall be (b) Shall not be (c) Shall be (d) None Q.57 _________________ shall apply as if the profits and gains arising from a speculation business were a separate head of income. (a) Section 47 (b) Section 57 (c) Section 19 (d) None Q.58 Any profits and gains arising from the speculation business for a tax year computed shall be _______________ in the person’s income chargeable to tax under the head Income from Business for that year. (a) Excluded (b) Exempted (c) Included (d) None Q.59 Any loss of the person arising from the speculation business sustained for a tax year computed shall be dealt with under ____________. (a) Section 50 (b) Section 56


36


Chapter-04

(c) Section 57 (d) Section 58 Q.60 Where the expenditure is incurred in acquiring a depreciable asset or an intangible with a useful life of more than one year or Is pre-commencement expenditure, the person must depreciate or amortise the expenditure in accordance with _____________. (a) Section 47 (b) Section 57 (c) Section 67 (d) None Q.61 Loss of income from business can be carry forward for (a) Six years (b) Thirteen years (c) Fifteen years (d) Can’t be carry forward Q.62 Loss of Speculation business can be adjusted against (a) Income of speculation business (b) Income of non speculation business (c) Income under five heads of income (d) Can’t be adjusted Q.63 Deduction under the head income from business is allowed if (a) Incurred wholly and exclusively for the purpose of business (b) Partially incurred for the purpose of business (c) Incurred for the owner of the business (d) None of the above Q.64 Income tax paid is deductable allowance in the head (a) Income from business (b) Income from property (c) From which it relates (d) Is not a deductable allowance Q.65 Freight charges in excess of 70,000 is (a) Not deductable allowance (b) Deductable allowance if paid through banking channel (c) Deductable allowance if paid through cross cheque


37


Chapter-04

(d) Is deductable allowance Q.66 Advertisement and publicity expenditure exceeding 5% of turnover is not deductable allowance for (a) (b) (c) (d)

Textile mills and pharmaceuticals company Paper and paperboard Manufacturers of pharmaceuticals products None of the above

Q.67 Mr. A earned 50 rupees profit under income from business in Pakistan and 30 rupees loss in under the head capital gain. Can Mr. A set of his loss? (a) (b) (c) (d)

Yes No Depends on nature of securities Depends on the will of commissioner

Q.68

Where the amount received exceeds a deduction as a bad debt and the amount previously allowed (a) Remaining amount shall be considered as bad debt (b) Remaining amount shall be included in person income (c) Has no treatment in tax (d) None of the above

Q.69

Profit on debt paid by lessee for leased asset is (a) Only deductible allowance (b) Not deductible allowance (c) Rentals are allowed as admissible expenditure (d) Only depreciation is deductible allowance

Q.70

Bad debts are allowed a deduction for a bad debt in a tax year for (a) Amount was previously included in persons income (b) In respect of money lent by a financial institution in deriving income from business (c) Both A and B (d) None of the above


38


Chapter-04

ANSWERS 1 6 11 16 21 26 31 36 41 46 51 56 61 66

(c) (a) (d) (d) (a) (b) (c) (c) (a) (d) (a) (a) (a) (c)

2 7 12 17 22 27 32 37 42 47 52 57 62 67

(d) (a) (b) (c) (a) (c) (d) (c) (b) (d) (d) (c) (a) (b)

3 8 13 18 23 28 33 38 43 48 53 58 63 68

(b) (e) (d) (b) (c) (b) (c) (a) (b) (b) (a) (a) (a) (b)

4 9 14 19 24 29 34 39 44 49 54 59 64 69

(b) (b) (c) (d) (c) (d) (b) (b) (a) (b) (b) (d) (d) (c)

5 10 15 20 25 30 35 40 45 50 55 60 65 70

(b) (c) (c) (e) (a) (b) (a) (a) (b) (b) (b) (d) (d) (c)


39

ASSETS & DEPRECTION – Section 22 to 25

Chapter-05

MULTIPLE CHOICE QUESTIONS Q.1. Pre commencement expenditure is a_______________. (a)

Fictitious asset

(b)

Depreciable asset

(c)

Eligible depreciable asset

(d)

None of these

Q.2. Disposal consideration on sale of an asset is (a)

Amount received on sale

(b)

FMV

(c)

Lower of FMV and amount received

(d)

Higher of FMV and amount received

Q.3. Disposal consideration in case of lost asset comprises of______________. (a)

Salvage value

(b)

Insurance claim

(c)

Both ‘a ‘and ‘b’

(d)

None of these

Q.4. An approved leasing company is the one approved by _________________. (a)

FBR

(b)

SECP

(c)

CIR

(d)

Provincial government

Q.5. Depreciation calculated under _________ is allowed as deduction against business income. (a)

First schedule

(b)

Second schedule

(c)

Third schedule

(d)

Fourth schedule

Q.6. FMV is determined in relation to _______________. (a)

Property

(b)

Services


40


(c)

Perquisites

(d)

All of these

Chapter-05

Q.7. In case of an asset partly used only for business then depreciation will be allowed as deduction on _________basis. (a)

Full year

(b)

Half year

(c)

Proportionate

(d)

Not allowed

Q.8. The depreciation charged in case of non-depreciable asset used wholly for business would be _______. (a)

Zero

(b)

Half

(c)

Full

(d)

Proportionate

Q.9. The question of depreciation allowance does not arise if the income from business is ____________. (a)

Permanently exempt

(b)

Exempt for specific period

(c)

not exempt

(d)

all of the above

Q.10. Initial allowance on eligible depreciable assets (plant and machinery) is allowed at the rate of _________of asset. (a)

40% of cost

(b)

40% of FMV

(c)

50% of WDV

(d)

25% of Cost

Q.11. In case of assets with a useful life of one year, depreciation is ___________allowed: (a)

Not

(b)

On full year basis

(c)

Proportionate basis


41


(d)

Chapter-05

All of these

Q.12. The initial allowance for depreciation is allowable for ___________. (a)

Depreciable assets

(b)

Eligible depreciable assets

(c)

Intangibles

(d)

All of these

Q.13. Depreciation u/s 22 on assets partly for personal and partly for business use is allowable on basis (a)

Monthly

(b)

Half yearly

(c)

Quarterly

(d)

Annual

(e)

Proportionate

Q.14. Where an intangible is not used for the business for the whole year, then amortization deduction would be on ______basis. (a)

Half of the charge

(b)

Full year charge

(c)

Proportionate

(d)

None of these

Q.15. A person shall be allowed a deduction of amortization of precommencement expenditure on straight line basis at_______. (a)

10%

(b)

20%

(c)

25%

(d)

50%

Q.16. Amortization in any case cannot be___________ intangible. (a)

Equal

(b)

Less

(c)

Higher

(d)

None of these

to / from total cost of


42


Chapter-05

Q.17. A deduction for amortization is allowed only when the intangible has a useful life of _________. (a)

Less than one year

(b)

Equal to one year

(c)

Higher than one year

(d)

Indefinite period

Q.18. In case of export of an asset, disposal consideration would be treated as the __________________. (a)

Cost of asset

(b)

FMV at the time of export

(c)

Consideration received

(d)

None of these

Q.19. The cost of passenger transport vehicles plying for hire for depreciation purposes would be equal to ____. (a)

Actual cost

(b)

Rs. 2,500,000

(c)

Higher of actual cost and 2,500,000

(d)

Lower of 2,500,000

Q.20. Initial allowance for depreciation on passenger transport vehicles not plying for hire is _______________. (a)

Allowed in the first year

(b)

Allowed in last year

(c)

Not allowed

(d)

none of these

Q.21. In case of intangibles not used for the whole year, amortization allowed would be ___________. (a)

or the full year

(b)

Not to charged

(c)

Charged on number of days basis

(d)

none of the above


43


Chapter-05

Q.22. Any gain or loss on disposal of intangible shall be treated as income or deduction under income from ___________. (a)

Business income

(b)

Other sources

(c)

Capital gains

(d)

None of these

Q.23. When an asset is sold, exchanged, transferred or distributed or cancelled, redeemed, relinquished, destroyed, lost, expired or surrendered, it shall be treated as ___________________. (a)

Acquisition of asset

(b)

disposal of an asset

(c)

none of the above

Q.24. The application of a business asset to personal use shall be treated as _______________________. (a)

Acquisition of asset

(b)

Disposal of an asset

(c)

None of the above

Q.25. The cost of an asset purchased by a person shall be___________________. (a)

Total consideration given

(b)

Incidental expenditure in acquiring and disposing

(c)

Any expenditure to alter or improve the asset

(d)

all of these

(e)

None of the above

Q.26. Where an asset has been acquired with a foreign currency loan the cost of an asset shall be fluctuated due to __________________. (a)

Increase in exchange rate without payment of loan

(b)

Decrease in exchange rate without payment of loan

(c)

No effect unless loan is repaid

Q.27. Where the person disposing of the asset under non-arm’s length transaction, the consideration shall be treated as having received equal to _______________________. (a)

Actual consideration received


44


(b)

Fair Market Value

(c)

None of the above.

Chapter-05

Q.28. Depreciation shall be computed on Building (all types) against the written down value at the beginning of the year at the rate of _______________. (a)

10%

(b)

15%

(c)

30%

(d)

100%

(e)

20%

Q.29. Depreciation shall be computed on Furniture (Including fitting) and machinery and plant, Motor vehicles (all types), ships, technical or professional books against the written down value at the beginning of the year at the rate of _______________. (a)

10%

(b)

15%

(c)

30%

(d)

100%

(e)

20%

Q.30. Depreciation shall be computed on computer hardware including printer, monitor and allied items, machinery and equipments used in manufacture of IT products, aircrafts and aero engines, Aerial photographic apparatus against the written down value at the beginning of the year at the rate of _______________. (a)

10%

(b)

15%

(c)

30%

(d)

100%

(e)

20%

Q.31 Initial allowance on building is allowed at ____% of cost of building. (a)

50

(b)

40

(c)

15

(d)

25


45


Chapter-05

Q.32 Expenditures for acquiring land is included in _____. (a)

Cost of land

(b)

WDV of land

(c)

Depreciation of land

(d)

All of above

Q.33 Depreciation in respect of asset acquired on lease is _________. (a)

Admissible

(b)

Inadmissible

(c)

Equal to tax depreciation

(d)

None of above

Q.34 Full year depreciation is charged in the year of _____. (a)

disposal

(b)

Destruction

(c)

Acquisition

(d)

All of above

Q.35 Amount of depreciation allowed to ________ is restricted to the lease rental income derived during the year in respect of leased assets. (a)

Leasing companies

(b)

Individuals

(c)

AOP

(d)

All of above

Q.36 The cost of asset is allowed as expense where the asset with a useful life is ___ one year. (a)

Less than or equal to

(b)

More than

(c)

None of above

Q.37 The amount of any grant receivable in respect of acquisition of asset shall be included in the cost of such asset where such grant is _______. (a)

Exempt

(b)

Taxable

(c)

None of above


46


Chapter-05

Q.38 The cost of land and the cost of immovable property on such land are shown ________. (a)

Separately

(b)

Together

(c)

In profit and loss account

(d)

All of above

Q.39 The consideration received on disposal of an immovable properly shall be treated as its ___ if it exceeds the original cost of asset. (a)

Cost

(b)

WDV

(c)

Depreciation

(d)

All of above

Q.40 The ___ of an asset is treated as disposal consideration in case of export of a depreciable asset after use in Pakistan. (a)

Cost

(b)

WDV

(c)

Depreciation

(d)

All of above

Q.41 Value of motor vehicle not plying for hire is restricted to Rs. ____ for income tax purposes. (a)

1,500,000

(b)

2,000,000

(d)

2,500,000

(d)

3,000,000

Q.42 _____ of a discarded asset at the date when it is discarded is treated as its disposal consideration of the discarded asset. (a)

Cost

(b)

WDV

(c)

FMV

(d)

Accumulated depreciation


47


Chapter-05

Q.43 When an asset is acquired with a loan in foreign currency and exchange rate fluctuates before any repayment then the difference on account of foreign currency fluctuation should be ___ for depreciation purposes. (a)

Ignored

(b)

Taken into account

(c)

Exempt

(d)

None of above

Q.44 When an asset is wholly used in the tax year and sold at the end of year, then _____ shall be charged. (a)

Full year depreciation

(b)

No depreciation

(d)

50% depreciation

(e)

None of above

Q.45 Rate of depreciation for building is 10% of __________. (a)

Cost

(b)

Accumulated depreciation

(c)

WDV

(d)

Cost of land

Q.46 The rate of depreciation for a ramp build to provide access to persons with disabilities not exceeding Rs.250,000 each is _____%. (a)

50

(b)

70

(c)

80

(d)

100

Q.47 The normal useful life of an intangible asset is restricted up to ___ years from the date of purchase, where the life of the intangible is either more than 10 years or not determinable. (a)

20

(b)

10

(c)

5

(d)

2


48


Chapter-05

Q.48 While considering non arm’s length transaction it ____ is considered as consideration received. (a)

WDV

(b)

FMV

(c)

Cost

(d)

All of above

Q.49 Where the consideration received is against assets sold in bulk, it would be apportioned on the basis of _________of respective assets. (a)

WDV

(b)

FMV at the date of disposal

(c)

Cost

(d)

All of above

Q.50 _____ of an asset includes transfer of an asset between spouses under an agreement to live apart. (a)

Acquisition

(b)

Destruction

(c)

Disposal

(d)

None of above

Q.51 Tax depreciation is also known as _________ depreciation. (a)

Statutory

(b)

Accounting

(c)

Actual

(d)

All of above

Q.52 Where the expenditure is incurred in acquiring a depreciable asset or an intangible with a useful life of more than one year or is pre-commencement expenditure, the person must depreciate or amortise the expenditure in accordance with _______________________. (a) Section 22, (b) Section 23, (c) Section 24, (d) All of these


49


Chapter-05

Q.53 Deductions not allowed, Except as otherwise provided in this ordinance, no deduction shall be allowed in computing the income of a person under the head Income from Business for ___________. (a) Any cess, rate of tax paid or payable by the person in Pakistan or a foreign country that is levied on the profits or gains of the business or assessed as a percentage or otherwise n the basis of such profits or gains; (b) Any amount of tax deducted under various sections of the Ordinance from an amount derived by the person; (c) Any salary, rent, brokerage or commission, profit on debt, payment to nonresident payment for services or fee paid (d) All of these Q.54 Any expenditure paid or payable under a single account head which, in aggregate, exceeds _______________________ rupees made other than by a crossed bank cheque or crossed bank draft, except expenditures not exceeding ten thousand rupees or on account of freight charges, travel fare, postage, utilities or payment of taxes, duties, fee, fines or any other statutory obligation. (a) 15,000 (b) 20,000 (c) 45,000 (d) 50,000 Q.55 The depreciation deduction for a tax year shall be computed y applying the rate specified in __________________ against the written down value of the asset at the beginning of the asset at the beginning of the year, (a) Part ll of the Third Schedule (b) Part l of the 2nd Schedule (c) Part l of the Third Schedule (d) None Q.56 Where a depreciable asset is used in a tax year partly in deriving income from business chargeable to tax and partly for another use, the deduction allowed for that year shall be restricted to the fair proportional part of the amount that would be allowed if the asset __________________ used to income from business chargeable to tax. (a) Partly (b) Partially (c) Proportional (d) Wholly Q.57 The written down value of a depreciable asset of a person at the beginning of the tax year shall be where the asset was acquired in the tax year, the cost of the asset of the person as reduced by any initial allowance in respect of the asset under __________________.


50


(a) (b) (c) (d)

Chapter-05

Section 23 Section 22 Section 21 None

Q.58 The total deductions allowed to a person during the period of ownership of a depreciable asset under this section and section 23 shall not exceed the cost of ___________. (a) Pay (b) The asset. (c) Salary (d) None Q.59 The depreciation deductions allowed to a leasing company or an investment bank or a modraba or a scheduled bank or a development finance institution in respect of assets owned by the leasing company or an investment bank or a modaraba or a scheduled bank or a development finance institution and leased to another person shall be deductible only against the ___________ income derived in respect of such assets. (a) Lease rentals (b) Cost of asset (c) Sales (d) Purchase Q.60 Depreciable asset means any tangible _______________ other than unimproved land), or structural improvement to immovable property, owned by a person. (a) Movable property (b) Immovable property (c) Both a & b (d) None Q.61 Any plant or machinery in relation to which a deduction has been allowed under another section of this Ordinance for the ____________ cost of the asset in the tax year in which the asset is acquired. (a) Entire (b) Half (c) One-Fourth (d) None Q.62 Plant, machinery and equipment installed by any industrial and under developed areas, and owned and managed by a company shall be allowed first year allowance in lieu of initial allowance under _____________ at the


51


Chapter-05

rate specified in Part ll of the Third Schedule against the cost of the eligible depreciable assets put to use after July 1, 2008. (a) Section 223 (b) Section 123 (c) Section 23 (d) Section 231 Q.63 Where an intangible is used in a tax year partly in deriving income from business chargeable to tax and ___________ for another use, the deduction allowed under this section for that year shall be restricted to the fair proportional part of the amount that would be allowed if the intangible were wholly used to derive income from business chargeable to tax. (a) Fully (b) On lease (c) Partly (d) None Q.64 The total deductions allowed to a person under this section in the current tax year and all ________________ tax years in respect of an intangible shall not exceed the cost of the intangible. (a) Recent (b) Preceding (c) Next (d) None Q.65 Pre-commencement expenditure means any expenditure incurred _____________ the commencement of a business wholly and exclusively to derive income chargeable to tax, including the cost of feasibility studies, construction of prototypes, and trial production activities, but shall not include any expenditure or which is depreciated or amortised under section 22 or 24. (a) After (b) Before (c) At the time or (d) None Q.66 Scientific research institution means any institution certified by the Board as conducting scientific research ________________ Pakistan. (a) Out of (b) In (c) None Q.67 For tax purposes depreciation is calculated by (a) Straight line method


52


(b) (c) (d)

Chapter-05

WDV Both A and B None of the above

Q.68 Structural improvement of immovable property shall not include (a) Cost of labor (b) Cost of land (c) cost of building (d) None of the above

Q.69 Where the consideration received on the disposal of immovable property exceeds the cost of property -------------shall be treated as the cost of the property (a) WDV of immovable property (b) Consideration received (c) Fair market value of immovable property (d) Lower of A, B and C

Q.70 Initial allowance of depreciable asset in allowed (a) If the asset is already used in Pakistan (b) If the asset is not already used in Pakistan (c) If asset is below 5 Million rupees (d) All of above

Q.71 Which one is eligible depreciable asset (a) Road transport vehicle plying for hire (b) Furniture including fixture (c) Plant and machinery already used in Pakistan (d) All of above

Q.72 Amortization is allowed for (a) Tangible fixed asset (b) Intangible fixed asset (c) Land and building (d) Assets having life less than one year

Q.73 Where a person dispose of intangible ____________in that year shall not be allowed.

asset

amortization

then


53


(a) (b) (c) (d)

Chapter-05

50% of cost Total number of months used 40% of WDV Amortization not allowed

Q.74 Pre-Commencement expenditures are (a) Deductable allowance (b) Undeductible allowance (c) Deductable only 40% of the cost (d) None of the above

Q.75 Which one is not scientific research expenditure for scientific research institute (a) Acquisition of any depreciable asset (b) Acquisition of immovable property (c) Acquisition of immovable fixed asset (d) None of above

Q.76 A person shall be allowed a deduction of capital expenditure incurred in tax year in respect of (a) Paid to educational institute (b) Paid to institute in Pakistan established for the training of industrial worker recognized (c) Paid for training of person, being a citizen of Pakistan (d) All of the above

Q.77 A company shall be allowed a deduction ------------- of the amount transferred to participatory reserves. (a) Not exceeding 2 percent (b) Not exceeding 3 percent (c) Not exceeding 4 percent (d) Not exceeding 5 percent


54


Chapter-05

ANSWERS 1

(a)

2

(d)

3

(b)

4

(b)

5

(c)

6 11 16 21 26 31 36 41 46 51 56 61 66 71 76

(d) (a) (c) (c) (c) (c) (a) (d) (d) (a) (d) (a) (b) (a) (d)

7 12 17 22 27 32 37 42 47 52 57 62 67 72 77

(a) (b) (c) (a) (b) (a) (b) (c) (b) (d) (a) (c) (b) (b) (d)

8 13 18 23 28 33 38 43 48 53 58 63 68 73

(a) (e) (a) (b) (a) (b) (a) (a) (b) (d) (b) (c) (b) (d)

9 14 19 24 29 34 39 44 49 54 59 64 69 74

(a) (c) (a) (b) (b) (c) (a) (b) (b) (d) (a) (b) (b) (d)

10 15 20 25 30 35 40 45 50 55 60 65 70 75

(d) (b) (c) (d) (c) (a) (a) (c) (c) (c) (a) (b) (b) (d)


55

TAX ACCOUNTING – Section 32 to 36

Chapter-06

MULTIPLE CHOICE QUESTIONS Q.1. Companies account for their business transactions on (a)

Cash basis

(b)

Accrual basis

(c)

Both a and b

(d)

None of these

Q.2. Individual and AOP may account for their all heads of income transactions on (a)

Cash basis

(b)

Accrual basis

(c)

Optional from (a) or (b)

(d)

None of the above

Q.3. The value of closing stock is computed on (a)

Cost basis

(b)

NRV

(c)

Lower of cost and NRV

(d)

Higher of cost and NRV

Q.4. A person may change the method of accounting with the approval of (a)

No approval required

(b)

CIR or

(c)

Taxation Officer

Q.5. _______method may be used by the persons using cash basis of accounting. (a)

Marginal cost

(b)

Absorption cost

(c)

Optional from (a) or (b)

(d)

None of these

Q.6. Where particular items of stock in trade are not identifiable, _______cost method should be used.


56


(a)

Prime

(b)

Absorption

(c)

FIFO

(d)

LIFO

(e)

None of (a) to (d)

Chapter-06

Q.7. under the ITO, 2001 long-term contracts take ________tax year to get completed (a)

More than one

(b)

More than three

(c)

More than five

(d)

More than ten

Q.8. The income arising out of long term contracts is computed on the basis of __________. (a)

Cash

(b)

Accrual

(c)

Percentage of completion computed on revenue basis

(d)

None of these

Q.9. The record maintained by a taxpayer required to be kept for a period of ________years after the end of year to which they relate. (a)

One

(b)

Two

(c)

Three

(d)

Six

Q.10. The books of accounts of companies should be maintained in accordance with _____________. (a)

International Accounting Standard

(b)

Companies Ordinance, 1984

(c)

Both a and b

(d)

None of the above


57


Chapter-06

Q.11. An individual deriving income from business is required to maintain books at __________________. (a)

Residence

(b)

Place of business

(c)

Any other place

(d)

None of these

Q.12. A person deriving income from property is required to maintain _________ documents. (a)

Rent deed

(b)

Tenancy termination agreement

(c)

Receipt of rent

(d)

All of the above

Q.13. In Prime cost method the cost of stock in trade consists of______________. (a)

Direct material cost

(b)

Direct labour cost

(c)

Variable factory cost

(d)

All of these

Q.14. A person deriving income from royalty is required to maintain (a)

Royalty agreement

(b)

Rent deed

(c)

Cost of acquisition

(d)

All of these

Q.15. Where the person has commenced the business during the year, the opening value of stock shall be ---- at the time when the stock is ventured in business. (a)

Fair market value

(b)

Actual value

(c)

None of these

Q.16. Person who is required to use the ETR shall keep the copies of ETR for the period of -------. QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

58


(a)

2 years

(b)

5 years

(c)

6 years

Chapter-06

Q.17 Dividend income received by a company shall be taxed on_________. (a)

Accrual basis

(b)

Cash basis

(c)


(d)

None of above

Q.18 Method of accounting for companies for business income is ____________. (a)

Accrual basis

(b)

Cash basis

(c)


(d)

None of above

Q.19 A long term contract is a contract which is not completed in ______. (a)

one year

(b)

two years

(c)

three years

(d)

four years

Q.20 A long term contract may be for ____: (a)

Manufacture

(b)

Installation

(c)

Lease of assets

(d)

All of above

Q.21 Deduction means any amount _____ to trading account, manufacturing account, receipts and expenses account or profit and loss account (a)

Debited

(b)

Credited

(c)

Added

(d)

All of above


59


Chapter-06

Q.22 Income of person other than company shall be account for (a) Accrual basis (b) Cash basis (c) Both A and B (d) None of the above

Q.23 A person can’t change method of accounting without approval of (a) Assistant commissioner (b) Deputy commissioner (c) Inland revenue officer (d) Commissioner

Q.24 On cash base accounting (a) Income shall be chargeable at cash basis and expenditure at accrual basis (b) Income at accrual basis and expenditure at cash basis (c) Income at expenditure at accrual basis (d) Income and expenditure at cash basis Q.25 In accrual base accounting if a person provide supplies at instalments when he is entitled to offer his income____________. (a) At the time of sale (b) At the time of receipt of installments (c) Entitles to receives it (d) When debtor asked to offer it Q.26 Where a person has been allowed for deduction of expenses and the person has not paid liability or part of liability in -------- years , the unpaid amount of liability shall be included in persons income. (a) 3 (b) 4 (c) 5 (d) 6

Q.27 -----------Vary directly with changes in volume of stock in trade manufactured or produced (a) Admin cost (b) Variable factory overhead cost (c) Fixed factory overhead cost QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

60


(d)

Chapter-06

Both A and B

ANSWERS 1 6 11 16 21 26

(b) (e) (b) (c) (a) (a)

2 7 12 17 22 27

(c) (a) (d) (b) (c) (b)

3 8 13 18 23

(c) (d) (d) (a) (d)

4 9 14 19 24

(b) (d) (a) (a) (d)

5 10 15 20 25


(c) (c) (a) (d) (c)

61

CAPITAL GAINS – Section 37, 37A & 38

Chapter-07

MULTIPLE CHOICE QUESTIONS Q.1. Gain arising from the disposal of _________ is taxable under the head capital gains. (a) (b) (c) (d)

Depreciable asset Eligible depreciable asset Securities All of the above

Q.2. ____________are capital assets. (a) Stock in trade (b) Sculpture (c) Immovable property (d) Both b and c Q.3. A person who derives his income by dealing in shares of private, unlisted and public limited companies are covered under the head. (a) Income from business (b) Income from other sources (c) Capital gains or (d) All of the above Q.4. A loss on the disposal of _______ is not recognized under the Income tax Ordinance, 2001. (a) (b) (c) (d)

Securities not chargeable to tax Medallion Both (a) and (b) None of (a) to (c)

Q.5. Derivatives are a part of ______ . (a) (b) (c) (d)

Capital assets Depreciable assets Current assets All of the above

Q.6. Where a capital asset (other than securities and immoveable property) is disposed off after one year of its acquisition, then gain for tax purposes is ______ of actual gain.


62


(a) (b) (c) (d)

Chapter-07

¼ ½ ¾ None of (a) to (c)

Q.7. Income from Modaraba certificates is now taxable under section _________. (a) 37 (b) 37A (c) 38(5) (d) none of (a) to (c) Q.8. Income from shares of a public company set up in any special Industrial zone is exempt up to-------- years from the date of commencement of commercial production. (a) Three (b) Four (c) Five (d) None of the above Q.9. Gain from sale of shares of Private Limited companies is taxable under section_________. (a) (b) (c) (d)

37 37A Not taxable None of (a) to (c)

Q.10. Bonus shares received by an individual under income tax law are a part of _____________. (a) income (b) exempt income (c) admissible deduction (d) None of the above Q.11. A deduction of loss u/s 37A on disposal of security chargeable to tax may be adjusted against the capital gain of ____________. (a) (b)

Any other security not chargeable to tax Any other security chargeable to tax


63


(c) (d)

Chapter-07

Shares of (Pvt.) Ltd. company None of the above

Q.12. A company in which at least 50% of the shares are held by a foreign government is ___________. (a) Private company (b) Public company (c) Foreign company (d) All of the above Q.13. Any incidental expenditure on disposal of capital assets shall form part of _____________. (a) (b) (c) (d)

Cost of assets Disposal consideration Selling cost None of a to c

Q.14. Capital loss u/s 37 is allowed as deduction for those assets the gain of which is___________. (a) Chargeable to tax (b) Exempt from tax (c) Both of these (d) None of (a) to (c) Q.15. At the time of devolution ___________ would be the cost of the asset. (a) FMV (b) Historical cost (c) higher of a and b Q.16. Medallion received as gift and disposed off later, the capital loss on the same shall________. (a) (b)

be recognized not be recognized

Q.17. Expenditure that shall form part of the cost of the asset are __________. (a) Any expenditure to earn such income


64


(b) (c)

Chapter-07

All the expenditure excluding expenditure inadmissible u/s 21 of the ITO, 2001. None of the above

Q.18. Tax on capital gain received by a company shall be charged on to tax under_____________. (a) (b) (c)

NTR FTR SBI

Q.19. Capital gain tax shall not be chargeable on disposal of securities which are held for a period of __________. (a) one year (b) two years (c) three years (d) six months (e) forty eight months Q.20. ‘Derivatives’ is a general term for financial assets that are “derived” from other_______________. (a) (b) (c) (d)

fixed assets current assets financial assets income

Q.21. Any distribution received from NIT or a Mutual Fund of ICP out of the Capital Gains on which tax has already been paid are___________________. (a) Permanently exempt (b) Fully Taxable (c) Chargeable to tax Q.22. Which one of the following is not a ‘security’ _______________. (a) share of a public company (b) voucher of PTC (c) Modaraba Certificates (d) Lease hold right


65


Chapter-07

Q.23 Gain on disposal of immovable property that was acquired after July 01, 2016 is chargeable to at _____%, where holding period is up to one year. (a) (b) (c) (d)

10 2 6 12

Q.24 Where jewellery being as capital asset under section 37 is sold after one year, ________ of gain on such assets is exempt from tax. (a) 50% (b) 25% (c) 75% (d) 100% Q.25 A loss on the sale of jewellery is _______ under the head capital gain. (a) recognized (b) not recognized (c) taxable (d) none of above Q.26 Redeemable capital instruments are chargeable to tax under section _____. (a) 37 (b) 38 (c) 37A (d) 39 Q.27 In case capital assets are acquired through inheritance, the FMV on the date of ________ is treated as cost of assets. (a) (b) (c) (d)

disposal acquisition destruction all of above

Q.28 Profit on sale of personal car is taxable under the head _______. (a) (b) (c)

income from salary income from property income from business


66


(d)

Chapter-07

none of above

Q.29 Where a security has been disposed off within twelve (12) months from the date of its acquisition the rate of tax shall be higher as compared to the rate applicable after _________months. (a) (b) (c) (d)

12 5 1 none of above

Q.30 Holding period of security and other capital assets _______ on the taxability of capital gain on their disposal. (a) have no effect (b) have effect (c) none of above Q.31 Rates for taxability of capital gains under section 37A for AOP and individuals are____. (a) different (b) equal (c) none of above Q.32 Capital gain is _______ where transfer of assets between spouses under an agreement to live apart, under a gift, bequest or will, by succession, inheritance or devolution and distribution of assets on dissolution of an AOP or on liquidation of a company. (a) taxable (b) exempt (c) not recognized (d) none of above Q.33 The unadjusted capital loss under section 37 can only be carried forward upto the period of ___ years immediately after the year of occurrence for adjustment against income from capital gain only. (a) seven (b) three (c) six (d) ten


67


Chapter-07

Q.34 Loss on securities chargeable to tax can be carried forward to subsequent ___ tax years. (a) seven (b) three (c) six (d) none of the above Q.35 Where the shares of a private limited company being as capital asset is disposed off within one year, _____ of gain is taxable. (a) 100% (b) 75% (c) 25% (d) 0% Q.36 Provisions of section 37A are not applicable to _________. (a) an insurance company (b) a banking company (c) both ‘a’ and ‘b’ (d) none of above Q.37 An option to buy a __________ is a derivative. (a) treasury bond (b) shares (c) debentures (d) all of above Q.38 Capital loss under section 37 may not be adjusted against the capital gain under section ______. (a) 37 (b) 38 (c) 37A (d) all of above Q.39 _______ received as gift shall be chargeable to tax. (a) medallion (b) old coin (c) painting (d) none of above


68


Chapter-07

Q.40 If a person sold personal immovable property profit arising from sale shall be included in ___________. (a) Income from property (b) Income from other source (c) Income from capital gain (d) Either A or C Q.41 If a person has obtained immovable property from gift, for the purpose of capital gain the cost of property shall be (a) Fair market value of property (b) Capital gain shall not be not be applied on the said property (c) Zero (d) None of the above Q.42 Which one is not capital asset___________. (a) Stock in trade (b) Land (c) Building on which person is entitled depreciation (d) All of the above Q.43 Cost of bonus shares for the purpose of capital gain is__________. (a) Zero (b) Fair market value (c) Value of bonus on which tax has been deducted (d) Both A and B Q.44 Which one is not included in definition of debt securities for the purpose of capital gain (a) Corporate debt securities (b) Term finance certificate (c) Sukuk certificates (d) Mutual funds Q.45 Capital gain on disposal of securities shall be chargeable to tax except (a) Banking and insurance company (b) Manufacturer and services provider (c) Individual and association of person (d) Textile and pharmaceuticals companies Q.46 Capital loss arising from sales of securities can be carry forward for (a) Not carry forward (b) 6 years


69


(c) (d)

Chapter-07

5 years 1 year

Q.47 Where holding period of securities is less than twelve months the rate of tax is _________for the tax year 2017. (a) 7.5% (b) 10% (c) 12% (d) 15% Q.48 Loss arising from disposal of _____________ the capital asset is not deductible while computing income the person. (a) Jewellery (b) Painting (c) An antique (d) All of the above


70


Chapter-07

ANSWERS 1

(c)

2

(d)

3

(c)

4

(c)

5

(a)

6

(c)

7

(b)

8

(d)

9

(a)

10

(a)

11

(b)

12

(b)

13

(a)

14

(a)

15

(a)

16

(b)

17

(b)

18

(a)

19

(e)

20

(c)

21

(a)

22

(d)

23

(a)

24

(b)

25

(b)

26

(c)

27

(b)

28

(d)

29

(a)

30

(b)

31

(b)

32

(c)

33

(c)

34

(d)

35

(a)

36

(c)

37

(a)

38

(c)

39

(d)

40

(c)

41

(a)

42

(d)

43

(c)

44

(d)

45

(a)

46

(a)

47

(d)

48

(d)


71

INCOME FROM OTHER SOURCES – Section 39 & 40

Chapter-08

MULTIPLE CHOICE QUESTIONS Q.1. Income from dividend received by a salaried person is taxed under _______. (a)

SBI under FTR

(b)

FTR

(c)

NTR

(d)

both a and b

Q.2. Prize on winning a quiz is taxable under the _______. (a)

FTR

(b)

NTR

(c)

SBI under FTR

(d)

all of above

Q.3. Examination fee and paper checking fee received by Government employees is taxable under _____. (a)

Income from salary

(b)


(c)

None of a and b

Q.4. __________ of the amount received by the tenant for vacating the possession of any building, less amount paid for taking the possession is chargeable to tax in the year of receipt under the head income from property. (a)

1/10th

(b)

1/5th

(c)

1/3rd

(d)

None of above

Q.5. Amount received by tenant to vacate the possession of property is chargeable to tax in _________years in unequal proportions. (a)

5

(b)

10

(c)

20

(d)

none of the above

Q.6. An amount equal to ______is allowed as deduction for expenditure incurred exclusively for deriving income under income from other sources.


72


(a)

Calculated on proportionate basis

(b)

calculated at an average rate

(c)

whole amount of expenditure

(d)

None of the above

Chapter-08

Q.7. Dividend income and profit on PLS account received by an individual or AOP although covered under the head income from other sources but the same is chargeable to tax under ______. (a)

SBI under FTR

(b)

NTR

(c)

FTR

(d)

SBI under NTR

Q.8. ______ is treated as full and final discharge of tax liability of the recipient receiving amount under FTR. (a)

Tax paid with the return

(b)

tax deductible

(c)

tax required to be collected

(d)

both b and c

Q.9. Profit on special US Dollar Bonds on such deposited as were before 16-121999 is ________. (a)

Fully exempt

(b)

Exempt on proportionate basis

(c)

Not exempt

(d)

none of a to c

Q.10. Sales of irrigation water by an agriculturalist is _________. (a)

Exempted income

(b)

taxable under income from property

(c)

included in total income for rate purposes

(d)

taxable under income from other sources

Q.11. Any expenditure incurred for earning of income from other sources ______. (a)

Admissible


73


(b)

inadmissible

(c)

admissible if according to the provisions of ITO, 2001.

Chapter-08

Q.12. In case of profit on debt received in arrears and person wants to apply the tax rate that would have been applicable if it is received in the relevant tax year then it should be received from the______ to exercise such option. (a)

National Saving Centre Scheme

(b)

Defence saving certificates

(c)

Both (a) and) (b)

Q.13 All the expenditure to earn any __________is allowed as deductions except

capital expenditure. (a)

income from salary

(b)

income from property

(c)

dividend income

(d)


Q.14 Ground rent received is chargeable to tax under “income from _____”.

(a)

property

(b)

business

(c)

salary

(d)

other sources

Q.15 Gratuity received by the legal representatives after the death of employee

will be included under head ________ of deceased person. (a)

income from salary

(b)


(c)


(d)


Q.16 Any income that is not covered under any other head of income is covered

under the head “____________”. (a)

Income from salary

(b)


(c)


Q.17 Income from other sources earned by an AOP is ___________.


74


(a)

taxable

(b)

exempt

(c)

allowed as deduction against other incomes

(d)

all of above

Chapter-08

Q.18 Profit on debt may be treated as _____________.

(a)

Income from salary

(b)

business income

(c)


(d)

both ‘b’ or ‘c’

Q.19 Income from school is chargeable to tax under head _______________.

(a)

Income from salary

(b)


(c)


(d)

both ‘b’ or ‘c’

Q.20 Profit on debt received in ______ can be adjusted in the respective tax year

by exercising option in writing. (a)

arrears

(b)

advance

(c)

none of above

Q.21 Unexplained income is chargeable to tax under ______.

(a)

income from salary

(b)

business income

(c)


(d)


Q.22 Additional payment on delayed refund is __________.

(a)

exempt

(b)

taxable as business income

(c)

taxable under “income from other sources”

(d)

taxable under “income from salary”


75


Chapter-08

Q.23 Bonus issue received by a shareholder is taxable as income from other

sources under ________. (a)

Normal tax regime

(b)

Final tax regime

(c)

Exempt from tax

Q.24 Income of non professional author is chargeable to tax under the head

_____. (a)

income from salary

(b)

business income

(c)


(d)


Q.25 The provisions of inadmissible expenses u/s 21 are ___ on the deductions

claimed against income from other sources. (a)

applicable

(b)

not applicable

(c)

none of ‘a’ or ‘b’

Q.26 Where net amount received by the recipient for income covered under FTR

the ____ amount received will be offered for tax under the ITO, 2001. (a)

gross

(b)

net

(c)

none of above

Q.27 Income arising from lease of building together with plant and machinery is

included in the ………. Head (a) Income from property (b) Income from business (c) Income from capital gain (d) Income from other source of income

Q.28 If a person receipt advance payment of sale of goods or supply of services it

shall….. included in income from other sources of income head. (a) Not be (b) be (c) depends on intention of taxpayer


76


(d)

Chapter-08

None of the above

Q.29 Section 41 of income tax ordinance deals with

(a) (b) (c) (d)

Income from capital gain Income from other source of income Agricultural income None of the above


77


Chapter-08

ANSWERS 1 6 11 16 21 26

(a) (c) (c) (c) (c) (a)

2 7 12 17 22 27

(c) (a) (c) (a) (c) (d)

3 8 13 18 23 28

(b) (d) (d) (d) (b) (a)

4 9 14 19 24 29

(d) (c) (d) (b) (c) (c)

5 10 15 20 25


(d) (d) (b) (a) (a)

78

Tax Exemption – Section [41 to 55]

Chapter-09

MULTIPLE CHOICE QUESTIONS 1. Mr. A is employee in UAE. There is tax treaty between Pakistan and UAE . Mr. A paid 30,000 tax in UAE whereas 40,000 is tax payable if calculated according Pakistani Income Tax Ordinance, 2001. How much amount is payable in Pakistan (a) 40,000 (b) 10,000 (c) 30,000 (d) 0

2. Mr. A is employee in UAE. There is no tax treaty between Pakistan and UAE . Mr. A paid 30,000 tax in UAE whereas 40,000 is tax payable if calculated according Pakistani Income Tax Ordinance, 2001. How much amount is payable in Pakistan (a) 40,000 (b) 10,000 (c) 30,000 (d) 0

3. Monetary award provided to resident person by president of Pakistan is (a) (b) (c) (d)

Total taxable Taxable upto 10% Taxable upto 90% Exempt

4. Profit on debt provided to non-resident person on security issued by resident person shall be exempt from tax in Pakistan except (a) Person is an associate of person (b) Security was widely issued by resident person outside Pakistan (c) Profit was paid outside Pakistan (d) Security was approved by board

5. Scholarships granted to a person to meet the cost of the person’s education shall be-----(a) (b) (c) (d)

Fully taxable Taxable if amount is more than 200,000 Taxable only 10% of the receipt Exempt

6. Income received by a spouse as support payment under agreement without live apart shall be (a) (b) (c)

Taxable Exempt Taxable upto 10%


79


(d)

Chapter-09

Only taxable if they live apart

7. Income of provincial government shall be……….. . (a) (b) (c) (d)

Exempt under Income Tax Ordinance Taxable if business carried out inside its jurisdictional area Exempt in provincial tax All of above

8. Recently Pakistan Telecommunication Authority sold 3 and 4 G spectrum, Income derived from the same by PTA shall be -----------under income Tax Ordinance. (a) Exempt (b) Fully Taxable (c) Taxable by the rate of non salaried individual (d) Taxable under FTR.

9. Foreign source income of short term resident shall be exempt if (a) (b) (c) (d)

If he derive income from business established in Pakistan and he is resident of Pakistan not more than 3 years If foreign source income brought into or received in Pakistan by the person and he is resident of Pakistan not more than 3 years Who is present in Pakistan solely by reason of employment and he is resident of Pakistan not more than 3 years None of the above

10. Foreign source income of returning expatriates is exempt for (a) (b) (c) (d)

One tax year Two tax year Three tax year Five tax year

11. A person will be returning expatriate if he is not resident of Pakistan at least ---- years. (a) (b) (c) (d)

4 5 6 7

12. Where a citizen of Pakistan leaves Pakistan during a tax year and remain abroad during that tax year any salary earned by him outside Pakistan shall be ----------(a) Exempt (b) Shall be taxable under FTR (c) Shall be taxable and tax will be calculated by Salaried rates provide in ordinance


80


(d)

Chapter-09

Shall be taxable under minimum tax

13. Second schedule of Income Tax Ordinance, 2001 deals with… (a) (b) (c) (d)

Exempt income Reduced rate Final tax regime Both A and B

14. Agricultural income is ________ a) b) c) d)

under section 41 of the Income Tax Ordinance, 2001.

Exempt Taxable Taxable at reduced rate None of the above


81


Chapter-09

ANSWERS 1

(d)

2

(b)

3

(d)

4

(a)

5

(d)

6

(b)

7

(a)

8

(a)

9

(c)

10

(b)

11

(a)

12

(a)

13

(d)

14

(a)


82

LOSSES – Section 56 to 59B

Chapter-10

MULTIPLE CHOICE QUESTIONS Q.1 Loss from the speculation business may be set off against___________. (a)

Income from any other head of income

(b)

Income from speculation business only

(c)


(d)

None of the above

Q.2 Capital losses can_____________. (a)

Be set off against income from any head of income

(b)

not be set off against any other head of income

(c)

Be set off against capital gains during the same tax year

(d)

None of the above

Q.3 The business loss during the specific exemption period may be set off against the business income___________. (a)

after the exemption period

(b)

Before the exemption period

(c)

Not to be set off and carried forward

(d)

both ‘a’ and ‘b’

Q.4 Loss incurred from speculation and non-speculation business can be carried forward in the immediately succeeding ___________tax years. (a)

6 years

(b)

5 years

(c)

4 years

(d)

7 years

Q.5 There can be no loss under the head _________: (a)

Income from Salary

(b)


(c)


(d)

None of the above


83


Chapter-10

Q.6 While setting off the loss under the head income from other sources, business losses and unabsorbed depreciation loss the adjustment shall be in the order of _____________. (a)

Loss from other sources, depreciation and business loss

(b)

Depreciation, business loss and other income

(c)

All shall be adjusted at the same time

(d)

None of the above.

Q.7 An industrial undertaking set up in any export processing zone can carry forward its assessed business losses up to______________. (a)

6 years

(b)

5 years

(c)

10 years

(d)

unlimited time

Q.8 The assessed brought forward losses and capital loss of the amalgamating company can be adjusted with the profits and gains of the amalgamated company for up to: (a)

6 years succeeding from the year of amalgamation

(b)

10 years from the succeeding year of amalgamation

(c)

5 years succeeding the year of amalgamation

(d)

None of the above

Q.9 The business loss and unabsorbed depreciation can be set off or carry forward if the amalgamated company (other than banking and non banking companies) continues to carry the business of the amalgamating company at least for the period of_____________. (a)

6 years

(b)

5 years

(c)

4 years

(d)

None of above

Q.10 Any unabsorbed depreciation allowance under the Income Tax Ordinance, 2001 shall be carried forward up to the period of_________. (a)

6 years


84


(b)

7 years

(c)

10 years

(d)

Indefinite period

Chapter-10

Q.11 Foreign loss sustained by a resident person shall___________. (a)

Be set off against any head of income

(b)

Be set off against business income only which is earned in Pakistan

(c)

Be set off against his foreign source income and to be carried forward under the same head of income

(d)

Not be set off

Q.12 Foreign losses can be carried forward up to the period of________. (a)

10 years

(b)

6 years

(c)

Cannot be carried forward

(d)

None of the above

Q.13 Loss sustained by a permanently exempt business during the exemption period can_________. (a)

Not be set off or carried forward

(b)

Be carried forward up to the period of 6 years after the end of exemption period

(c)

Be carried forward up to the period of 6 years including the exemption period

(d)

None of the above

Q.14 A subsidiary company’s loss can_____________. (a)

Be set off and carry forward up to the period of 6 years

(b)

Not be carry forward

(c)

Be set off and carry forward for an indefinite period

(d)

None of the above

Q.15 The holding company can claim the loss surrendered by a subsidiary to the extent of holding ratio if_____________.


85


(a)

It holds at least 75% of share capital of a subsidiary when one company in the group is public company listed on registered stock exchange

(b)

It holds at least 55% of share capital of a subsidiary company when none of the companies in the group is a listed company

(c)


(d)

None of the above

Chapter-10

Q.16 The holding company or its subsidiary can set off the surrendered loss of a subsidiary if___________. (a)

There is a continued ownership for 5 years of share capital

(b)

There is a continued ownership for 6 years of share capital

(c)

There is a continued ownership of 3 years of the share capital

(d)

None of the above

Q.17 Surrendered loss from a subsidiary shall be claimed by the holding company or its subsidiary if_____________. (a)

There is no change in the business of a subsidiary company

(b)

It continues the same business during the period of 3 years from the year in which the loss is claimed

(c)


(d)

None of the above

Q.18 Where the loss is reverted back to the subsidiary company after the expiry of the prescribed time for set off by the holding company the subsidiary may____________. (a)

Set off and carry forward the loss up to 3 years from the date it is reverted back

(b)

Set off and carry forward the loss up to 6 years from the date it is reverted back

(c)


(d)

None of the above

Q.19 There can be no loss to an indivicual under the following heads of incomes______________. (a)

salary

(b)

property


86


(c)

business income under NTR

(d)

Both (a) and (b)

Chapter-10

Q.20 Loss on disposal of personal assets other than u/s 38(5) of a taxpayer ____ be set off and carried forward against any head of income. (a)

can

(b)

cannot

(c)

none of above

Q.21 Unabsorbed assessed business losses of preceding years shall be set off _____ the adjustment of brought forward unabsorbed assessed depreciation allowance. (a)

after

(b)

before

(c)

at the same time of

(d)

all of above

Q.22 Group relief is not available to company engaged in the business of _______. (a)

trading

(b)

manufacturing

(c)

providing of services

(d)

none of above

Q.23 In case of adjustment of assessed business losses the loss of the earliest year shall be set off _________. (a)

first

(b)

last

(c)

none of above

Q.24 The losses of speculation business can only be carried forward against income from the _____ head. (a)

any

(b)

same

(c)

other


87


(d)

Chapter-10

all of above

Q.25 Capital losses cannot be carried forward against income of ____ head. (a)

any

(b)

same

(c)

other

(d)

all of above

Q.26 The loss of the amalgamating company other than _____________ can be adjusted against the income of the amalgamated company. (a)

brought forward losses

(b)

capital losses

(c)

business losses

(d)


Q.27 Where the current year loss of the amalgamating company cannot be set off against the income of the amalgamated company then the same will be carried forward for ___ years. (a)

5

(b)

6

(c)

7

(d)

8

Q.28 The members of an AOP are ________ to set off and carry forward their share of loss received by them from the AOP. (a)

not allowed

(b)

allowed

(c)

both ‘a’ or ‘c’

(d)

none of above

Q.29 There is no time limit for carry forward of ________________. (a)

business loss

(b)

unabsorbed depreciation

(c)

unabsorbed amortization


88


(d)

Chapter-10

both ‘b’ and ‘c’.

Q.30 The share of losses representing the retired or deceased partner ____ be set off by the AOP. (a)

can

(b)

cannot

(c)

none of above

Q.31 Losses of inherited business can be set off and carried forward by any taxpayer excluding ______. (a)

minor

(b)

deceased person

(c)

salaried person

(d)

all of above

Q.32 Loss of income from business can be carry forward for (a) Six years (b) Thirteen years (c) Fifteen years (d) Can’t be carry forward

Q.33 Loss of Speculation business can be adjusted against (a) Income of speculation business (b) Income of non speculation business (c) Income under five heads of income (d) Can’t be adjusted

Q.34 Loss of income from ……. Shall be set off last (a) Property (b) Business (c) Capital gain (d) Other source

Q.35 Mr. Ali earns salary income of Rs. 1,000,000 per annum. Income tax provide exemption of Rs. 100,000 on salary. Taxable income of Mr. Ali under Income Tax Ordinance, 2001 will be Rs………


89


(a) (b) (c) (d)

Chapter-10

900,000 1,000,000 1,100,000 None of the above

Q.36 Where a person has a loss carried forward under section 57 of the Income Tax Ordinance, 2001 for more than one tax year, the loss of the ……….. tax year shall be set off first. (a) Last (b) Earliest (c) Depends on the well of tax payer (d) Both A and B

Q.37 Where a person sustain a loss in a tax year without including initial allowance. Initial allowance can be carry forward ……….. (a) For Six years (b) For Five years (c) For Two years (d) Until completely set off

Q.38 ABC Company sustains a loss of Rs. 50,000 in tax year 2011. ABC can carry forward the loss sustain in tax year 2011 up to tax year -------------. (a) 2014 (b) 2015 (c) 2016 (d) 2017

Q.39 Amalgamating companies shall be allowed set off business losses subject to condition that the amalgamated company continues the business of the amalgamation for a minimum period of (a) 5 years (b) 10 years (c) 12 years (d) 15 years

Q.40 The assessed loss excluding ------ of amalgamating company other than brought forward shall be set off against the profits and gains of the amalgamated companies. (a) Loss arises due to depreciation


90


(b) (c) (d)

Chapter-10

First year allowance Capital loss Both A and B

Q.41 Capital loss of company ….. (a) Can be carry forward for six years (b) Can be carry forward for 5 years (c) Can be carry forward for 1 year (d) Can’t be carry forward

Q.42 Capital loss can be set off against……. (a) Capital gain (b) Income from business (c) Income from other source of income (d) All of above

Q.43 Capital loss of AOP ……… against income of the partners. (a) Can be set off (b) Can’t be set off (c) Depends on desire of partners (d) None of the above

Q.44 Holding company and ………… owned group may opt to be taxed as one fiscal unit. (a) Associate company (b) Subsidiary company (c) Both A and B (d) None of the above

Q.45 Holding company and subsidiary company of 100% owned group may opt to be taxed as one fiscal unit if (a) Give irrevocable option for taxation (b) Companies locally incorporated under the Companies Ordinance, 1984 (c) Companies comply with corporate governance requirements as may specified by SECP (d) All of the above


91


Chapter-10

Q.46 For the purpose of the group relief, if one company in the group is public company listed on a registered stock exchange in Pakistan, the holding company shall directly hold minimum -------- shares of the subsidiary company. (a) 25% (b) 50% (c) 70% (d) 80%

Q.47 For the purpose of the group relief, if no company in the group is public company listed on a registered stock exchange in Pakistan, the holding company shall directly hold minimum -------- shares of the subsidiary company. (a) 25% (b) 50% (c) 75% (d) 100%

Q.48 Loss of subsidiary company may be claimed by the holding company in the tax year and following ……. Tax years (a) 2 (b) 3 (c) 4 (d) 5

Q.49 Loss of subsidiary company may be claimed by the holding company in the tax year and following two Tax years if (a) There in continued ownership of the business for four years (b) If company is engaged in trading (c) Loss surrender and loss claimed under this section shall be approval of the board (d) Companies are not locally incorporated by the company ordinance

Q.50 Loss claiming company shall with the approval of the board of the directors transfer cash to the loss surrendering company equal to the amount of ----on the profit to be set off against the acquired loss at the applicable tax rate. (a) Tax payable (b) Loss surrendered (c) Ratio of share capital (d) None of the above


92


Chapter-10

Q.51 Where a person sustain any loss in the heads of income he can carry forward it except (a) Income from salary and income from property (b) Income from salary and income from business (c) Income from salary and income from capital gain (d) Income from salary and income from other source of income


93


Chapter-10

ANSWERS 1 6 11 16 21 26 31 36 41 46 51

(b) (d) (c) (a) (b) (d) (a) (b) (a) (b) (a)

2 7 12 17 22 27 32 37 42 47

(c) (d) (b) (c) (a) (b) (a) (d) (d) (c)

3 8 13 18 23 28 33 38 43 48

(a) (d) (a) (a) (a) (a) (a) (d) (b) (a)

4 9 14 19 24 29 34 39 44 49

(a) (b) (a) (d) (b) (d) (b) (a) (b) (c)

5 10 15 20 25 30 35 40 45 50

(a) (d) (c) (b) (c) (b) (a) (c) (d) (a)


94

DEDUCTIBLE ALLOWANCE Section [60, 60A, 60B, 64A & 64AB

Chapter-11

MULTIPLE CHOICE QUESTIONS 1. If Zakat paid under the Zakat & Ushr Ordinance, 1980 is not fully deducted under section 9 of Income Tax Ordinance, 2001 in a tax year, the same_________. a. Can’t be carry forward b. Can be carry forward for three years c. Can be carry forward for five years d. Can be carry forward for six years 2. Zakat paid to bagger may be ____________as deductible allowance. (a) allowed (b) not allowed (c) none of the above 3. Workers’ welfare fund is a______. (a) (b) (c) (d)

Tax expense Personal expense Deductible allowance Tax credit

4. Which one is a deductible allowance? (a) Zakat (b) Workers’ welfare fund (c) Workers’ participation fund (d) All of the above 5. ___________shall be allowed as deductible allowance for profit on debt u/s 64A. (a) Individual (b) AOP (c) Company (d) All of the above 6. Deductible allowance for profit on debt shall not exceed (a) Lower of 50% of taxable income or Rs 1,000,000 (b) Lower of 50% of taxable income or Rs 1,500,000 (c) Lower of 50% of taxable income or Rs. 2,000,000 (d) None of the above 7. For the purpose of deductible allowance u/s 64AB for educational expenses, the taxable income of the individual shall not be more than (a) Rs. 700,000 (b) Rs. 800,000 (c) Rs. 900,000


95


Chapter-11

(d) Rs. 1,000,000 8. Deductible allowance for educational expenses is not allowed for the computation of tax deduction under section__________ of the Income Tax Ordinance, 2001. (a) 149 (b) 153 (c) 39 (d) 40


96


Chapter-11

ANSWERS 1 6

(a) (c)

2 7

(b) (d)

3 8

(c) (a)

4

(d)

5


(a)

97

TAX CREDITS – Section 61 & 65E

Chapter-12

MULTIPLE CHOICE QUESTIONS Q.1. Foreign source income of a resident tax payer shall be chargeable to tax except. (a)

Salary income

(b)

Property income

(c)

Business income

(d)

Capital gain

Q.2. Foreign tax credit is allowed for an amount equal to (a)

Foreign income tax paid.

(b)

Pakistan income tax payable.

(c)

Lesser of ‘a’ and ‘b’

(d)

Higher of ‘a’ and ‘b’.

.

Q.3. Foreign tax credit is allowed maximum up to _______ of income tax liability. (a)

25%

(b)

50%

(c)

100%

(d)

None of these

Q.4. Excess amount of foreign tax credit is only________________. (a)

Refunded.

(b)

Carried Back.

(c)

Carried forward.

(d)

None of these.

Q.5. In order to avail the foreign tax credit the foreign income tax must be paid within _____ years after the year in which income is earned. (a)

One year.

(b)

Two years.

(c)

Three years.

(d)

Five years.


98


Chapter-12

Q.6. Tax credit is allowed on__________ . (a)

Net foreign source income.

(b)

Gross foreign source income.

(c)

None of these.

Q.7. A person sustaining foreign source loss is allowed to ____ of such loss. (a)

set off against Pakistan source income

(b)

set off against foreign source of income

(c)

Both of these

Q.8. ________________tax credit is allowed before any other tax credit. (a)

Foreign tax credit.

(b)

Tax credit for donations.

(c)

Tax credit for tax already deposited.

Q.9. an individual making donation to a specified institution under clause 61 is allowed a deduction on account of credit up to ______ of taxable income. (a)

15%

(b)

30%

(c)

25%

(d)

0%

Q.10. where any property is donated, then _______ of property is taken as value of donation. (a)

Cost

(b)

Fair market value

(c)

Any of these

(d)

Higher of value recorded for capital value tax or Fair market value

Q.11. Donation to the Liaqat National Hospital Association may be made up to______________. (a)

50% of taxable income

(b)


(c)

Total taxable income


99


(d)

Chapter-12

none of (a) to (c)

Q.12. A Tax Credit equal to _________ for donation made to unapproved institutions. (a)

Full amount of donations is allowed

(b)

Half amount of donations is allowed

(c)

Calculated at average rate of tax is allowed

(d)

Not allowed

Q.13. A tax credit________ is allowed to a person making investment in the shares of a listed company (not being as first allottee). (a)

Whole amount of donation

(b)

At the average rate of tax

(c)

Proportionate basis

(d)

Not allowed

Q.14. A tax credit for investment in shares is made allowed for an investment which is,_____________. (a)

Total cost of shares

(b)


(c)

Rs.1,000,000

(d)

Lesser of ‘a’, ‘b’ and ‘c’.

Q.15. Where a taxpayer disposes of the shares within ______ of the purchase, the tax liability of the person shall increase by an amount equal to tax credit allowed to him in the year of disposal. (a)

24 months

(b)

6 months

(c)

12 months

(d)

None of these

Q.16. A tax credit at the average rate of tax shall be allowed to a person for contribution to approved pension fund if he derives income from _________. (a)

Salary

(b)

Business


100


(c)


(d)

None of these

Chapter-12

Q.17. The total allowed contribution made to approved pension fund on the basis of age above 40 years on July 01, 2006 should not be more than _______ taxable income of the year. (a)

10%

(b)

20%

(c)

30%

(d)

50%

Q.18. Tax credit for enlistment of a company in any stock exchange in Pakistan shall be _____________of the tax payable for the tax year in which the said Company is enlisted. (a)

10%

(b)

15%

(c)

20%

(d)

25%

Q.19. Where tax liability is less than the tax credit of a person, who is also a member of an AOP and AOP having tax payable then the excess amount would be_____________. (a)

Carried back

(b)

Carried forward

(c)

Claimed by the AOP as tax credit

(d)

Claimed by the person as tax credit

Q.20 Tax credit for employment generation by manufacturers is for …… years. (a) (b) (c) (d)

5 10 15 20

Q.21 Tax credit u/s 64B is admissible where (a)

Incorporation or manufacturing units are set up between July 2015 to June 2018


101


(b) (c) (d)

Chapter-12

More than 50 employees are registered under the employees old age institution and the PESSI Manufacturing units are registered under Company Ordinance, 1984 All of the above

Q.22 Tax credit to a manufacturer registered under Sales Tax Act, 1990, shall be entitled to tax of ------- percent of tax payable for the year. (a) 3 (b) 4 (c) 5 (d) 6

Q.23 Tax credit under section 65A is not applicable to (a) (b) (c) (d)

The person whose income is under FTR The person whose income is under NTR The person whose income is under Minimum Tax Both (a) & (c)

Q.24 Tax credit to a person under section 65A (a) (b) (c) (d)

Can be carry forward for five years Can be carry forward for four years Can be carry forward for three years Can’t be carry forward

Q.25 Tax credit for investment in plant and machinery under section 65B(1) is equal to ------ percent of the amount so invested (a) 10 (b) 15 (c) 20 (d) 25

Q.26 Tax credit for plant and machinery under section 65(1) shall apply if the plant and machinery is purchased and installed at the time between July 01, 2010 to June 30, (a) 2016 (b) 2017 (c) 2018


102


(d)

Chapter-12

2019

Q.27 Tax credit to newly established undertakings on or after July 01, 2011 is equal to -----(a) 50% of tax payable (b) Final taxes payable (c) Minimum taxes payable (d) Both (b) and (c)

Q.28 Tax credit to newly established undertakings under section 65D is admissible if (a) Company is set up before July 2011 (b) The industrial undertaking is established by splitting up of an undertaking already existed (c) The industrial undertaking is established with at least 50% equity shares raised through issuance of new shares for cash consideration (d) The industrial undertaking is established with at least 70% equity shares raised through issuance of new shares for cash consideration Q. 29 A person shall be entitled to_________ in respect of any sum paid or any property given by the person in the tax year as donation to specified person under section 61 of the Income Tax Ordinance, 2001. (a) Tax allowance (b) Tax credit (c) Both (d) None of the above

Q.30 Which one is not considered as charitable donations under section 61? (a) Board of education established under federal or provincial law (b) Hospital established by federal government or provincial government (c) Any non- profit organization (d) None of the above

Q.31 Tax credit on charitable donations paid by the company shall not exceed ----- percent of the taxable income (a) 10% (b) 20% (c) 30% (d) 40%


103


Chapter-12

Q.32 A company paid cash of Rs. 10,000 as a charitable donations to non profit organization. The company shall be allowed -----(a) Tax credit (b) Tax allowance (c) Both A and B (d) None

Q.33 Mr. X paid insurance of his children as educational plan, u/s 62 a person is allowed tax credit for investment in shares and insurance. Is Mr. X allowed for tax credit? (a) YES (b) NO (c) For tax credit , Mr. X is required approval of commissioner (d) Nothing

Q.34 Mr. Ali paid 100,000 for life insurance; His total taxable income is Rs. 600,000, whereas tax calculated on the said income is Rs. 7,000. How much tax credit is available to Mr. Ali? (a) 800 (b) 934 (c) 1,167 (d) 0

Q.35 A person acquired shares of public company from his friend. He is allowed……… for the said investment in shares. (a) Tax credit (b) Tax allowance (c) Both A and B (d) Nothing

Q. 36 If a person invested in shares and allowed tax credit on the same. Tax credit will be increased by the amount of tax payable if disposed off shares within __________from the date of its acquisition. (a) One year (b) 24 months (c) Three years (d) Four years


104


Chapter-12

Q.37 Tax credit for investment in health insurance is available if person earns income under the heads ___________. (a) Income from salary and income from property (b) Income from salary or income from business (c) Income from salary and income from capital gain (d) Income from salary and income from other sources

Q.38 The amount entitled to tax credit for investment in health insurance should be _______________. (a) The total contribution or premium paid by the person. (b) 5% of the person’s taxable income for the year (c) Rs. 100,000 (d) Lower of all of above

Q.39

Tax credit for investment in health insurance, _______________. (a) A resident person being a filer other than a Company (b) A resident company (c) A resident person being a non filer (d) None of the above

is

available

to

Q.40 A eligible person shall be allowed ------- on contribution to an approved pension fund. (a) Tax credit (b) Tax allowance (c) Both (d) None of the above

Q.41 A person paid contribution in pension fund of Rs. 5,000 whereas his total income under salary is Rs. 1,000,000. Is he allowed for tax credit? (a) Yes (b) No (c) If pension fund is approved then tax credit will be available (d) If pension fund is un approved then tax credit will be available

Q.42 In formula for calculating tax credit on contribution to approved pension fund C should not be more than


105


(a) (b) (c) (d)

Chapter-12

5% of taxable income 10% of taxable income 15% of taxable income 20% of taxable income

Q.43 The transfer by the member of ------------- of their existing balance to their individual pension account maintained with one or more pension fund manager shall not qualify for tax credit u/s 63 of the Income Tax Ordinance, 2001. (a) Approved pension fund (b) Annuity scheme (c) Approved occupational saving accounts (d) All of the above


106


Chapter-12

ANSWERS 1

(a)

2

(c)

3

(c)

4

(d)

5

(b)

6

(a)

7

(b)

8

(a)

9

(b)

10

(b)

11

(d)

12

(d)

13

(d)

14

(d)

15

(a)

16

(c)

17

(d)

18

(c)

19

(c)

20

(b)

21

(d)

22

(a)

23

(d)

24

(d)

25

(a)

26

(d)

27

(d)

28

(d)

29

(b)

30

(d)

31

(b)

32

(d)

33

(b)

34

(c)

35

(d)

36

(b)

37

(b)

38

(d)

39

(a)

40

(a)

41

(c)

42

(d)

43

(d)


107

COLLECTION AND RECOVERY OF TAX – Section [137 to 146B]

Chapter-13

MULTIPLE CHOICE QUESTIONS 1. The tax payable by a taxpayer on the taxable income of the taxpayer for a tax year shall be due on the due date for furnishing the taxpayer’s return of income for ________________ year. a. That b. Previous c. All d. None 2. Where any tax is payable under an assessment order or an amended assessment order or any other order issued by the Commissioner under this Ordinance, a notice shall be served upon the taxpayer in the prescribed form specifying the amount payable and thereupon the sum so specified shall be date of service of the notice. a. 10 b. 121 c. 30 d. 20 3. Where an assessment order or amended assessment order is issued by the ________________, the tax payable under the order shall be payable within thirty days from the date of the assessment order is issued. a. Commissioner b. Assistant Commissioner c. Deputy Commissioner d. Additional Commissioner 4. Where a taxpayer is permitted to pay tax by installments and the taxpayer defaults in payment of any installments, the ________________ balance of the tax outstanding shall become immediately payable. a. Half b. 1/4 th c. 3/4th d. Whole 5. The grant of an extension of time of pay tax due or the grant of permission to pay tax due by installments shall not preclude the liability for arising under ________________ from the due date of the tax a. Section 105 b. Section 205 c. Section 305 d. None 6. For the purpose of recovering any tax due by a taxpayer, the commissioner may serve upon the taxpayer a notice in the prescribed form requiring him to pay the said amount within time.


107


a. b. c. d.

Chapter-13

As may be specified in the notice 16 days 30 days None

7. If the amount referred to in the notice issued under sub-section (1) is not paid within the time specified therein or within the further time, if any, allowed by the commissioner, the Commissioner may proceed to recover from the taxpayer the said amount by one or more of the following modes, namely a. Attachment and sale of any movable or immovable property of the taxpayer, b. Appointment of a receiver for the movable or immovable property of the taxpayer’ and c. Arrest of the taxpayer and his detention in prison for a period not exceeding six months d. All of the above 8. for the purposes of recovery of tax, the commissioner shall have the same powers as a ________________ has under the code of civil procedure, 1908 (Act V of 1908_, for the purposes of the recovery of any amount due under a decree. a. High court b. Supreme Court c. Civil court d. None 9. Without prejudice to any other power of the District Officer (Revenue) in this behalf, he shall have the same powers as a Civil court has under the code of Civil procedure, 1908 (Act V of 1908), for the purpose of the __________________ of the amount due under a decree. a. Recovery b. Imposition c. Estimation d. None 10. If a taxpayer is declared bankrupt, the tax liability under this Ordinance shall pass on to the ___________________ in bankruptcy. a. Person b. Legal heir c. Estate d. All 11. If tax liability is incurred by an estate in bankruptcy, the tax shall be deemed to be a current __________________ in the operations of the estate in bankruptcy and shall be paid before the claims preferred by other creditors are settled.


108


a. b. c. d.

Chapter-13

Liability Income Expenditure None

12. Notwithstanding anything in the companies Ordinance, 1984 (XLVII of 1984), where any tax payable by a private company (including a private company that has been wound up or gone into liquidation) in respect of any tax year cannot be recovered from the company, every person who was, at any time in that tax year a. Jointly b. Severally c. Jointly and severally d. All 13. A shareholder who pays tax shall be entitled to ______________ the tax paid from the company or form any other shareholder to whom clause in proportion to the shares owned by that other shareholder. a. Recover b. Levy c. Hold d. All 14. Notwithstanding anything in any law, where any tax payable by a member of an association of persons in respect of the member’s share of the income of the association in respect of any tax year cannot be recovered from the member, the ________________ shall be liable for the tax due by the member. a. Member b. Board c. Association d. All 15. Where a person is liable to make a series of payments (such as salary) to a taxpayer, a notice under sub-section (1) may specify an amount to be paid out of each payment until the _______________ amount of tax due by the taxpayer has been paid. a. Full b. Some portion c. Half d. None 16. The date for payment specified in a notice shall not be a date before the money becomes _________________ to the taxpayer or held on the taxpayer’s behalf. a. Matura


109


Chapter-13

b. Payable c. Taxable d. None 17. Any person who has paid any amount in compliance with a notice shall be treated as having paid such amount under the authority of the taxpayer and the receipt of the __________________ constitutes a good and sufficient discharge of the liability of such person to the taxpayer to the extent of the amount referred to in such receipt. a. Commissioner b. Board c. Court d. None 18. The commissioner shall, within __________ of being notified under notify the liquidator in writing of the amount which appears to the Commissioner to be sufficient to provide for any tax which is or will become payable by the person whose assets are in the possession of the liquidator. a. 12 months b. 6 months c. 5 months d. 3 months 19. The tax due by a non-resident member of an association of persons in respect of the member’s share of the profits of the association shall be _____________ in the name of the association or of any resident member of the association and may be recovered out of the assets of the association or from the resident member personally. a. Refundable b. Payable c. Taxable d. Assessable 20. Before the departure of a ship owned or chartered by a non-resident person from any port in Pakistan, the master fo the ship shall furnish to the Commissioner a return showing the __________________ amount specified in sub-section (1) of section 7 in respect of the ship. a. Gross b. Net c. Taxable d. None 21. A non-resident owner or charterer of an aircraft liable for tax under section 7, or an agent authorized by the non-resident person for this purpose, shall furnish to the commissioner, within ___________________ days form the last day of each quarter of the financial year, a return, in respect of the


110


Chapter-13

quarter, showing the gross amount specified in sub-section (1) of section 7 of the non-resident person for the quarter. a. 34 b. 40 c. 45 d. None 22. Where a return has been furnished under after calling for such particulars, accounts or documents as he may require, determine the amount of tax due under ___________________________ by the non-resident person for the quarter and notify the non-resident person, in writing, of the amount payable. a. Section 17 b. Section 7 c. Section 27 d. Section 71 23. The authority to whom a certificate is issued under sub-section (4) X ______________ refuse clearance from any airport in Pakistan to any aircraft owned or chartered by the non-resident until the tax due had been paid. a. Can b. Shall c. Must d. None 24. Where any person is likely to leave Pakistan during the currency of tax year or shortly after its expiry with no intention of returning to Pakistan, he shall give of the Commissioner a notice to that effect not less than ________________ days before the probable date of his departure. a. 10 b. 15 c. 20 d. 30 25. The Commissioner may serve a notice on any person who, in his opinion, is likely to leave Pakistan during the ________________ tax year or shortly after its expiry and has no intention of returning to Pakistan, to furnish within such time as may be specified in such notice, a return or returns of taxable income for the tax year or tax years for which the taxpayer is required to furnish such return returns. a. Last b. Any c. Previous d. Current


111


Chapter-13

26. Where any person assessed to tax for any tax year under the law relating to income tax in the Azad Jammu and Kashmir has failed to pay the, The substituted section __________________ shall enforce. a. 145 b. 156 c. 180 d. None of the above 27. Liquidator of the company shall within -------- days of being appointed or taking possession of an asset in Pakistan, whichever occurs ….. shall give written notice thereof to the commissioner (a) 7, first (b) 14, first (c) 7, last (d) 14, last 28. The commissioner shall within ------- days of notice by liquidator, provide approximate amount of tax payable by the bankrupt (a) 14 (b) 30 (c) 60 (d) 90


112


Chapter-13

ANSWERS – RECOVERY OF TAXES 1

(a)

2

(c)

3

(a)

4

(d)

5

(b)

6

(a)

7

(d)

8

(c)

9

(a)

10

(c)

11

(c)

12

(c)

13

(a)

14

(c)

15

(a)

16

(b)

17

(a)

18

(c)

19

(d)

20

(a)

21

(c)

22

(b)

23

(b)

24

(c)

25

(d)

26

(d)

27

(b)

28

(b)


113

SALES TAX ACT, 1990

PRELIMINARY [Section 1 & 2]

Chapter-01

MULTIPLE CHOICE QUESTIONS 1. __________ means an officer of Inland Revenue authorised by the Board by notification in the official Gazette to perform certain functions under this Sales Tax Act. a.

appropriate officer

b.

Commissioner Inland Revenue

c.

Chief Commissioner Inland Revenue

d.

deputy officer

2. _______ means, on any day, the sales tax due and payable by the person before that day but which has not yet been paid; a.

surcharge

b.

arrear

c.

additional tax

d.

none of above

3. Associates (associated persons) means: a.

where two persons associate and the relationship between the two is such that one may reasonably be expected to act in accordance with the intentions of the other, or both persons may reasonably be expected to act in accordance with the intentions of a third person;

b.

two persons shall not be associates solely by reason of the fact that one person is an employee of the other or both persons are employees of a third person;

c.

a trust and any person who benefits or may benefit under the trust;

d.

all of above

4. “________” means the registration number or any other number allocated to a registered person. a.

NTN

b.

CNIC

c.

common taxpayer identification number

d.

all of above

5. The term “company” under the Sales Tax Act does not include ___________ a.

provincial government

b.

local government

c.

individual

d.

all of above


114


Chapter-01

6. Cottage industry" means a manufacturer whose annual turnover from taxable supplies made in any tax period during any last twelve months ending any tax period does not exceed _____. a.

Rs. 10,000,000

b.

Rs. 6,000,000

c.

Rs. 1,000,000

d.

Rs. 100,000

7. ______ means any comprehensive information technology system to be used by the Board or any other office as may be notified by the Board, for carrying out the purposes of this Act. a.

electronic tax register

b.

computerized system

c.

ERP

d.

SAP

8. ______ means a person and, every director, or partner of the company, of the firm, and includes guarantors or successors, who fail to pay the arrears. a.

defaulter

b.

associates

c.

third party

d.

representative

9. _________means a person appointed by a manufacturer, importer or any other person for a specified area to purchase goods from him for further supply and includes a person who in addition is also engaged in supply of goods as a wholesaler or a retailer; a.

supplier

b.

vendor

c.

distributor

d.

creditor

10. ______ includes any electronic data, computer programmes, computer tapes, computer disks, micro-films or any other medium for the storage of such data a.

voucher

b.

ledger

c.

report

d.

document


115


Chapter-01

11. 'Due date' in relation to the furnishing of a return u/s 26 means the ____ day of the month following the end of the tax period, or such other date as the Board may specify and different dates may be specified for furnishing of different parts or annexures of the return; a.

15th day

b.

20th day

c.

10th day

d.

none of above

12. ______ means a person appointed for filing of electronic returns and such other documents as may be prescribed by the Board from time to time, on behalf of a registered person. a.

tax house

b.

inspector

c.

e-intermediary

d.


13. _____________ means an undertaking, firm or company, whether incorporated or not, an association of persons or an individual; a.

establishment

b.

organization

c.

corporation

d.

all of above

14. 'Goods' include every kind of _______ other than actionable claims, money, stocks, shares and securities. a.

intangible items

b.

immovable property

c.

moveable property

d.

none of above

15. _____ means any person who imports any goods into Pakistan; a.

exporter

b.

importer

c.

trader

d.

none of above

16. "input tax", in relation to a registered person, means:


116


a.

tax levied on supply of goods to the person;

b.

tax levied on the import of goods by the person;

c.

Federal Excise duty in sales tax mode on goods and services to the persons.

d.

Provincial sales tax levied on services rendered or provided to the person.

e.

all of above

Chapter-01

17. _________ means the office of Superintendent of Inland Revenue or such other office as the Board may, by notification in the official Gazette, specify; a.

establishment

b.

e-intermediary

c.

local body

d.

Local Inland Revenue Office

18. 'Manufacture' or 'produce' includes a.

any process in which an article singly or in combination with other articles, materials, components, is either converted, changed, transformed or reshaped that it becomes capable of being put to use differently or distinctly and includes any process necessary to the completion of a manufactured product;

b.

process of printing, publishing, lithography and engraving;

c.

process and operations of assembling, mixing, cutting, diluting, bottling, packaging, repacking or preparation of goods in any other manner;

d.

all of above

19. ____ means the consideration in money which that supply or a similar supply would generally fetch; a.

open market price

b.

fair price

c.

arm’s length price

d.

none of above

20. 'output tax", in relation to a registered person, meansa.

tax levied under this Act on a supply of goods, made by the person;

b.

tax levied under the Federal Excise Act, 2005 in sales tax mode as a duty of excise on the manufacture or production of the goods, or the rendering or providing of the services, by the person;

c.

Provincial sates tax levied on services rendered or provided by the person;

d.

All of above


117


Chapter-01

21. ____ means the office or other place of business specified by the registered person in the application made by him for registration under this Act or through any subsequent application to the Commissioner Inland Revenue. a.

head office

b.

registered office

c.

main office

d.

none of above

22. 'Registered person’ means a person who is ____________. a.

registered

b.

liable to be registered

c.

person having NTN

d.


23. _________, with reference to the Third Schedule, means the price fixed by the manufacturer. a.

retail price

b.

open market price

c.

fair price

d.

net price

24. ____ means a person, supplying goods to general public for the purpose of consumption. a.

manufacturer

b.

retailer

c.

defaulter

d.

none of above

25. sales tax means— a.

the tax, additional tax, or default surcharge levied under this Act;

b.

a fine, penalty or fee imposed or charged under this Act;

c.

any other sum payable under the provisions of this Act or the rules made there under;

d.

all of above

26. ________ means an account representing the double entry recording of sales tax transactions in the books of account; a.

sales tax account


118


b.

sales account

c.

purchases tax account

d.

none of above

Chapter-01

27. ______, in relation to the open market price of goods, means any other supply of goods which closely or substantially resembles the characteristics, quantity, components and materials of the aforementioned goods; a.

open market supply

b.

similar supply

c.

taxable supply

d.

exempt supply

28. “supply" means a sale or other transfer of the right to dispose of goods as owner, including such sale or transfer under a hire purchase agreement, and also includes— a.

putting to private, business or non-business use of goods produced or manufactured in the course of taxable activity for purposes other than those of making a taxable supply;

b.

auction or disposal of goods to satisfy a debt owed by a person;

c.

possession of taxable goods held immediately before a person ceases to be a registered person:

d.

in case of manufacture of goods belonging to another person, the transfer or delivery of such goods to the owner or to a person nominated by him:

e.

all of above

29. 'tax fraud' means knowingly, dishonestly or fraudulently and without any lawful excuse (burden of proof of which excuse shall be upon the accused) a.

doing of any act or causing to do any act; or

b.

omitting to take any action or causing the omission to take any action, including the making of taxable supplies without getting registration under this Act; or

c.

falsifying or causing falsification the sales tax invoices,

d.

all of above

30. 'tax period' means a period of _____ or such other period as the Federal Government may, by notification in the official Gazette, specify; a.

one month

b.

two months

c.

three months

d.

twelve months


119


Chapter-01

31. In case of supply on discounted price, value of supply shall be _______. a.

open market price less amount of tax

b.

open market price

c.

discounted price less amount of tax

d.

all of above

32. ____________ means a taxable supply which is charged to tax at the rate 0%. a.

zero-rated supply

b.

exempt supply

c.

nil supply

d.

none of above

33. Sales tax act was promulgated in which of the following year? a. 1990 b. 1991 c. 1992 d. 1993 34. Sales tax Act 1990 extends to the whole of a. Punjab b. Sindh c. Pakistan d. Internationally 35. Sales tax Act 1990 shall come into force on such date as the ___________________ may, by notification in the official Gazette, appoint. a. Provincial Govt. b. High court c. Federal Court d. Federal Govt. 36. Appropriate officer means an officer of _________________ authorized by the Board by notification in the official Gazette to perform certain functions under this Act. a. FBR b. Inland Revenue c. Excise Duty d. None 37. “Arrears” In relation to a person, means, on any day, the sales tax __________________ by the person under this Act before that day but which has not yet been paid a. Due b. Payable c. Both a & b d. None


120


Chapter-01

38. Banking company’ means a banking company as defined in the Banking Companies Ordinance __________________ a. 1960 b. 1961 c. 1962 d. 1956 39. “Board” means the Federal Board of Revenue established under section 3 of the Federal Board of Revenue Act, ______________________ a. 1900 b. 2007 c. 2009 d. None 40. “Chief commissioner” means a person appointed as the chief commissioner Inland Revenue under section ______________________ a. 30 b. 31 c. 32 d. 33 41. ‘What is the Meaning of Commissioner, _________________appointed under Section 30. a. The commissioner of FBR b. The commissioner of Management c. The commissioner of Inland Revenue d. None 42. “Common taxpayer identification number” means the registration number or any other number allocated to a ______________________ person. a. Common b. Foreigner c. Registered d. None 43. A company means______________. a. A body corporate formed by of under any law in force in Pakistan b. A Moradabad c. A body incorporated by or under the law of a country outside Pakistan relating to incorporation d. All of These 44. “Computerized system” means any comprehensive ___________________ system to be used by the Board or any other office as may be notified by the Board, for carrying out the purposes of this Act. a. Information technology b. Computer system c. Both a & b d. None


121


Chapter-01

45. Customs Act, means the customs Act, _________________________ and were appropriate all rules and notifications made under that Act a. 1967 b. 1968 c. 1969 d. Nome 46. “Defaulter’ means a person and , in the case of company of firm, every director, of partner of the company, or as the case may be, of the firm, of which he is a director of partner of a proprietor and includes guarantors or successors, who fail to pay the _______________________ a. Tax b. Excise duty c. Arrears d. All of These 47. “Default surcharge” means the default surcharge ________________ under section under section 34. a. Collected b. Imposed c. Levied d. None 48. Distributor means a person appointed by a manufacture, importer or any other person for a ____________________ area to purchase goods a. Specified b. All c. Foreigner d. All of These 49. Document includes any __________________ or any other medium for the storage of such data. a. Electronic data b. Computer programmes c. Computer tapes d. All of These 50. Due date in relation to the furnishing of a return under section 26 and section 26 AA means the ____________________ day of the month following the end of the tax period. a. 10th b. 15th c. 20th d. None 51. E-intermediary means a person appointed as e-intermediary under section 52A for filing of electronic returns and such other documents as may be prescribed by the Board from time to time, on behalf of a person registered under section _____________. a. 12 b. 13


122


Chapter-01

c. 14 d. 15 52. ‘Establishment’ means an ________________, whether incorporated or not, an association of persons of an individual a. Undertaking b. Firm c. Company d. All of these 53. “Firm” means the ________________ between persons who have agreed to share the profits of a business carried on by all or any of them acting for all a. Coordination b. Appropriation c. Relation d. None 54. “Exempt supply, means a supply which is exempt from tax under section _____________ a. 12 b. 13 c. 15 d. 16 55. “Goods’ include every kind of _____________________ property other than actionable claims, money, stocks, shares and securities a. Movable b. Immovable property c. All of these d. None 56. Importer means any ______________________. a. State b. Province c. Pakistan d. None

person

who

imports

any

goods

into

57. The Federal Government can be a _____________________ Under the Sales Tax Act a. Person b. Community c. Organization d. None 58. Prescribed means _________________ by rules made under this Act, a. Statute b. Elected c. Selected d. Prescribed


123


Chapter-01

59. Provincial sales tax” means tax levied under a. All provinces b. In one province c. Outside the state d. None 60. Registered office’ means the office of other place of business specified by the registered person in the application made by him for registration under this Act or through any subsequent application to the _____________________ a. Commissioner b. Chairman c. Both a & b d. None 61. ‘Registered person’ means a person who is registered or is liable to be _____________under the Law. a. Employee b. Individual c. Registered d. None 62. Registered person means a person who is registered or is liable to be registered under ___________________ a. Constitution of Pakistan b. Federal Excise Duty c. Sales Tax Act d. All of these 63. Retail price with reference to the ________________________ Schedule, means the price fixed by the manufacturer, inclusive of all duties, charges and taxes a. Second b. Third c. Fourth d. Fifth 64. Retail price; with reference to the Third Schedule, means the price fixed by the manufacture, inclusive of all duties, charges and taxes (other than sales tax) at which any particular brand or variety of any article should be sold to the general body of consumer or, if more than one such price is so fixed for the same brand of variety, the _________________ of such price. a. Highest b. Lowest c. Average d. All of these 65. Retailer’ means a person, supplying goods to general public for the purpose of _______________ a. Sale b. Purchase c. Consumption d. None


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Chapter-01

66. Retailer, means a person, supplying goods to general public for the purpose of consumption: Provided that any person, who combines the business of import and retail or manufacture of production with retail, shall notify and advertise wholesale prices and retail prices separately, and declare the address of retail outlets, and his total turnover per annum shall be taken into account for the purposes of registration under section ________________________ a. 12 b. 14 c. 16 d. 18 67. Return, means any return required to be furnished under _____________ of the sales Act a. Chapter I b. Chapter –V c. Chapter –VI d. None 68. Schedule, means a schedule __________________ to Sales Tax Act. a. Amended b. Attached c. Appended d. None 69. Similar supply; in relation of the open market price of goods, means any other supply of goods which closely or substantially resembles the _______________ and materials of the aforementioned goods. a. Characteristics b. Quantify c. Components d. All of these 70. ‘Special judge’ means the special judge ______________________ of the Customs Act. a. 85 b. 185 c. 285 d. 385

appointed

under

section

71. Special audit means an audit conducted under section _____________________. a. 31A b. 32A c. 33A d. 34A 72. Supply means a sale or other transfer of the right to dispose of goods as owner, including such sale of transfer under a hire purchase agreement, and also includes_____________________


125


Chapter-01

a. Putting to private, business or non-business or non-business use of goods produced of manufactured in the course of taxable activity for purposes other than those of making a taxable supply; b. Auction or disposal of goods to satisfy a debt owed by a person and c. Possession of taxable goods held immediately before a person ceases to be a registered person d. All of these 73. Taxable activity means any ___________________ activity carried on by a person whether or not for profit, and includes a. Economic b. Social c. Financial d. None 74. “Taxable activity” means any economic activity carried on by a person whether of not profit, and includes_______________________ a. An activity carried on in the form of a business, trade or manufacture; b. An activity that involves the supply of goods, the rendering or providing se services, or both to another person; c. A one-off adventure or concern in the nature of a trade d. All of these 75. “Taxable activity” means any economic activity carried on by a person whether or not for profit, and does not include ______________________. a. An activity that involves the supply of goods, the rendering or providing of services, or both to another person. b. Anything done or undertaken during the commencement or termination of the economic activity. c. An activity carried on in the form of a business, trade or manufacture. d. The activities of an employee providing services in that capacity to an employer. 76. “Tax fraud” means knowingly, dishonestly or fraudulently and without any _____________ excuse. a. Lawful b. Proper c. Rightful d. None 77. Tax fraud means knowingly dishonestly or fraudulently and without any lawful excuse (burden of proof of which excuse shall be upon the accused) __________________ a. Doing of any act causing to do any act. b. Omitting to take any action or causing the omission to take any action, including the making of taxable supplies without getting registration under this Act. c. Any of Above d. All of above 78. Taxable goods means all goods other than those which have been exempted under section _______________


126


a. b. c. d.

Chapter-01

10 12 13 14

79. Tax invoice means a section_______________ a. 23 b. 24 c. 35 d. 36

document

required

to

be

issued

under

80. Taxable supply, means a supply of taxable goods made by an importer manufacture, wholesaler (including dealer), distributor or retailer other than a supply of goods which is exempt under section 13 and includes a supply of goods chargeable to tax at the rate of _________________ per cent under section 4. a. One b. Two c. Three d. Zero 81. ______________________ means a period of one month or such other period as the Federal Government may, by notification in the official Gazette. a. Tax time b. Tax duration c. Tax period d. None 82. Time of supply, in relation to ______________________ a. A supply of goods, other than under hire purchase agreement means the time at which the goods are delivered or made available to the recipient of the supply. b. A supply of goods under a hire purchase agreement, means the time at which the agreement is entered into. c. Services, means the time at which the services are rendered to provided. d. All of these e. None 83. Trust” means an ___________________ annexed to the ownership of property and arising out of the confidence reposed in and accepted by the owner, or declared and accepted by the owner for the benefit of another, or of another and the owner, and includes a unit trust a. Association b. Appropriation c. Obligation d. All of these 84. CREST is an abbreviation of:a. Computerized Return and E-Filing of Sales Tax b. Computerized Risk-Based Evaluation of Sales Tax c. Certificated Return E-Filing System d. None of these.


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Chapter-01

85. ‘KIBOR’ stands for:a. Karachi Intra-Bank official Rate b. Karachi Inter-Bank Offered Rate c. Karachi Inter Bank On-Spot Rate d. None of the above. 86. _________ means the series of transaction between buyers and sellers from the stage of first purchase or import to the stage of final supply.

a. b. c. d.

Supply Supply Chain Taxable Supply All of above

87. “Tax Fraction” means the amount worked out in accordance with the following formula

a. b. c. d.

a/100+a a/100-a 100/a+b a/100+b

88. _________means any person who carries on, whether regularly or otherwise, the business of buying and selling goods by wholesale or of supplying or distributing goods directly or indirectly, by wholesale for cash or deferred payment or for commission or other valuable consideration or stores such goods belonging to other as an agent for the purpose of sale;

a. b. c. d.

Retailer Wholesaler Manufacturer defaulter


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Chapter-01

ANSWERS

1

(a)

2

(b)

3

(d)

4

(c)

5

(d)

6

(a)

7

(b)

8

(a)

9

(c)

10

(d)

11

(a)

12

(c)

13

(a)

14

(c)

15

(b)

16

(e)

17

(d)

18

(d)

19

(a)

20

(d)

21

(b)

22

(d)

23

(a)

24

(b)

25

(d)

26

(a)

27

(b)

28

(e)

29

(d)

30

(a)

31

(c)

32

(a)

33

(a)

34

(c)

35

(d)

36

(b)

37

(c)

38

(c)

39

(b)

40

(a)

41

(c)

42

(c)

43

(d)

44

(a)

45

(c)

46

(c)

47

(c)

48

(a)

49

(d)

50

(b)

51

(d)

52

(d)

53

(c)

54

(b)

55

(a)

56

(c)

57

(a)

58

(d)

59

(a)

60

(a)

61

(c)

62

(c)

63

(b)

64

(a)

65

(c)

66

(b)

67

(b)

68

(c)

69

(d)

70

(b)

71

(b)

72

(d)

73

(a)

74

(d)

75

(d)

76

(a)

77

(c)

78

(c)

79

(a)

80

(d)

81

(c)

82

(d)

83

(c)

84

(b)

85

(b)

86

(b)

87

(a)

88

(b)


129

SCOPE AND PAYMENT OF TAX – Section 3 to 13

Chapter-02

MULTIPLE CHOICE QUESTIONS 1. The sales tax is charged, levied and paid at the rate of___________. a. 16% b. 15% c. 17% d. None of the above 2. Sale tax is charged___________. a. Directly to the manufactures of goods b. Indirectly to the ultimate consumers of goods c. Indirectly to the retailers d. All of the above 3. Sales tax on imports for manufacture is included in the___________. a. Input tax b. Output tax c. Both ‘a’ and ‘b’ d. None of the above 4. While calculating the tax on imports, the addition should be made in the value of imports assessed by custom authorities in respect of___________ on imports. a. Custom duty b. Federal excise duty c. Invoice value d. Both ‘a’ and ‘b’ 5. Extra tax on specified goods under the special procedure may be charged at the rate of___________. a. 2% b. 5% c. 20% d. 17% 6. Where a registered person is making taxable as well as exempt supplies, then credit of input tax is allowed only in respect of___________.


130


Chapter-02

a. Taxable supplies b. Exempt supplies. c. Total supplies d. None of the above. 7. Withholding agent shall deduct an amount out of the total sales tax showed in the tax invoice issued by the supplier, equal to___________. a. 1/10th of total sales tax b. 1/5th of total sales tax c. 1/6th of total sales tax d. None of the above 8. It is necessary for the withholding agents to purchase taxable goods from_______. a. registered person b. non-registered person c. Both ‘a’ and ‘b’ d. None of the above 9. Where under unavoidable circumstances purchases by the withholding agent are made from an unregistered person, the sale tax deducted by the withholding agent shall be___________. a. 5% b. 10% c. 17% d. 1/5th of the tax payable by the supplier 10. The withholding agent shall issue a certificate to the supplier showing therein_____. a. The name and registration number of the supplier b. Description of goods purchase and the amount of sales tax deducted from the supplier c. Both ‘a’ and ‘b’ d. None of the above 11. While making the claim___________.

payment

of

sales

tax,

the

supplier

shall


131


Chapter-02

a. The credit of input tax b. The credit of sales tax deducted by the withholding agent c. Both a’ and ‘b’ d. None of the above 12. The non-applicability of the provision of sales tax special procedure (withholding) rule is not applicable in respect of companies engaged in___________. a. Distribution of gas electricity b. Providing telephone services, including mobile phone services c. Both ‘a’ and ‘b’ d. None of the above 13. A retailer having annual turnover less than Rs. 5 million in respect of taxable supplies made by him___________. a. Is not required to pay sales tax b. Shall pay turnover tax as per slab rates. c. Shall pay the tax irrespective of the quantum of supplies made by him d. none of the above 14. A retailer paying sales tax on electricity bill basis is__________. a. not required to be registered under the Sales Tax Act, 1990 b. required to be registered under the Sales Tax Act, 1990 c. optional for the retailer that he may be registered or not. d. none of the above 15. Goods exported out of Pakistan are charged to tax at the rate of___________. a. 10% b. 15% c. 0% d. 5% 16. Sales tax in respect of imported goods is charged at the time of ___________. a. sale of such goods b. import of goods


132


Chapter-02

c. on raising of invoice d. All of the above 17. Sales tax for taxable supplies made in Pakistan is paid at the time of ___________. a. on raising of invoice b. on receipt against sales c. filing of return d. (a) or (b) whichever is earlier. 18. Sales tax paid on purchases made from registered persons is subtracted from the ________with limitations, where applicable. a. output tax b. input tax c. income tax d. sales tax refund 19. Sales tax on sales to non-registered person is _____________. a. Output tax b. Input tax c. Exempt d. Zero rated 20. Commercial invoice is issued by a ____________. a. non-registered person b. registered person c. commercial importer d. exporter 21. _________ means price fixed by the manufacturer or importer inclusive of all charges and taxes including sales tax. a. sale price b. retail price c. total price d. consumer price


133


Chapter-02

22. Where goods falling under 3rd schedule of the Sales Tax Act, 1990 are sold by manufacturer at discount then sale price for the purpose of sales tax shall be equal to________________. a. discounted price b. retail price c. purchase price d. none of above 23. Extra tax on purchases made shall __________ as input tax against output tax. a. be available b. not available c. None of the above 24. The _________ may specify any person or a class of persons as withholding agent for the purposes of deduction and deposit of tax. a. Provincial government b. Federal government c. Board d. Commissioner Inland Revenue 25. Withholding agent means ____________________. a. Govt. departments b. autonomous bodies c. persons registered as exporters d. All of the above 26. Under ____________ circumstances goods withholding agents from unregistered persons.

can

be

purchased

by

a. special b. unavoidable c. any d. None of above. 27. The tax liability of a deceased registered person under the Sales Tax Act shall be the _____ charge on his estate in the hands of his successors. a. first


134


Chapter-02

b. last c. none of above 28. The registered supplier shall issue sales tax invoice for all _____ supplies made to the withholding agent. a. exempt supplies b. zero rated supplies c. taxable d. all of above 29. A person falling in the definition of cottage industry is _________to be registered under the Sales Tax Act, 1990. a. not required b. required c. optional d. none of the above 30. In case of retailers who are not required to get themselves registered, the sales tax paid on electricity bills by them shall discharge their tax liabilities under the ________________. a. Sales Tax Act b. Income Tax Ordinance c. FED Act d. Both ‘a’ and ‘b’ 31. The Govt. may recover the tax deducted by a person as ___________. a. arrears of tax b. penalty c. default surcharge d. none of above 32. The goods which have been entered for export, although not exported are treated as____ supplies. a. taxable b. exempt c. zero rated d. none of the above


135


Chapter-02

33. Zero rated supply are ____________. a. exempt supplies b. taxable supplies c. none of the above d. all of the above 34. The goods, which have been exported to a country specified by the _________ are not included in the zero rated supply. a. Securities and Exchange Commission of Pakistan b. Federal Government c. Chief Commissioner Inland Revenue d. Commissioner Inland Revenue 35. The credit of input tax is available on __________ supplies. a. taxable supplies b. zero rated supplies c. exempt supplies d. both ‘a’ and ‘b’ 36. An officer Inland Revenue not below the rank of Assistant Commissioner may, on payment of Rs. ___, issue an attested duplicate of any sales tax document as is available with the department or has been filed made there under to a relevant registered person applying for the same. a. 200 b. 100 c. 300 d. 400 37. The ________ may, by notification in the official Gazette, prescribe special procedure for scope and payment of tax, registration, book keeping and invoicing requirements and returns, etc; in respect of such supplies as may be specified therein. a. Board b. Federal Government c. Central Registration Office d. none of above


136


Chapter-02

38. Payment of the amount for a transaction exceeding value of Rs._______, excluding payment against a utility bill, shall be made by a crossed cheque. a. 50,000 b. 75,000 c. 100,000 d. 150,000 39. A registered retailer (having credit or debit card machines) shall deposit the sales tax along-with return on _______. a. monthly b. quarterly c. annually d. semi-annually 40. The sales tax on account of minimum value addition shall be levied and collected at import stage on goods imported for other than in house use @ ___% of the value of goods in addition to the tax chargeable under the Act. a. 6 b. 5 c. 4 d. 3 41. Any person who has collected any tax which was not payable or which is in excess of the tax actually payable then such amount shall be deemed to be an _____ payable to the Federal Government and no claim for refund shall be allowed in this respect. a. arrear of tax b. default surcharge c. additional tax d. none of above 42. The burden of proof that the incidence of tax has been or has not been passed to the consumer shall be on the person _____________. a. paying the tax b. collecting the tax c. both ‘a’ and ‘b’ d. none of above


137


Chapter-02

43. If there is a change in the rate of tax, a taxable supply made by a registered person shall be charged to tax at such rate as is in force at the __________. a. time of supply b. time of purchase c. time of payment of goods d. none of above 44. If there is a change in the rate of tax, imported goods shall be charged to tax on the date on which a goods declaration is presented if goods are _________. a. cleared from warehouse b. entered for home consumption c. both ‘a’ and ‘b’ d. none of above 45. Where a person imports goods, the tax paid by him thereon during a period of __________ days before making an application for registration shall be treated as an input tax subject to fulfillment of certain conditions. a. 70 b. 80 c. 90 d. none of above 46. The tax in respect of goods imported into Pakistan shall be charged and paid at the same time as if it were a __________. a. sales tax b. custom duty c. value addition tax d. none of above 47. The tax in respect of taxable supplies shall be paid at the time of __________. a. sale of goods b. purchase of goods c. filing of return d. export of goods


138


Chapter-02

48. Where a registered person did not deduct input tax within the relevant period, he may claim such tax in the return for any of the ___ succeeding tax periods. a. 6 b. 7 c. 8 d. 9 49. If a person fails to file the return or pays an amount which is less than the amount of tax actually payable, an officer Inland Revenue shall, after a notice to show cause to such person, make an order for assessment of tax, including imposition of ________. a. penalty b. default surcharge c. both ‘a’ and ‘b’ d. none of above 50. Where a registered person pays the amount of tax less than the tax due as indicated in his return, the short paid amount of tax along with default surcharge shall be recovered from such person by ____ a. stopping of removal of goods from business premises b. through attachment of his business bank accounts c. both ‘a’ and ‘b’ d. none of above 51. Supply of goods or import of goods specified in the ___the Schedule as specified by the Federal Government is exempt from tax. a. 6 b. 5 c. 4 d. 7 52. The Commissioner Inland Revenue or an Officer Inland Revenue may, in respect of any transaction between persons who are associates, determine the transfer price of taxable supplies between the persons as is necessary to reflect the ______ of supplies in an arm's length transaction. a. cost value


139


Chapter-02

b. fair market value c. net realizable value d. none of above 53. In case of termination of taxable activity or part thereof or its sale or transfer of ownership to a non-registered person, the possession of taxable goods or part thereof by the registered person shall be deemed to be a ________ supply. a. taxable b. exempt c. zero rated supply d. none of above 54. The tax liability of a deceased registered person under the Act shall be the ______ charge on his estate in the hands of his successors. a. last b. first c. second d. none of above 55. If a registered person is declared bankrupt, the tax liability under this Act shall pass on to the ______ if it continues to operate the business. a. legal representative b. successor c. estate in bankruptcy d. none of above 56. If any difficulty arises in giving effect to the provisions of this Act or the rules made or notifications issued there under, the _______ may through a general order or otherwise, issue instructions-or directions, not inconsistent with the provisions of this Act, for such actions to be taken by an Officer Inland Revenue or any other person as it considers necessary or expedient for the purpose of removing the difficulty. a. Board b. Commissioner Inland Revenue c. Appellate Tribunal Inland Revenue d. none of above


140


Chapter-02

57. Where an AOP is dissolved, any notice, order or requisition required to be served on the association may be served on _____________ immediately before such dissolution. a. principal officer b. member c. both ‘a’ and ‘b’ d. none of above 58. Where, business stands discontinued, any notice, order or requisition required to be served on the person discontinuing the business may be served on the _________ at the time of discontinuance. a. person personally b. person’s representative c. both ‘a’ and ‘b’ d. none of above 59. Where any private company or business enterprise is wound up and any tax chargeable on the company or business enterprise, cannot be recovered from the company or business enterprise, every person who was a owner of, or partner in, or director of, the company or business enterprise during the relevant period shall, ________, be liable for the payment of such tax. a. jointly and severally b. individually c. none of above 60. The tax paid on goods purchased by a person who is subsequently required to be registered or gets voluntary registration shall be treated as input tax, provided that such goods were purchased by him from a registered person against an invoice issued during a period of ______ days before making an application for registration. a. 60 b. 30 c. 90 d. 120 61. “unit trust” means any trust under which _______________________ interests are divided into units such that the entitlements of the beneficiaries to income or capital are determined by the number of units held


141


a. b. c. d.

Chapter-02

Beneficial Economic Tax None

62. Value of supply, means is respect of a ___________________________ supply, the consideration in money including all Federal and provincial duties and taxes, if any, which the supplier receives from the recipient for that supply but excluding the amount of tax. a. Imposable b. Levi able c. Enforceable d. Taxable 63. In case the consideration for a supply is in kind or is partly in kind and partly in money, the value of the supply shall mean the open market price of the supply ___________ the amount of tax a. Including b. Exempting c. Excluding d. All of these 64. In case the supplier and recipient are associated persons and the supply is made for no consideration or for a consideration which is ___________________ than the open market price, the value of supply shall mean the open market price of the supply excluding the amount of tax a. Higher b. Lower c. Highest d. All of these 65. In case of trade discounts, the discounted price _______________ the amount of tax; provided the tax invoice shows the discounted price and the related tax and the discount allowed is in conformity with the normal business practices a. Excluding b. Including c. Both a & b d. None 66. In case where there is sufficient reason to believe that the value of a supply has not been correctly declared in the invoice, the value determined by the valuation committee comprising representatives of trade and the Inland Revenue constituted by the _____________________. a. Chief officer b. Commissioner


142


Chapter-02

c. Any officer d. None 67. Tax invoice means a document required to be issued under section_____. a. 23 b. 24 c. 25 d. 26 68. Zero-rated supply means a taxable supply which is charged to tax at the rate of zero per cent under section____________. a. 4 b. 24 c. 34 d. None 69. Subject to the provision of the Act, there shall be charged, levied and paid a tax known as sales tax at the rate of _____________________ percent of the value of taxable suppliers made by a registered person in the course or furtherance of any taxable activity carried on by him; and goods imported into Pakistan. a. 10 b. 12 c. 14 d. 17 70. Taxable supplies specified in the ______________________________ Schedule shall be charged to tax at the rate of 17% of the retail price which along with the amount of sale tax shall be legibly, prominently and indelibly printed or embossed by the manufacture on each article, packet, container, package, cover or label, as the case may be a. First b. Second c. Third d. None 71. _______________________ may, by notification in the official Gazette, exclude and taxable supply from the said Schedule or include any taxable supply therein a. FBR b. Federal Government c. Supreme Court d. None 72. The liability to pay the tax shall be _______________. a. In the case of supply of goods, of the person making the supply, and


143


Chapter-02

b. In the case of goods imported into Pakistan, of the person importing the goods c. Both a & b d. None 73. The Federal Government may, in addition to the tax levied under _________________ of section 3 may levy and collect such extra amount of tax not exceeding 17% of the value of such goods or class of goods and on such personas or class of persons in such mode, manner and at time, and subject to such conditions and limitation as it may, by rules, prescribe a. Sub section (1) b. Sub-section (2) c. Sub-section (4) d. All of these 74. The Federal Government or the Board may, in lieu of the tax under _______________ of section 3 by notification in official Gazette, levy and collect such amount of tax as it may deem fit on any supplies or class of supplies or on any goods or class of goods and may also specify the mode, manner or time of payment of such amount of tax, a. Sub-section (3) b. Sub-section (2) c. Sub-section (1) d. None 75. If goods declaration is presented in advance of the arrival of the conveyance by which the goods are imported, the tax shall be charged as is in force on the date on which ___________________________. a. Order was made b. Purchase order was made c. Sale invoice was recognized d. Manifest of the conveyance is delivered 76. If the tax is not paid within ____________________ days of the presenting of the goods declaration under section 104 of The Sales Tax Act, 1990, the tax shall be charged at the rate as is in force on the date on which tax is actually paid. a. 7 b. 15 c. 30 d. 60 77. The tax in respect of goods imported into Pakistan shall be charged and paid in the same manner and at the same time as if it were a duty of customs payable under the customs Act, 1969 and the provisions of the said Act including section__________________ thereof, shall so far as they


144


Chapter-02

relate to collection, payment and enforcement of tax under this Act on such goods where no specific provision exists in this Act, apply a. 31A b. 31B c. 31C d. 31D 78. The tax due on taxable supplies shall be paid by any of the following does, namely ____________________. a. Through deposit in a bank designated by the Board; and b. Through such other mode and manner as may be specified by the Board c. A only d. Both a & b 79. A registered person shall not be entitled to deduct input tax from output tax unless_________________ a. In case of a claim for input tax in respect of a taxable supply made, he holds a tax invoice in his name and bearing his registration number in respect of such supply for which a return is furnished. b. In case of goods imported into Pakistan, he holds bill of entry or goods declaration in his name and showing his sales, tax registration number, duly cleared by the customs under section 79 or section 104 of the Customs Act, 1969. c. In case of goods purchased in auction, he holds a treasury challan, in his name and bearing his registration number, showing payment of sales tax d. All of these 80. Notwithstanding anything in sub-section (1) and (2), the Federal Government may, by a special order, subject to such conditions, limitations or restrictions as may be specified therein allow a registered person to ___________________ input tax paid by him from the output tax determined or to be determined as due from his under this Act, a. Deposit b. Deduct c. Exempt d. All of these 81. Notwithstanding anything contained in this Act, a registered person shall not be entitled to reclaim or deduct input tax paid on ______________________ a. The goods or services used or to be used for any purpose other than for taxable supplies made or to be made by him. b. Any other goods or services which the Federal Government may, be a notification in the official Gazette, specify. c. The goods under section 3(5). d. All of these


145


Chapter-02

82. Anything contained in any other law for the time being in force or any decision of any court, for the purposes of this section, no input tax credit shall be allowed to the person who paid fixed tax under any provisions of this Act as it existed at any time prior to the ___________________ day of December, 1998 a. 1st b. 2nd c. 3rd d. 4th 83. The adjustment or refund of input tax, if any, shall be made on ________________ basis in the second month following the end of the financial year of the registered person. a. Monthly b. Quarterly c. Half annually d. Yearly 84. Where a registered person has issued a ______________________ in respect of a supply made by him and as a result of cancellation of supply or return of goods the registered person may, subject to such conditions and limitations as the Board may impose, issue a debit or credit note and make corresponding adjustment against output tax in the return a. Tax invoice b. Credit note c. Debt note d. None 85. Where there is reason to believe that a person has claimed input tax credit or refund which was not admissible to him, the proceedings against him shall be completed within _______________ days. a. 30 b. 60 c. 120 d. 150 86. For the purposes of enquiry or audit or investigation regarding admissibility of the refund claim, the period of 60 days may be extended up to one hundred and _______________ by an officer not below the rank of an additional commissioner inland revenue a. Ten b. Twenty c. Thirty d. Fifty


146


Chapter-02

87. Where the is reason to believe that a person has claimed input tax credit or refund which was not admissible to him, the proceedings against him shall be completed within sixty days. For the purposes of enquiry or audit or investigation regarding admissibility of the refund claim, the period of sixty days may be extended up to one hundred and twenty days by an officer not below the rank of an Additional CIR and the Board may, for reasons to be recorded in written, extend the aforesaid period which shall in no case exceed___________________ a. One month b. Three c. Nine months d. Twelve 88. An OIR shall make an assessment of sales tax actually payable by that person or determine the amount of tax credit or tax refund which he has ________________ claimed and shall impose a penalty and charge default surcharge. a. Unlawfully b. Lawfully c. Both a & b d. None 89. Provided further that any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding ____________________ days shall be excluded from the computation of the period. a. Thirty b. Fifty c. Seventy d. None 90. If the input paid by a registered person on taxable purchases made during a tax period exceeds the put tax on account of zero rated local supplies of export made during that tax period, the excess amount of input tax shall be refunded to the registered person not later than ___________________ days of filing of refund claim in such manner and subject to such conditions as the Board may, by notification in the official Gazette specify a. 40 b. 45 c. 50 d. 55 91. If a registered person is liable to pay any tax, default surcharge or payable under any law administered by the Board, the refund of input tax shall be


147


Chapter-02

made after adjustment of ____________________ outstanding amount of tax or, as the case may, default surcharge and penalty. a. Unpaid b. Paid c. Collected d. None 92. Where there is reason to believe that a person has claimed input tax credit or refund which was not admissible to him, the proceedings against him shall be completed within sixty day. For the purposes of enquiry or audit or investigation regarding admissibility of the refund claim, the period of 60 days may be extended up to 120 days by an officer not below the rank of an __________________ Inland Revenue and the Board may, for reasons to be recorded in written, shall in no case exceed 9 months. a. Commissioner b. Chief commissioner c. Chairman d. Additional commissioner 93. Where a person who is required to file a tax return fails to file the return for a tax period by the due date or pays an amount which, for some miscalculation is less than the amount of tax actually payable, an officer of 2Inland Revenue shall, after a notice to show cause to such person, make an order for assessment of tax, including imposition of penalty and default surcharge in accordance with section ___________________. a. 31 and 34 b. 33 and 35 c. 33 and 34 d. 33 and 37 94. When a person required to file a tax return files the return after the due date and pays the amount of tax payable in accordance with the tax return along with default surcharge and penalty, the notice to show cause and the order of assessment shall _______________________ a. Remain existed b. Increase c. Abate d. None 95. Any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding ___________ shall be excluded from the computation of the period specified in the first proviso. a. Thirty days b. One thirty days c. Two thirty days


148


Chapter-02

d. None 96. Where a registered person fails to file a return, and OIR, not below the rank of __________________, shall subject to such conditions as specified by the FBR, determine the minimum tax liability of the registered person a. Extra assistant commissioner b. Additional assistant commissioner c. Assistant commissioner d. None 97. Where a registered person pays the amount of tax less than the tax due as indicated in his return, the short paid amount of tax along with default surcharge shall be recovered from such person by stopping removal of any goods from his business premises and through attachment of his business bank accounts, without giving him a show cause notice and without prejudice to any other action prescribed under section __________________ of the Act. a. 44 b. 48 c. 58 d. All of these 98. If the amount shown in the tax invoice or the return needs to be modified the registered person shall issue a: a. Debit Note b. Credit Note c. (a) or (b) above d. None of these


149


Chapter-02

ANSWERS – SCOPE & PAYMENT OF TAX 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96

(c) (a) (c) (b) (b) (c) (a) (b) (a) (b) (a) (a) (a) (b) (b) (a) (d) (b) (a) (c)

2 7 12 17 22 27 32 37 42 47 52 57 62 67 72 77 82 87 92 97

(b) (b) (c) (d) (b) (a) (a) (b) (b) (c) (b) (c) (d) (a) (c) (a) (d) (c) (d) (b)

3 8 13 18 23 28 33 38 43 48 53 58 63 68 73 78 83 88 93 98

(a) (a) (a) (a) (b) (d) (b) (a) (a) (a) (a) (c) (c) (a) (d) (d) (d) (a) (c) (c)

4 9 14 19 24 29 34 39 44 49 54 59 64 69 74 79 84 89 94

(d) (c) (a) (a) (b) (a) (b) (a) (b) (c) (b) (a) (b) (d) (c) (d) (a) (a) (c)

5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95

(a) (c) (c) (a) (d) (a) (d) (d) (c) (c) (c) (b) (a) (c) (d) (b) (b) (b) (a)


150

REGISTRATION – Section 14, 21 & 21A

Chapter-03

MULTIPLE CHOICE QUESTIONS Q.1 Registration through application is one in which a person who is not liable to be registered under the Sales Tax Act, submits ________________. (a)

Sales tax return

(b)

application for registration

(c)

income tax return

(d)


Q.2 Compulsory registration is made without the application by the __________. (a)

Concerned person

(b)

tax department

(c)

supplier of the concerned person

(d)

all of the above

Q.3 A commercial exporter who intends to obtain sales tax refund against the ______ is liable to be registered under the Sales Tax Act. (a)

Exempt supplies

(b)

taxable supplies

(c)

zero rated supplies

(d)

all of the above

Q.4 A person liable to be registered shall make an application to the ___ after making taxable supplies. (a)

Local Registration Office

(b)

Computerization registration

(c)

Regional Tax Office

(d)

Pakistan Revenue Automation Limited

Q.5 A corporate person has an option to apply for the transfer of registration to the ___ having jurisdiction where the place of business is located instead of his registered office. (a)


(b)

CRO

(c)

Regional Tax Office

(d)

Pakistan Revenue Automation Limited


151


Chapter-03

Q.6 Where a person holds such a stock in respect of which the input tax was paid prior to his registration then he should also provide the detail of _______. (a)

Unsold or unused stock

(b)

opening stock

(c)

purchases made

(d)

sale of such stock

Q.7 The verification of application for registration may be conducted through _____. (a)


(b)

CRO

(c)

Regional Tax Office

(d)


Q.8 The application for the registration is made only through electronic means provided by the ____. (a)


(b)

CRO

(c)

Regional Tax Office

(d)

Board

Q.9 In case of approval of change in the registration from the ____ shall issue a revised registration certificate which will be effective from the date of approval of change. (a)


(b)

CRO

(c)

Regional Tax Office

(d)

Board

Q.10 The CIR is empowered to transfer the registration of a registered person from ____________. (a)

One collector to another

(b)

Large Taxpayer Unit to Regional Tax Office


152


(c)

both ‘a’ or ‘b’

(d)

None of the above

Chapter-03

Q.11 On transfer of registration, it is not compulsory to transfer all the record and liabilities of the registered person to the______ or Large Taxpayer Unit or regional tax office. (a)

Collector

(b)

Large Taxpayer Unit

(c)

Regional Tax Office

(d)

all of the above

Q.12 A registered person may apply to Local Registration Office for deregistration / cancellation of his sales tax registration _________________; (a)

on ceasing to carry on his business

(b)

where supplies become exempt from tax

(c)

where total taxable turnover during the last twelve months remains below the limit of Rs.5 million

(d)

all of the above

Q.13 On application for de-registration or the Local Registration Office may recommend to the CRO to cancel the registration of such person from such date as may be specified, but not later than 90 days _______. (a)

from the date of such application

(b)

from the date all the dues outstanding against such person are deposited by him.

(c)

from the date of such application or the date all the dues outstanding against such person are deposited by him, whichever is the later.

(d)

none of the above

Q.14 If a registered person fails to file tax return for six consecutive months, ____________________ recommend to the central registration office for cancellation of the registration after satisfying that no tax liability is outstanding against such person (a)

the Local Registration Office may, after issuing a notice in writing

(b)

without giving an opportunity of being heard to such person


153


(c)

the Local Registration Office may, after issuing a notice in writing and after giving an opportunity of being heard to such person

(d)

all of the above

Chapter-03

Q.15 After the blacklisting of a registered person, the invoices issued ______________by such person shall not be entertained for the purposes of sales tax refund or input tax credit. (a)

after blacklisting

(b)

before blacklisting

(c)

after and before blacklisting

(d)

none of the above

Q.16 In cases where the that a registered person is found to have issued fake invoices or has otherwise committed tax fraud, ____________may blacklist such person or suspend his registration in accordance with such procedure as the Board may, by notification in the official Gazette (a) Additional Commissioner (b) Chief Commissioner (c) Commissioner (d) All of these Q.17 Under Sales Tax Act, registration will be required for such persons and be regulated in such manner and subject to rules as the board may, by notification in the _____________. (a) Official Gazette (b) News paper (c) Both a & b (d) None Q.18 ___________________ authorized in this behalf, may subject to the rules, deregister a registered person or such class of registered persons not required to be registered under this Act. (a) The board (b) Any officer (c) Both a & b (d) Either a or b Q.19 De-registration, blacklisting and suspension of registration are dealt under section ____ of Sales Tax Act, 1990. (a)

31

(b)

32


154


(c)

21

(d)

22

Chapter-03

Q.20 Every retailer whose value of supply in any period during the last twelve months ending any tax period exceeds (a) 20 Million Rupees (b) 10 Million Rupees (c) 25 Million Rupees (d) 15 Million Rupees


155


Chapter-03

ANSWERS 1

(b)

2

(a)

3

(c)

4

(b)

5

(a)

6

(a)

7

(a)

8

(d)

9

(b)

10

(c)

11

(a)

12

(d)

13

(c)

14

(c)

15

(c)

16

(c)

17

(a)

18

(a)

19

(c)

20

(a)


156

Book Keeping and Invoicing Requirement – Section [22 to 25AA]

Chapter-04

MULTIPLE CHOICE QUESTIONS Q.1. Companies which are also registered under the sales tax act are required to submit the copy of audited accounts______________: (a)

Annually.

(b)

Semi-annually

(c)

Quarterly

(d)

Monthly.

Q.2. Tax invoice shall be issued by______________: (a)

A registered person

(b)

A non-registered person

(c)

Person paying retail tax

(d)

Both ‘a’ and ‘c’

Q.3. The records and documents which are required to be maintained under Sales Tax Act, shall be retained for the period of____________: (a)

2 years

(b)

3 years

(c)

5 years

(d)

6 years after the end of relevant tax year.

Q.4 The registered person should maintain the record at his ___________. (a)

business premises

(b)

registered office

(c)

head office

(d)

both ‘a’ or ‘b’

Q.5 After sales tax registration, the record of _________ is necessary to be maintained. (a)

exempt supplies

(b)

zero rated supplies

(c)

sales to non-registered person

(d)

all of the above


157


Chapter-04

Q.6 ____ can specify to the taxpayer, bank accounts which shall be used making or receiving payments and making payment of tax due. (a)

Central Registration Office

(b)

Board

(c)

taxpayer

(d)


Q.7 Records can also be maintained on _______ in such a form and manner as prescribed by the board. (a)

Computer

(b)

electronic cash register

(c)

none of the above

Q.8 Where the records are kept on computer, it is also required to keep the _______ of such records. (a)

hard copy

(b)

back up

(c)

hard disk

(d)

all of the above

Q.9 The law requires that every registered person shall issue a tax invoice at the time of ________________. (a)

Purchase of goods

(b)

making supply of goods

(c)

making exempt supply

(d)

making supply at discounted price

Q.10 The tax invoice shall also contain value of goods ___________. (a)

inclusive of sales tax

(b)

exclusive of sales tax

(c)

sales tax

(d)

all of the above


158


Chapter-04

Q.11 Tax invoice cannot be issued ___________. (a)

manually

(b)

in duplicate

(c)

in triplicate

(d)

none of the above

Q.12 A sales tax officer may have access to the ______ kept by the taxpayer as and when required. (a)

stock

(b)

records

(c)

plant and machinery

(d)

computer

Q.13 An audit by the tax officer generally conducted _________ in a year as necessary to verify the records obtained by the taxpayer. (a)

as many times

(b)

once

(c)

two times

(d)

None of the above

Q.14 The officer appointed for the purpose of investigation about the records kept should not be below the rank of _________. (a)


(b)


(c)

Assistant Commissioner

(d)

None of the above

Q.15 Where a show-cause notice has been issued, _________ of penalty shall be recovered from the taxpayer (a)

25%

(b)

50%

(c)

75%


159


(d)

Chapter-04

100%

Q.16 Where an authorized officer of Inland Revenue considers it necessary to take a sample of any goods or raw materials to determine the value of goods and sales tax liability or for any other reason, he may remove a ___________quantity to enable him for proper examination or analysis to be made. (a)

minimum

(b)

maximum

(c)

average

(d)

none of the above

Q.17 The Commissioner Inland Revenue or an officer of Inland Revenue may, in respect of any transaction between persons who are associates, determine the transfer price of taxable supplies between the persons on the basis of _______________. (a)

Fair Market Value

(b)

Net Realisable Value

(c)

market value

(d)

Discounted value

Q.18 A registered person making taxable supplies shall maintain and keep at his business premises or registered office in _______________________ language the following records of goods purchased, imported and supplies (including zero-rated and exempt supplies) made by him or by his agent acting on his behalf in such form and manner as would permit ready ascertainment of his tax liability during a tax period (a) English (b) Urdu (c) Either a or b (d) None Q.19 Records of supplies made shall indicate the ____________________ of goods, name and address of the person to whom supplies were made and the amount of the tax charged. (a) Description (b) Quantity (c) Value (d) All of these


160


Chapter-04

Q.20 Notwithstanding anything in any other law for the time being in force, the Board may require, by notification in the official Gazette, a registered person of class of registered persons to declare and use only as many number of business bank accounts as may be specified by the _____________________ in such notification to make or receive payments on account of purchase and sale transactions of the purpose of this Act or rules made there under and to make payment of due tax from such accounts only (a) Board (b) Commissioner (c) Additional commissioner (d) All of these Q.21 The Board may, by notification in the official Gazette, specify for any class of _________________ persons or any other person registered under this Act to keep such other records for the purposes of this Act. (a) Registered (b) Non registered (c) Taxable (d) None Q.22 The registered persons, whose accounts are subject to audit under the companies ordinance, ___________________, shall be required to subject a copy of the annual audited accounts, along with a certificate by the auditors certifying the payment of due tax by the registered person (a) 1980 (b) 1982 (c) 1983 (d) 1984 Q.23 A registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars __________________. (a) Name, address and registration number of the supplier (b) Name, address and registration number of the recipient (c) Date of issue of Invoice (d) All of these Q.24 __________________________ person / persons other than a registered person or a person paying retail tax shall issue and invoice under this section (a) One (b) Two (c) Three


161


(d)

Chapter-04

No

Q.25 A person, who is required to under this Act, shall retain the record and documents for a period of _____________________ years after the end of the tax period to which such record or documents relate or till the final decision in any proceedings including proceeding for assessment, appeal, revision, reference petition and any proceedings before an alternative Dispute Resolution Committee. (a) Six (b) Eight (c) Ten (d) None Q.26 The officer of Inland Revenue, on the basis of the record, obtained, may, _________________ in a year, conduct audit. (a) Once (b) Twice (c) Thrice (d) None Q.27 The commissioner has information or sufficient evidence showing that such registered person in involved in tax fraud or evasion of tax, he may authorize an officer of Inland Revenue, not below the rank of Assistant Commissioner, to conduct an inquiry or investigation under section_____________________ (a) 36 (b) 37 (c) 38 (d) 40 Q.28 The Inland Revenue officer from conducting audit of the records of the registered person if the same were earlier audited by the office of the _____________ of Pakistan. (a) Accountant General (b) Auditor-General (c) Both A & b (d) None Q.29 The Assistant Commissioner (Audit), shall issue audit observation pointing out the contraventions of the Act or rules, as the case may be, and the amount of tax evaded therein, on the basis of scrutiny of such records, as prescribed under the Act or rules or in any other manner by the Board, The registered person may, within a period of _____________________ days of the receipt of audit observation, submit his point of view in writing. (a) 10 (b) 12


162


(c) (d)

Chapter-04

14 15

Q.30 If, within the period 15 days no reply is received or the reply furnished by the registered person is found unsatisfactory, the ______________________ shall issue an audit report specifying the amount of tax or charge that has not been levied or has been short levied or has been erroneously refunded or any other violation of may provision of Act or rules made there under (a) Chief commissioner (b) Extra Assistant Commissioner (c) Assistant Commissioner (d) None Q.31 Notwithstanding the penalties prescribed in section 33, if a registered person wishes to deposit the amount of tax short paid of the amount of tax short paid of amount of tax evaded along with default surcharge voluntarily, whenever it comes to his notice before receipt of notice of audit _____________________ shall be recovered from him (a) Full penalty (b) Half penalty (c) Double penalty (d) No penalty Q.32 If a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge during the audit or at any time before issuance of show cause notice in lieu of the audit report, he may deposit the evaded amount of tax, default surcharge under section 34, and __________________ per cent of the penalty payable under section 33. (a) 20 (b) 25 (c) 30 (d) 40 Q.33 If a registered person wishes to deposit the amount of tax short paid or amount of tax evaded along with default surcharge after issuance of show cause notice, he shall deposit the evaded amount of tax, default surcharge under section 34, and full amount of the penalty payable under section 33 and thereafter, the show cause notice shall stand __________________________, (a) Continue (b) Abated (c) Nullify (d) None


163


Chapter-04

Q.34 At the time of taking the sample the person in possession of the goods shall be informed and given the opportunity to sign the representative samples, so drawn, and take a corresponding sample for his record. Any sample taken under this section shall be taken against a proper receipt a copy each of which shall be kept in the record by the registered person at __________________, (a) Large Taxpayers Unit (b) Regional Tax Office (c) Both a & b (d) Either a or b Q.35 Transactions between associates, The Commissioner or an office of Inland Revenue may, in respect of any transaction between persons who are associates, determine the transfer price of taxable supplies between the persons as is necessary to reflect the fair ______________________ of supplies in an arm’s length transaction. (a) Market value (b) Face value (c) Purchase (d) None Q.36 Section ____ empowers an authorized Officer of Inland Revenue to take a sample of any good or raw material for determining their liability to sales tax. (a) 25 (b) 25-A (c) 25-AA (d) 26


164


Chapter-04

ANSWERS 1

(a)

2

(a)

3

(d)

4

(d)

5

(d)

6

(b)

7

(a)

8

(b)

9

(b)

10

(d)

11

(a)

12

(b)

13

(b)

14

(c)

15

(d)

16

(a)

17

(a)

18

(c)

19

(d)

20

(a)

21

(c)

22

(d)

23

(d)

24

(d)

25

(a)

26

(a)

27

(c)

28

(a)

29

(a)

30

(c)

31

(d)

32

(b)

33

(b)

34

(b)

35

(a)

36

(b)


165

RETURNS – Section [26 to 29]

Chapter-05

MULTIPLE CHOICE QUESTIONS Q.1. Normally sales tax return is filed by due date on ____________basis. (a)

Monthly

(b)

Quarterly

(c)

Semi-annually

(d)

Annually

Q.2. The bank shall charge as service charges from the collectorate Rs. ___________. (a)

20

(b)

10

(c)

30

(d)

15 per return

Q.3. The revised sales tax return can be filed within________________ of filing of original return, subject to approval of Commissioner Inland Revenue having jurisdiction. (a)

120 days

(b)

60 days

(c)

30 days

(d)

None of the above

Q.4. Every registered person, being a private or public limited company, shall file annual sales tax return, for a financial year by the ______________of the following financial year. (a)

30th September

(b)

15th October

(c)

31st December

(d)

All of above

Q.5. Where a registered person operates in different sectors for which different dates of filing of return have been prescribed, such person shall file a single return for all sectors by such date applicable to _____. (a)

Individuals

(b)

Companies


166


(c)

His major activity

(d)

None of above

Chapter-05

Q.6. In case of non-furnishing of information required by Board, the penalty shall be of Rs ____________. (a)

25,000

(b)

10,000

(c)

5,000

(d)

None of above

Q.7 A person who is registered under the sales tax Act is required to file a ______ with the sales tax authorities. (a)

Sales tax return

(b)

Income tax return

(c)

detail of sales

(d)

detail of purchases

Q.8 In case of no activity shall_____________.

during

(a)

not file return

(b)

file null return

(c)

file nil business return

(d)

file an application for deregistration

Q.9 In case of any change period,________________.

in

the

tax

the

rate

period,

of

registered

tax

during

(a)

Changed rate shall be applicable on period before such change

(b)

Changed rate shall have effect on period after such change

(c)

One return before change and one return after change shall be filed

(d)

None of above

person

a

tax

Q.10 A person filing sales tax return shall deposit the amount of sales tax with __________. (a)

Income tax department


167


(b)

Designated bank

(c)

Central Registration Office

(d)


Chapter-05

Q.11 Every registered person is required to file the sales tax returns in ________on E-portal. (a)

Triplicate

(b)

Duplicate

(c)

Singly

(d)

None of the above

Q.12 The sales tax returns are to be filed in the designated branches of _________________. (a)

State Bank of Pakistan

(b)

National bank of Pakistan

(c)

Silk bank

(d)

None of above

Q.13 Every private company is also required to file ____________ return in addition to monthly sales tax returns. (a)

annual

(b)

Quarterly

(c)


(d)

All of the above

Q.14 The electronic filing of sales tax returns is required from __________. (a)

Companies

(b)

AOPs

(c)

Individuals

(d)

All of the above

Q.15 The Board has an authority to require ________ to furnish such summary or detail as may be notified by it. (a)

Companies

(b)

AOPs


168


(c)

Individuals

(d)

Any person

Chapter-05

Q.16 A retail sales tax return filed by a retailer uptill ______________, where sales is paid with the sales tax return. (a)

15th of the same month

(b)

18th of the next month

(c)

10th of the same month

(d)

20 of the next month

Q.17 A ________ is in lieu of monthly sales tax return or retail tax return. (a)

Statement of sales

(b)

Detail of output tax

(c)

Declaration of sales tax

(d)

Special return

Q.18 A person applying for de-registration shall furnish a _________. (a)

Special return

(b)

Final return

(c)

Nil return

(d)

all of the above

Q.19 A sales tax return filed by the _________shall deemed as return filed by the taxpayer himself. (a)

Authorized representative

(b)

Any person

(c)


(d)

None of the above

Q.20 Nil return is filed by a person where there is no _____________during the tax period. (a)

Sales

(b)

Purchases


169


(c)


(d)

Sales tax payable

Chapter-05

Q.21 Every registered person shall furnish not later than the due date, a true and correct return in the prescribed form to the designated bank of any other office specified by the Board, indicating the purchases and the supplies made during a ____________________ the tax due and paid and such other information (a) (b) (c) (d)

Tax period Financial period Both a & b None

Q.22 The Board may, by notification in the official Gazette, require any person or class or persons to submit return on __________________ basis. (a) Yearly (b) Half year; (c) Quarterly (d) None Q.23 The Board may, by notification in the official Gazette, require any person or class or persons to subject such return as may be prescribed annually in addition to the ______________, (a) (b) (c) (d)

Monthly return Quarterly return Either a or b None

Q.24 A person registered under this Act, shall furnish special return within such date and in such form indicating information such as ___________________ made, etc, for such period as the Board may, by a notification in official gazette. (a) Quantity manufactured or produced (b) Purchases made (c) Goods supplied or payment of arrears (d) All of these Q.25 The commissioner may require any person whether, registered or not, to furnish a return) whether on his own behalf or as an agent or trustee) in a prescribe form and such person shall furnish the return not ___________________ than the date specified in the regard. (a) Later


170


(b) (c) (d)

Chapter-05

Earlier Before All of these

Q.26 A person who applies for de-registration shall require to furnish a final return under Section ___ of Sales Tax Act, 1990. (a)

27

(b)

28

(c)

29

(d)

30

Q.27 Normally sales tax return is filed by due date on ____________basis. (a)

Monthly

(b)

Quarterly

(c)

Semi-annually

(d)

Annually


171


Chapter-05

ANSWERS 1

(a)

2

(b)

3

(a)

4

(a)

5

(c)

6

(b)

7

(a)

8

(b)

9

(b)

10

(b)

11

(c)

12

(b)

13

(a)

14

(d)

15

(d)

16

(b)

17

(d)

18

(b)

19

(a)

20

(d)

21

(a)

22

(c)

23

(c)

24

(d)

25

(a)

26

(b)

27

(a)


172

APPEALS – Section [45A to 47A]

Chapter-06

MULTIPLE CHOICE QUESTIONS 1. ___ may, by itself, call for and examine the record of any departmental proceedings under this Act. a. Board b. Appellate Tribunal Inland Revenue c. Commissioner Inland Revenue d. Chief Commissioner Inland Revenue 2. No order shall be made after the expiry of ___ years from the date of original decision or order of sub-ordinate officer. a. 6 b. 5 c. 7 d. 10 3. An appeal preferred after the expiry of 30 days may be admitted by the ____if he is satisfied that the appellant has sufficient cause for not preferring the appeal within the specified period. a. Commissioner Inland Revenue b. Chief Commissioner Inland Revenue c. Commissioner Inland Revenue (Appeals) d. Board 4. Appeal shall be accompanied by a fee of ____to be paid in such manner as the board may prescribed. a. Rs.4,000 b. Rs.3,000 c. Rs.2,000 d. Rs.1,000 5. The Commissioner Inland Revenue (Appeals) shall pass an order within 120 days from the date of filing of appeal and he may extend that period for reasons to be recorded in writing. The extended period shall not exceed the ___ days in any case. a. 70


173


Chapter-06

b. 60 c. 120 d. 30 6. Application to the High Court shall be made within ___ days of the communication of the order of the Appellate Tribunal. a. 90 b. 100 c. 120 d. 365 7. A reference to the High Court shall be heard by a bench consisting of at least ___ judges of the High Court and in respect of reference. a. 3 b. 2 c. 4 d. 5 8. On the recommendation of the alternative dispute resolution, the Board may pass such order, as it may deem appropriate within ___ days of recommendations of committee. a. 90 b. 100 c. 120 d. 365 9. The person other than the Additional Commissioner authorized by the CIR shall pay a fee of Rs.___ with an application to High Court. a. 200 b. 100 c. 150 d. 300


174


Chapter-06

10. Any person including an officer of Inland Revenue at least an Additional Commissioner, aggrieved by any order passed by the Commissioner Inland Revenue (Appeals), the Commissioner Inland Revenue through adjudication or under any of the provisions of this Act or rules, the Board may, prefer an appeal to Appellate Tribunal within ___ days of receipt of such order or decision. a. 60 b. 70 c. 80 d. 90 11. The board may, of its own motion, call for and examine the record of any departmental proceedings under this Act or the rules made there under for the purpose of satisfying itself as to the __________________ of any decision or order passed there in by an Officer of Inland Revenue, it may pass such order as it may think fit. a. Legality b. Propriety c. A OR b d. Both a & b 12. No order shall be made under section 45A(3) after the expiry of ________________________ years from the date of original decision or order of the sub-ordinate officer. a. Five b. Six c. Seven d. Eight 13. The commissioner Inland Revenue (Appeals) may, after giving both parties to the appeal and opportunity of being heard, pass such order as he think fit, ________________ setting aside or annulling the decision or order appealed against. a. Confirming b. Varying c. Altering d. All of these 14. Any order shall be passed not later than ___________________ days from the date of filing or appeal or within such extended period as the Commissioner Inland Revenue (appeals) may, for reasons to be recorded in writing fix. a. 100 QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

175


Chapter-06

b. 120 c. 150 d. 180 15. Any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding ____________________ days shall be excluded from the computation of aforesaid periods. a. 15 b. 20 c. 25 d. 30 16. Any person including an officer of Inland Revenue not below the rank of an _____________ , aggrieved by any order passed by (i) The commissioner Inland Revenue (Appeals) (ii) The commissioner Inland Revenue through adjudication or under any of the provisions of this Act or rules made there under, (iii) The Board under section 45A, may, within 60 days of the receipt of such decision or order, prefer appeal to the Appellate Tribunal a. Additional commissioner b. Extra Additional Commissioner c. Commissioner d. All of these 17. The Appellate Tribunal may admit, hear and dispose of the appeal as per procedure laid down in sections 131 and _________________ of the income tax Ordinance, 2001 a. 134 b. 133 c. 132 d. 130 18. Within _____________________ days of the communication of the order of the Appellate Tribunal section 46(5), the aggrieved person of any officer of Inland Revenue not below the rank or an Additional Commissioner, authorized by the Commissioner may prefer an application in the prescribed form along with a statement of the case to the high Court, starting any question of law arising out of such order a. 60 b. 80 c. 90 d. 120


176


Chapter-06

19. Section 5 of the Limitation Act, ________________________ shall apply to an application made to the High Court under section 46A(1). a. 1904 b. 1906 c. 1907 d. 1908 20. Anything contained in any provision of this Act, where any reference of appeal was filed with the approval of Commissioner by the officer of lower rank than the commissioner, and the reference or appeal is pending before an appellate forum or the Court, such reference or appeal shall always be deemed to have been so filed by the _____________________ a. Judge b. Chairman c. Member d. Commissioner 21. If the committee fails to make recommendations with the period of 90 days, the Board shall dissolve the committee and constitute a new committee which shall decide the matter within a further period of ___________________ days. a. 40 b. 60 c. 80 d. 90 22. The Board may, on the recommendation of the committee, pass such order, as it may deem appropriate within ___________________ days of the receipt of the recommendations of the Committee. a. 30 b. 45 c. 60 d. 90.


177


Chapter-06

ANSWERS

1

(a)

2

(b)

3

(c)

4

(d)

5

(b)

6

(a)

7

(b)

8

(a)

9

(b)

10

(a)

11

(c)

12

(a)

13

(d)

14

(b)

15

(d)

16

(c)

17

(c)

18

(c)

19

(d)

20

(d)

21

(b)

22

(b)


178

RECOVERY OF ARREAS - [Section 48]

Chapter-07

MULTIPLE CHOICE QUESTIONS Q.1 Where any amount of tax is due from any person, the CIR may _______. (a)

(b)

(c) (d)

Deduct the amount from any money owing to person from whom such amount is recoverable and which may be at the disposal or in the control of such officer or any officer of Income Tax, custom or central excise department. Require by a notice in writing any person who holds or may subsequently hold any money for or on account of the person from whom tax may be recoverable to pay to such officer the amount specified in notice. Stop removal of any goods from the business of such person till such time the amount of tax is paid or recovered in full. all of above

Q.2 If any arrears of tax default surcharge, penalty of any other amount which is adjudged or payable by any person and which cannot be recovered in the manner prescribed above, the Board or any officer authorized by the ____________________, may, write off the arrears in the manner as may be prescribed by the Board (a) (b) (c) (d)

Board Commissioner Additional commissioner None

Q. 3 For the purpose of ______________________________ of tax, penalty of any other demand raised under this Act, the officer of Inland Revenue shall have the same power which under the code of civil procedure 1908, a Civil court has for the purpose of recovery of an amount due under a decree. (a) (b) (c) (d)

Imposition Collection Penalty Recovery


179

RECOVERY OF ARREAS - [Section 48]

Chapter-07

ANSWERS 1

(d)

2

(a)

3

(d)


180

MISCELLANEOUS [Section49 to 75]

Chapter-08

MULTIPLE CHOICE QUESTIONS 1. In case of __________________________ of taxable activity of part there of or its sale or transfer of ownership to a non-registered person, the possession of taxable goods or part thereof by the registered person shall be deemed to be a taxable supply and the registered person shall be required to account for and pay the tax on the taxable goods held by him. a. Continuation b. Termination c. Both a & b d. None 2. If the tax payable by such registered person remains unpaid, the amount of unpaid tax shall be the first charge on the assets of the business and shall be payable by the __________________________ of business. a. Owner b. Director c. Transferee d. None 3. Every person who is ________________shall within specified time give written notice to the Commissioner. a. A liquidator of company’ b. A receiver appointed by a court or appointed out of Court c. A trustee for a bankrupt; or d. All of these 4. Every liquidator shall, within _________________ days of being appointed or taking possession of an asset in Pakistan, whichever occurs first, give written notice thereof to the commissioner. a. 10 b. 12 c. 14 d. 17 5. A trustee for a bankrupt shall, within___________________ months of being notified, notify the liquidator, commissioner , in writing, of the amount which appears to the commissioner to be sufficient to provide for any sales tax which is or will become payable by the person whose assets are in the possession of the liquidator. a. 1 b. 3 c. 5 d. None 6. The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this Act including rules for charging fee for


181


Chapter-08

processing __________________________ and other documents and for preparation of copies thereof. a. Return b. Claims c. Both a & b d. None 7. A ________________________ shall not, without leave of the commissioner, part with any asset held as liquidator until the liquidator has been notified a. Liquidator b. Trustee c. Owner d. All of these 8. All rules made on any other provision of sales Tax Act, shall be collected, arranged and published along with general Orders and departmental instructions and rulings, if any, at appropriate intervals and sold to the __________________ at reasonable price. a. Public b. Department c. Market d. None 9. The Board may prescribe the use of __________________ system for carrying out the purposes of this Act, including the receipt of Applications for registration, returns and such other declarations or information required to be provided under this Act and the rules made There under from such date and for such registered persons of class of persons as the Board may, by notification in the official Gazette, specify. a. Computerized b. Manual c. Either a OR b d. None 10. The Board may make rules for regulating the conduct and transaction of business in relation to the submission of returns or other information to the board by the persons required to transmit or receive any information through the computerized system, including matters such as, grant of _______________________ of authorization and for security of the information transmitted or received through the computerized system a. Suspension b. Cancellation c. All of these 11. Unless otherwise proved, the information received in the computerized system from or on behalf of any registered person shall, for all


182


Chapter-08

__________________ purposes, be deemed to have been furnished by and received from such registered person. a. Official and legal b. Official c. Legal d. None 12. The business information gathered through computerized system shall be __________________ to be used only for official and legal purposes no unauthorized person shall claim for any access to such information. a. Public b. Legal c. Proper d. Confidential 13. No suit shall be brought in any civil court to ____________________ any order passed, any assessment made, any tax levied, any penalty imposed of collection of any tax made under this Act. a. Modify b. Change c. Alter d. All of these 14. A registered person required to appear before the Appellate Tribunal or an officer of Inland Revenue in connection with any proceeding under this Act may, in ___________________, authorize any person [having such qualification as may be prescribed] to represent him or appear on his behalf. a. Oral b. Verbally c. Writing d. All of these 15. The return of such other documents filed by an e-intermediary on behalf or a registered person shall be deemed to have been filed by the ____________________ person. a. Depositing b. Actual c. Registered d. None 16. Where an e-intermediary, authorized by a registered person to act on his behalf, knowingly or willfully submits a false or incorrect information or document or declaration with an intent to avoid payment of tax due of any part thereof or claiming a tax credit or a refund that is not due to the registered person, such e-intermediary_______________________ jointly


183


Chapter-08

and severally responsible for recovery of the amount of tax short paid or the amount refunded in excess. a. Shall be b. Shalln’t be c. In some cases d. All of these 17. If tax liability is incurred by an estate in bankruptcy, the tax is deemed to be a current expenditure in the operations of the estate in bankruptcy and shall be paid _________________________ the claims preferred by other creditors are settled. a. After b. At the time of payment of c. Before d. None 18. Clerical or arithmetical errors in any assessment, adjudication, order or decision may, at any time a be corrected by the officer of Inland Revenue who ____________________ the assessment or adjudication or passed such order or decision or by his successor in office a. Checked b. Approved c. Made d. All of these 19. For the purpose of this act, the expression representative in respect of a registered person, means ___________________. a. Where the person in an individual under a legal disability, the guardian or manager who receives or is entitled to receive income on behalf, or for the benefit of the individual; b. Where the person is a company (other than a trust, a provincial Government, or local authority in Pakistan), a director of a manager or secretary or agent or accountant or any similar officer of the company; c. Where the person is a trust declared by a duly executed instrument in writing whether testamentary or otherwise, any trustee of the trust d. All of these 20. No person shall be declared as the representative of a non-resident person unless the person has been given an opportunity by the _____________________ of being heard. a. Deputy commissioner b. Assistant commissioner c. Commissioner d. Chief commissioner


184


Chapter-08

21. Any tax that is payable by a representative of a registered person shall be recoverable from the representative only to the extent of any assets of the registered person that are ___________or control of the representative a. possession b. not in possession c. with third parties d. none of the above 22. The tax paid on goods purchased by a person who is subsequently required to be registered under section_________________________ due to new liabilities or levies or gets voluntary registration under this Act or the rules made there under, shall be treated as input tax. a. 14 b. 16 c. 18 d. 20 23. Where a person imports goods the tax paid by him thereon during a period of ___________________________ days before making an application for registration shall be treated as an input tax subject to the condition that he holds the bill of entry relating to such goods and also that these are verifiable unsold or un-compulsory registration or on the date of application for registration or for voluntary registration, a. 60 b. 90 c. 120 d. 150 24. When any goods which have been imported into Pakistan and on which tax has been paid on importation are re-exported outside Pakistan and such goods are capable of being identified, __________________________ of such tax shall, except as otherwise hereinafter provided, be repaid as drawback, and the provisions of Customs Act, 1969 (IV of 1969), relating to drawback fo customs duties shall, so far as may apply to such tax, as they apply for the purposes of that Act. a. Five fourth b. Three fourth c. Seven fifth d. Seven – eighth 25. Notwithstanding anything contained in section 62, the repayment of sales tax as drawback in respect of goods which have been taken into use between importation and re-exportation shall be subject to such orders, conditions or limitations as may be passed or imposed by the board in each case ___________________


185


Chapter-08

a. Modifying the amount of tax which shall be repaid as drawback on any such goods or class of goods b. Prohibiting the repayment of tax as drawback on nay such goods or class of goods c. Varying the condition for the grant of drawback on any such goods or class of such goods by restricting the period after importation within which the goods must be re-exported. d. All of these e. Any OR a b c 26. Tax has not been charged in any area on any supply which was otherwise taxable, or according to the said practice the amount charged was __________________ then the amount that should have actually been charged a. Less b. Equal c. More d. None 27. No refund of tax claimed to have been paid or over paid through inadvertence, error or misconstruction or refund on account of input adjustment not claimed within the relevant tax period, shall be allowed, unless the claim is made within ______________________________ of the date of payment a. 3 years b. Two years c. One year d. None 28. In a case where the refund has become due on account of any decision or judgment of any officer of Inland Revenue of court of the Tribunal, the period of __________________ shall be reckoned from the date of judgment or decision of such officer, court of Tribunal. a. One year b. Two years c. Three d. Four 29. The application or claim filed under this section shall be disposed of within a period not exceeding ____________________ days from the date of filing of such application or claim. a. 30 b. 60 c. 90 d. 120


186


Chapter-08

30. Where a refund due under section 10 is not made within the time specified in this behalf, there shall be paid to the claimant in addition to the amount of refund due to him, a further sum equal to KIBOR per _________________________ of the amount of refund due, from the date following the expiry of the time specified as aforesaid, to the day preceding the day of payment of refund. a. Annum b. Month c. Week d. None 31. When any person is expressly or impliedly authorized by a registered person to be his agent for all or any of the purposes of this Act, the registered person ______________________ responsible for the act done by his agent a. Shall not be b. Shall be c. Can be d. May be 32. An officer of Inland Revenue not below the rank of Assistant Commissioner may, on payment of _________________________ Rupees issue and attested duplicate of any Inland Revenue document as is available with the department or has been filed under this Act or rules made there under to a relevant registered person applying for the same. a. 1000 b. 500 c. 300 d. 100 33. Notwithstanding anything contained in this Act or any other law for the time being in force or any decision of any court the trade enrolment certificate Schemes Immediately in force before the Commencement of the Finance Act, _______________________ shall be deemed to be validly made under this Act, a. 1997 b. 1998 c. 1999 d. None 34. Payment of the amount for a transaction exceeding value of ______________________ thousand rupees, excluding payment against a utility bill, shall be made by a crossed cheque drawn on a bank or by crossed bank draft or crossed pay order. a. 30 b. 50


187


Chapter-08

c. 70 d. 90 35. Payment in case of a transaction on credit is so transferred thin _______________ days of issuance of the tax invoice. a. 30 b. 60 c. 90 d. 180 36. Online transfer of payment from the business account of buyer to the business account of supplier as well as payment through ______________________ shall be treated as transactions through the banking channel, subject to the condition that such transactions are verifiable from the bank statements of the respective buyer and the supplier. a. Credit card b. Bank draft c. Money order d. None 37. The first Schedule of sale tax Act is omitted vide Finance Supplementary (Amendment ) Act, 1997, with effect from 28, march _______________________ a. 1994 b. 1997 c. 1998 d. 1999 38. Supply to duty free shops, provided that in case of clearance from duty free shops against various baggage rules issued under the Customs Act, 1969, the supplies from duty free shops shall be treated as __________________ for the purpose of levy of sales tax a. Export b. Import c. Either a or b d. None 39. Appellate Tribunal means the Appellate Tribunal Inland Revenue establish under section ___________________ of the Income Tax Ordinance 2001 a. 120 b. 130 c. 136 d. 150 40. The express “KIBOR” means ________________ prevalent on the first day of each quarter of the financial year.


188


a. b. c. d.

Chapter-08

Khyber inter-bank other rate Karachi inter-bank of closing rate Karachi inter-bank of offered rate Karachi inter-bank offered Revenue

41. _____________________ means the office of superintendent of Inland Revenue of such other office as the Board, may by notification in the official Gazette, specify. a. Local Sale Tax Office b. FBR c. Inland Revenue d. All of these 42. Any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time take through adjournment by the petitioner not exceeding _________________________ days shall be excluded from the computation of the period specified in the first proviso. a. 20 b. 25 c. 30 d. 40 43. Summons are sent to any defaulter procedure_______________________. a. 1908 b. 1910 c. 1912 d. 1914

under

Code

of

civil

44. The validity of any notice issued under this Act of the validity any service of a notice under this Act ____________________ be called into question after the notice has been complied within any manner. a. Shall not b. Shall c. May not d. None 45. Any order, Notice or requisition require to be served on a resident individual is sent by a register post or courier service to the individual’s (a) e-mail address (b) last known address in Pakistan (c) official address (d) None of the above


189


Chapter-08

46. No person shall be declared as the representative of non-resident person unless the person has been given an opportunity by the _____of being heard. (a) Inspector Inland Revenue (b) Commissioner (c) Collector (d) None of these. 47. Drawback is allowed on re-export but not such drawback is repaid unless the re-export is made within a period of ___ years from date of importation as per record of Custom House. (a) 03 (b) 02 (c) 01 (d) 04 48. Board may select persons or classes of persons for audit of tax affairs through ____ (a) Random Selection (b) Computer Ballot (c) Manual Entry (d) None of the above. 49. According to Section 72C, Board may give ________ to Inland Revenue Officer/Officials in cases involving concealment or evasion of sales tax and other taxes, on their meritorious conduct in such cases. (a) Promotion (b) Cash Reward (c) Certificate of Appreciation (d) None of these


190


Chapter-08

ANSWERS 1 6 11 16 21 26 31 36 41

(c) (c) (a) (a) (a) (a) (b) (a) (a)

2 7 12 17 22 27 32 37 42

(c) (a) (d) (c) (a) (c) (d) (c) (c)

3 8 13 18 23 28 33 38 43

(d) (a) (c) (c) (b) (a) (c) (b) (a)

4 9 14 19 24 29 34 39 44

(c) (d) (c) (d) (d) (c) (b) (b) (a)

46

(b)

47

(d)

48

(b)

49

(b)

5 10 15 20 25 30 35 40 45

(b) (a) (c) (c) (e) (a) (d) (c) (b)


191

FEDERAL EXCISE ACT, 2005

PRELIMINARY [Section 1 and 2]

Chapter-01

MULTIPLE CHOICE QUESTIONS Q.1 When did The Federal Excise Act, 2005 come into force. a. 1st day of July, 2005 b. 5st day of June, 2005 c. 1st day of June, 2005 d. 10st day of July, 2005 Q.2 The Federal Excise Act, 2005 extends to ________. a. the whole of Punjab. b. the whole of Baluchistan c. the whole of Pakistan d. the whole of Islamabad Q.3 Any authority competent to pass any order or decision under this Act or the rules made there under, but does not include the Board or Appellate Tribunal is called ________. a. Commissioner authority. b. Board authority. c. Adjudicating authority. d. A and B. Q.4 Adjustment means deduction of amount of duty paid on __________ used in the manufacture or production of other goods from the amount of duty payable on such other goods in the prescribed manner. a. Goods and services b. Goods c. Services d. None of the above Q.5 Appellate Tribunal means the Appellate Tribunal Inland Revenue established under ________ of the Income Tax Ordinance, 2001. a. Section 113 b. Third Schedule c. Section 130. d. Fifth Schedule.


192


Chapter-01

Q.6 ________ established under the Central Board of Revenue Act, 1924 and on the commencement of the Federal Board of Revenue Act, 2007, the Federal Board of Revenue established under section 3 thereof;. a. Securities of Exchange Commission of Pakistan means the Federal Board of Revenue. b. Tribunal means the Appellate Tribunal. c. Board means the Central Board of Revenue. d. Board means the Federal Board of Revenue. Q.7 A person appointed as a Commissioner Inland Revenue under section 29 would be ________. a. Inspector Inland Revenue. b. Commissioner. c. Chief Commissioner. d. None of the above Q.8 ________ means a person appointed by a manufacturer in or for a specified area to purchase goods from him for sale to a wholesale dealer in that area. a. Distributor. b. Company. c. Retailer. d. Wholesaler. Q.9 Due date, in relation to furnishing a return under section 4, means the ______________ the end of the month, or such other date as the Federal Government may, by notification in the official Gazette, specify. a. 25th day of the month following. b. 18th day of the month before. c. 30th day of the month before. d. 15th day of the month following. Q.10 Supply of dutiable goods made by a manufacturer other than a supply of goods which is exempt under section 16 of the Act is called _________ ; a. Dutiable goods b. Dutiable supply


193


Chapter-01

c. Dutiable services d. Dutiable goods and services Q.11 Goods leviable to excise duty under this Act or as specified in the First Schedule and includes goods manufactured or produced in non-tariff area and brought for use or consumption to tariff area is called ____________. a. Goods b. Dutiable goods c. Supply d. Dutiable supply Q.12 KIBOR stands for a. Karachi Internet Bank Offered Rupees. b. Karachi International Banking Operating Rate. c. Karachi Inter Bank Offered Rate. d. Karachi Inter Banking Offered Rupees. Q.13 A person, as per definition of The Federal Excise Act, 2005 does not includes: a. A company. b. An association. c. Foreign Government. d. Provincial Government or the Federal Government. Q.14 Manufacture does not includes a. Any process incidental or ancillary to the completion of a manufactured product. b. Any person who employs hired labour in the production or manufacture of goods. c. Any person who operate service sector and engaged labour for that purpose. d. Any person who engages in the production or manufacture of goods on his own account if such goods are intended for sale. Q.15 Adjudicating authority means any authority competent to pass any order or decision under this Act or the rules made there under, but do not include the ______________________. a. Board b. Appellate Tribunal c. Both a & b QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

194


Chapter-01

d. None Q.16 “Adjustment” means _______________________ of amount of duty paid on goods used in the manufacture or production of other goods form the amount of duty payable on such other goods in the prescribed manner. a. Deduction b. Adjustment c. Imposition d. None Q.17 The Board may, by notification in the official Gazette, specify the goods or services in respect of which _______________________ shall be issued electronically and prescribe the manner and procedure therein. a. Sales invoice b. Purchase invoice c. Both purchase and sales invoice d. None Q.18 “Board “ means the Federal Board of Revenue established under the central Board of Revenue Act, 1924 and on the commencement of the Federal Board of Revenue Act, 2007, the Federal Board of Revenue established under section __________________ thereof. a. 1 b. 2 c. 3 d. 4 Q.19 ______________________ means an officer of Federal Excise notified as Collector of Federal Excise under this Act. a. Collector b. Commissioner c. Director d. None Q.20 “conveyance” means any means of transport used for carrying _______________________ such as vessel, aircraft, vehicle or animal etc. a. Goods b. Passengers c. Goods or passengers d. All of these Q.21 “Default surcharge” means _________________________________ a. Section 4

surcharge

levied

under


195


Chapter-01

b. Section 6 c. Section 7 d. Section 8 Q.22 “Distributor” means a person appointed by a ___________________________ in or for a specified area to purchase goods from him for sale to a wholesale dealer in that area. a. Manufacture b. Owner c. Distributor d. None Q.23 “Due date” In relation to furnishing a return under section 4, means the __________________ day of the month following the end of the month or such other date as the Federal Government may, be notification in the official Gazette. a. 15th b. 20th c. 25th d. None Q.24 Dutiable goods “mans all excisable goods specified in the First schedule except those which are exempt under section _________________________ a. 10 b. 12 c. 16 d. 18 Q.25 ”Dutiable supply” means a supply of dutiable goods made by a manufacturer other than a supply of goods which is _________________________ under section 16 of the Act, a. Exempt b. Include c. Preclude d. None Q.26 Dutiable services means all excisable services specified in the ____________________ Schedule except those which are exempt under section 16 of the Act, a. 2nd b. 1st c. 3rd d. 4th


196


Chapter-01

Q.27 Duty means any sum payable under the provisions of this Act or the rules made there under and includes the default surcharge and the duty chargeable at the rate of _______________ per cent. a. Zero b. One c. Two d. Three Q.28 Duty due means duty in respect of supplies made or services provided or rendered during a month and shall be paid at the time of __________________ of return. a. Entering b. Filling c. Filing d. All of these Q.29 Establishment includes an ________________________, incorporated or not, an association of persons and an individual. a. Undertaking, b. Firm c. Company d. All of these

whether

Q.30 Officer Inland Revenue means any person appointed by the Board as OIR u/s 29 or any person including an Officer of the provincial Government) invested by the _________________ with any of the powers of an Officer of Inland Revenue under this Act or rules made there under. a. Board b. Chairman c. Both a & b d. None Q.31 Franchise means an authority given by a franchiser under which the franchisee is contractually or otherwise granted any right to __________________________ in or do any other business activity in respect of goods or to provide service or to undertake any process identified with franchiser against a fee or consideration including royalty or technical fee, whether or not a trade mark, service mark, trade name, logo, brand name or any such representation or symbol, as the case may be, is involved. a. Produce b. Manufacture c. Sell or trade d. All of these


197


Chapter-01

Q.32 “Goods” means goods leviable to excise duty under this Act or as specified in the First Schedule and includes goods manufactured or produced in nontariff area and brought for use or consumption to ________________________ area. a. Public b. Open c. Trade d. Tariff Q.33 . ________________________ includes fire, marine, theft, accident and other such miscellaneous insurance. a. Servants b. Public c. Group d. Goods insurance Q.34 KIBRO means Karachi inter Bank Offered Rate prevalent ____________________ day of each quarter of the financial year a. Last b. First c. 15th d. None

on

Q.35 ”Manufacture” includes __________________ a. Any process incidental a or ancillary to the completion of a manufactured product b. Any process of re-manufacture, remaking, reconditioning of packing or repacking such product c. Both a & b d. Either a & b Q.36 ”None-fund banking services includes all ______________________ based services provided or rendered by the banking companies or non-banking financial institutions against a consideration in the form of a fee or commission or charge. a. Interest ful b. Non-interest c. Paid d. None Q.37 _____________________ means Azad Jamu and Kashmir, Northern Areas and such other territories or areas to which this Act does not apply. a. Non-tariff area b. Non-tax area c. Non-custom area d. None QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

198


Chapter-01

Q.38 _____________________ includes a company, an association, a body of individuals, whether incorporated or not, a public or local authority, a provincial Government or the Federal Government. a. Company b. Party c. Person d. All of these Q.39 Registered person means a person who is registered or is required to be registered under this Act provided that a person who is not registered but is required to be registered shall not be entitled to any benefit or privilege under this Act of rules made there under, unless he is registered and such benefit and privilege, unless allowed by Board, shall be confined to ______________________ of registration. a. Period b. Process c. Procedure d. None Q.40 Sale and purchase with their grammatical variations and cognate expressions, mean any transfer of the possession of ________________________ or rendering and providing of services by one person to another in the ordinary course of trade or business for cash or deferred payment or other consideration. a. Goods b. Money c. Persons d. All of these Q.41 _________________________ means the manner of collection and payment under the sales Tax Act, 1990, and rules made there under, of the duties of excise chargeable under this Act specified to be collected and paid as if such duties were tax chargeable under section 3 of the said Act and all the provisions of that Act and rules, notifications, orders and instructions made or issued there under shall mutatis mutandis, apply to the excise duty so chargeable. a. Sales tax b. Sales tax mode c. Sales tax module d. None Q.42 Services means services facilities and utilities leviable to excise duty under this Act or as specified in the First Schedule read with __________________ of the Pakistan customs Tariff, including the services, facilities and utilities QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

199


Chapter-01

originating from Pakistan or its tariff area or terminating in Pakistan or its tariff area a. Chapter 92 b. Chapter 98 c. Chapter 99 d. None Q.43 Supply includes _______________________________ of goods and shall include such transaction as the Federal Government may notify in the official Gazette from time to time. a. Sale b. Lease c. Disposition d. All of these Q.44 Wholesale dealer means a person who buys or sells goods wholesale for the purpose of trade or manufacture, and includes a broker or commission agent who, in addition to making contracts from the sale or purchase or goods for others, stocks such goods belonging to other as an a ____________________________ for the purpose of sale. a. Agent b. Owner c. Dealer d. None


200


Chapter-01

ANSWERS 1

(a)

2

(c)

3

(c)

4

(b)

5

(c)

6

(d)

7

(b)

8

(a)

9

(d)

10

(b)

11

(a)

12

(c)

13

(c)

14

(c)

15

(c)

16

(a)

17

(a)

18

(c)

19

(a)

20

(c)

21

(d)

22

(a)

23

(a)

24

(c)

25

(a)

26

(b)

27

(a)

28

(c)

29

(d)

30

(a)

31

(d)

32

(d)

33

(d)

34

(b)

35

(c)

36

(b)

37

(a)

38

(c)

39

(a)

40

(a)

41

(b)

42

(b)

43

(d)

44

(a)


201

Levy, Collection and payment of duty

Chapter-02

MULTIPLE CHOICE QUESTIONS Q.1 Duty under The Federal Excise Act, 2005 is levied on the following except:a. Goods produced or manufactured in Pakistan. b. Goods imported into Pakistan. c. Services provided in Pakistan including the services originated outside but rendered in Pakistan. d. Capital work in progress imported into Pakistan. Q.2 Duties under The Federal Excise Act, 2005 are levied at ________ percent except the rates are specified for levy of duty under the ________ of The Federal Excise Act, 2005. a.

Sixteen, First schedule.

b.

Seventeen, Second schedule.

c.

Fifteen, First schedule.

d.

Ten, Third schedule.

Q.3 A registered person may, subject to approval of the Commissioner Inland Revenue of Federal Excise having jurisdiction, file a revised return within ________ days of the filing of return to correct any omission or wrong declaration made therein. a. one hundred and eighty b. Sixty. c. one hundred and twenty. d. Ninety. Q.4 For every _________, a registered person shall furnish not later than the due date a true and correct return in such manner and form as may be prescribed by the Board by notification in the official Gazette. a. Month b. Quarter c. Year d. None of the above Q.5 The goods exported out of Pakistan shall be charged to duty at the rate of ________ under The Federal Excise Act, 2005. a. Zero per cent.


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Chapter-02

b. Seventeen per cent c. One per cent d. Sixteen per cent. Q.6 For the purpose of determining net liability of duty in respect of any goods, the duty already paid on goods and used ________ as input goods for the manufacture or production of such goods shall be deducted from the amount of duty calculated on such goods. a. Indirectly. b. Directly. c. None. d. Both A and B. Q.7 Under The Federal Excise Act, 2005 default surcharge is the amount:a. Paid in excess of normal duty due in case of non filing of return. b. Paid in addition to the duty due if a person does not pay the duty due or any part thereof within the prescribed time. c. Paid in addition to the duty due if a person receives/claims a refund of duty which is not refundable to him. d. Both (b) and (c). Q.8 Under The Federal Excise Act, 2005 default surcharge will be calculated at the rate:a. KIBOR plus three per cent per annum. b. KIBOR plus three per cent per month. c. KIBOR plus two per cent per annum. d. KIBOR plus two per cent per month. Q.9 Mr. A collected Rs. 10,000 as duty on the goods from the consumer whereas actual amount to be collected was Rs. 8,000. Mr. A deposited Rs. 10,000 and claimed the excess duty deducted i.e. Rs. 2,000 as refund from the Government. With Reference to section 11 of The Federal Excise Act, 2005 his claim of refund is justifiable? a. Yes, he can claim Rs. 2,000 b. Yes, he can claim Rs. 2,000 but cannot adjust it against his liability. c. No he cannot claim Rs. 2,000.


203


Chapter-02

Q.10 Where any good is chargeable to a duty on the basis of retail price, duty thereon shall be paid on the retail price fixed by the manufacturer, inclusive of all duties, charges and taxes, _________ sales tax levied and collected under section 3 of the Sales Tax Act, 1990; a. Including b. Other than c. Including 50% of d. Other than 50% of Q.11 Any person engaged in the production or manufacture of goods or providing or rendering services liable to duty of excise under The Federal Excise Act, 2005 shall, unless otherwise specified, be required to obtain registration in the prescribed manner _______________of such goods or services. a. When his sales exceeds Rs. 25 Million b. Regardless of his annual turnover or volume of sales c. When his annual turnover exceeds Rs. 5 Million and volume of sales increases. d. When he supplies to the registered person Q.12 Where any person under The Federal Excise Act, 2005 has not levied or paid any duty or has short levied or short paid such duty or where any amount of duty has been refunded erroneously, such person shall be serviced with notice requiring him to show cause for payment of such duty provided that such notice shall be issued within ______ from the relevant date. a. Five years b. Six years c. Three months. d. One year Q.13 Under The Federal Excise Act, 2005 Officer Inland Revenue shall issue an order within ______ of issuance of show cause notice or within such extended period as the Commissioner may, for reasons to be recorded in writing, fix, provided that such extended period shall in no case exceed ______ for recovery of duty: a. one hundred and twenty days, sixty days. b. sixty days, one hundred and twenty days. c. one hundred and eighty days, ninety days. d. ninety days, one hundred and eighty days.


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Chapter-02

Q.14 All goods imported, produced or manufactured in Pakistan and services provided or rendered except such goods and services as are specified in the ______ shall be exempt from whole of excise duties levied under section 3 of The Federal Excise Act, 2005. a. Second Schedule b. First Schedule c. Third Schedule d. Fourth Schedule Q.15 Every person registered for the purposes of The Federal Excise Act, 2005 shall maintain and keep record for a period of __________. a. Seven Years b. Five Years c. Four Years d. Six Years Q.16 Every person registered for the purposes of The Federal Excise Act, 2005 shall maintain and keep record of the followings except. a. Records of production, stocks and inventory b. Record of cash and bank accounts c. Records of goods cleared and sold without payment of duty d. Records of imports and exports Q.17 A person registered under The Federal Excise Act, 2005 shall issue for each transaction a serially numbered invoice at the time of clearance or sale of goods, __________, or providing or rendering services a. Including goods chargeable to duty at the rate of ninety per cent b. Excluding goods chargeable to duty at the rate of zero per cent c. Including goods chargeable to duty at the rate of zero per cent d. Excluding goods chargeable to duty at the rate of ninety per cent Q.18 Invoices issued should contain the followings except. a. Name, address and registration number of the seller. b. Name, address and registration number of the buyer. c. Value exclusive of excise duty. d. Date of supply of material.


205


Chapter-02

Q.19 Zero rated means duty of Federal excise levied and charged at the rate of _____________________ under section 5 of this Act, a. 10 per cent b. 20 per cent c. Zero per cent d. None Q.20 Duty shall be levied and collected in such manner as may be prescribed duties of excise on, ___________________________ a. Goods produced or manufactured in Pakistan b. Goods imported into Pakistan c. Services provided in Pakistan including the services originated outside but rendered in Pakistan d. All of above Q.21 Duty shall be levied and collected in such manner as may be prescribed duties of excise on goods at the rate of ________________________ per cent a. 10 b. 15 c. 20 d. Zero Q.22 Duty u/s 3(2) in respect of goods imported into Pakistan shall be levied and collected in the same manner and at the same time as if it were a duty of customs payable under the customers Act, 1969 and the provisions of the said Act including section ___________________ thereof shall apply a. 31C b. 31B c. 31A d. All of these Q.23 The Board may, by notification in the official Gazette, in lieu of levying and collecting duties of excise on goods and services, as the case may be, levy and collect duties on the ______________________________ of plants, machinery, undertakings, establishments or installations producing or manufacturing such goods. a. Manufacturing capacity b. Sale capacity c. Production capacity d. All of these Q.24 Without prejudice to other provision of this Act, the Federal Government may levy and collect duty on any class or classes or goods or services by


206


Chapter-02

notification in the official Gazette at such _________________________ or rates as may be specified in such notification. a. Higher rate b. Lower rate c. Higher or lower rate d. All of these Q.25 The liability to pay duty shall be in case of goods produced or manufactured in Pakistan, of the person _______________________ such goods. a. Manufacturing b. Selling c. Purchasing d. None Q.26 The liability to pay duty shall be in case of goods imported into Pakistan, of the person ________________ such goods. a. Manufacturing b. Selling c. Importing d. None Q.27 The liability to pay duty shall be in case of services, where services are rendered by the person out of Pakistan, the ___________________________ of such services in Pakistan shall be liable to pay duty. a. Seller b. Provider c. Liaison d. Recipient Q.28 The liability to pay duty shall being case of goods produced or manufactured in non-tariff areas and brought to tariff areas for sale or consumption therein, of the person __________________ such goods to tariff areas. a. Bringing or causing to bring b. Manufacturing c. Selling d. Importing Q.29 The Board may, by notification in the official Gazette, specify goods in respect of which a copy of the ________________________ shall be carried or accompanied with the conveyance during their transportation or movement in such manner and subject to such conditions as may be specified in this behalf either in such notification or otherwise. a. Sale invoice


207


Chapter-02

b. Purchase invoice c. Receipt d. None Q.30 For every ___________________________, a registered person shall furnish not later than the due date a true and correct return in such manner and form as may be prescribed by the Board by notification in the official Gazette. a. Year b. 6month c. 3month d. 1month Q.31 Duty due for the dutiable supplies made of services rendered during a month shall be deposited by the registered person in the designated branch of the ____________________ at the time of filing of his return. a. FBR b. Bank c. Custom office d. All of these Q.32 The Board may, _____________________ in the official Gazette, specify such modified invoices for different persons of classes of persons at it may deem necessary. a. By notification. b. Without notification c. By verbal cause d. All of these Q.33 A registered person may, subject to approval of the Collector of Federal Excise having jurisdiction, file a revised return within ______________________ days of the filing of return, to correct any omission or wrong declaration made therein. a. 90 b. 100 c. 120 d. 150 Q.34 Notwithstanding the provisions of section 3, the goods exported out of Pakistan or such goods as may be, by a notification in the official Gazette, specified by the Federal Government shall be charged to duty at the rate of __________________ per cent a. Zero b. 1 c. 2


208


Chapter-02

d. 5 Q.35 For the purpose of determining net liability of duty in respect of any goods, the duty already paid on goods specified in the First Schedule and used directly as input goods for the manufacture or production of such goods shall ______________________ the amount of duty calculated on such goods. a. Be deducted from b. Added to c. Exempted to d. None Q.36 In case of goods specified in the Second Schedule or such services as may be specified by the Board through a notification in the official Gazette the duty shall be payable in sales tax mode, whereby a registered person manufacturing or producing such goods or providing or rendering such services shall be entitled to _______________________ input tax paid during the tax period from the amount of duty of excise due from him on such goods or services in respect of that tax period. a. Add b. Deduct c. Double d. Any of a b c Q.37 In case of goods specified in the second schedule or such services as may be specified by the Board through a notification in the official Gazette the duty shall be payable in sales tax mode, whereby a registered person shall be entitled to deduct the amount of duty of excise paid or payable by him on such paid or payable by him on such goods or services as are acquired by him during a ___________________________ period from the output tax due from him in respect of that tax period. a. One month b. Two months c. Three months d. Tax Q.38 In case of goods specified in the Second Schedule of such services as may be specified by the Board through a notification in the official Gazette the duty shall be payable in sales tax mode, whereby a ______________________ person supplying such goods or providing or rendering such services shall be entitled to deduct duty of excise pad or payable on such goods or services as are acquired by him during the tax period from the amount of duty goods manufactured or produced or services as are provided or rendered by him during that period. a. Registered


209


Chapter-02

b. Common c. Both a & b d. None Q.39 If a person does not pay the duty due or any part thereof within the prescribed time or receives a refund of duty or drawback or makes an adjustment which is not admissible to him, he shall, in addition to the duty due, pay default surcharge at the rate of ______________________ of the duty due. Refund of duty of drawback. a. 3 % b. 4 % c. 5 % d. “ KIBOR plus three per cent” Q.40 The period of default shall be reckoned from the date following the due date on which the duty was payable to the _______________________ day on which the duty is actually paid. a. Next b. Preceding c. Following d. None Q.41 Notwithstanding anything contained in any other law for the time being in force, where any private company or business enterprise is closed or discontinued or otherwise ceases to exist and any amount of duty chargeable on the company or business enterprise, whether before, or in the course of, or after its liquidation cannot be recovered from the company or business enterprise, every person who was a owner or, or partner in, or director of, the company or business enterprise shall, jointly and severally with such persons, _______________________ for the payment of such duty. a. Be liable b. Not liable c. Can be liable d. None Q.42 In the case of sale of transfer of ownership of a business or part thereof involving any charge of duty to another person as an ongoing concern, the chargeable duty shall be paid by the person to whom such sale is made or ownership is transferred provided that if any amount of duty payable by such person remains unpaid, such unpaid amount of duty shall be the _______________________ charge on the assets of the business and shall be payable by the transferee of business a. First b. Last c. Full


210


Chapter-02

d. None Q.43 No business enterprise of a part thereof shall be sold or transferred unless the ___________________ duty is paid and a no objection certificate in this behalf from the collector concerned is obtained. a. Previous b. Full c. Outstanding d. All of these Q.44 In case of _________________________ or part thereof involving any outstanding charge of duty, a person terminating such business or part thereof shall be required to account for and pay the outstanding charge of duty as if no such termination has taken place. a. Continuation of a business b. Termination of a business c. Sale of a business d. None Q.45 The value and the rate of duty applicable to any goods or services shall be the value, retail price, tariff value and the rate of duty in force _________________________ a. In the case of goods, on the date on which the goods are supplies for export of for home consumption; b. In the case of services, on the date on which the services are provided or rendered; and c. In the case of goods produced or manufactured outside the areas to which this Act has been applied and brought to such areas for sale d. All of the above Q.46 Every person who for any reason whatever has collected or collects any duty, which is not payable as duty or which is in excess of the duty actually payable and the incidence of which has been passed on to the consumer, shall pay the amount so collected to the Federal Government and all the provisions of this Act or rules made there under shall apply for the recovery of such amount and claim for __________________ or any such amount paid or recovered shall not be admissible on any ground whatever. a. Recovery b. Reimbursement c. Refund d. None Q.47 Where any goods are liable to duty under the Act at a rate dependent on their value, duty shall be assessed and paid on the basis of value as


211


Chapter-02

determined in accordance with sub-section ________________________ of section 2 of the sales Tax Act, 1990, excluding the amount of duty payable thereon. a. (41) b. (43) c. (45) d. (46) Q.48 Where any services are liable to duty under this Act at a rate dependent on the charges therefore, the duty shall be paid on ________________________ amount of charges for the services including the ancillary facilities or utilities, if any, irrespective whether such services have been rendered or provided on payment of charge or free of charge or on any confessional basis. a. Total b. Half c. One-third d. None Q.49 Where any goods are chargeable to duty at the import stage, duty will be assessed and paid on the value determined in accordance with _______________________ of the customs Act, 1969, including customs duties payable thereon. a. Section 21 b. Section 25 c. Section 27 d. Section 29 Q.50 Where any good is chargeable to a duty on the basis of retail price, duty thereon shall be paid on the retail price fixed by the manufacture, inclusive of all duties, charges and taxes, other than sales tax levied and collected under ______________________ of the Sales Tax Act, 1990, at Which any particular brand or variety of such goods should be sold to the general body of consumers or, if more than one such price is so fixed for the same brand or variety, the highest of such price and such retail price shall, unless otherwise directed by the Board, be legibly, prominently and indelibly indicated on each good, packet, container, package, cover or label of such goods. a. Section 1 b. Section 2 c. Section 3 d. Section 4


212


Chapter-02

Q.51 The Board may fix the ______________________ price, of any goods or class of goods, for the purpose of levying and collecting of duty and duty on such goods shall be paid accordingly a. Maximum b. Full c. Minimum d. None Q.52 Where the price at which the goods or class or goods are sold, is higher than the price fixed by the Board, the duty shall, unless otherwise directed by the Board, be levied and collected at such ___________________________ price. a. Fixed b. Lower c. Higher d. None Q.53 Any person engaged in the production or manufacture of goods or providing or rendering services liable to duty of excise under the Act, shall, unless otherwise specified, be required to obtain registration in the prescribed manner regardless of his __________________ or volume of sales of such goods of services. a. Monthly turnover b. Bi annual turnover c. Annual turnover d. All of these Q.54 Where a person who is already registered under the Sales Tax Act, 1990, ___________________ be required to take separate registration for excise purpose and his sales tax registration shall be deemed to be a registration for the purpose of this Act, a. Shall not b. Shall c. In some cases d. None Q.55 Provisions of the sales Tax Act, 1990, including those relating to exemption threshold shall not apply where a person obtains or is liable to obtain registration for the purposes of this Act but does not have or __________________ to, registration under the Sales Tax Act, 1990. a. Is liable b. Is not liable c. Either a or b d. None


213


Chapter-02

Q.56 Where any person has not levied or paid any duty or has short levied or short paid such duty or where any amount or duty has been refunded erroneously, such person shall be serviced with notice requiring him to show cause for payment of such duty provided that such notice shall be issued within ________________________ from the relevant date. a. Three years b. Two years c. Four years d. Five years Q.57 The Federal Excise Officer, empowered in this behalf, shall after considering the objections of the person served with a notice determine the amount of duty payable by him and such person shall pay the amount so determined along with ______________________ as specified by such officer under the provisions of this Act. a. default surcharge b. penalty c. default surcharge or penalty d. default surcharge and penalty Q.58 Where any amount of duty levied and penalty imposed or any other amount payable under this Act is due from any person, such amount or sum shall be recovered in ___________________ as is prescribed under this Act of rules made there under. a. Different manner b. Same manner c. No manner d. None Q.59 a. b. c. d.

Express ion relevant date means _____________________ The date on which the payment of duty was due In case where any amount of duty has been erroneously refunded The date of its refund All of these

Q.60 A registered person pays the amount of duty less than the duty due as indicated in his return, the short paid amount of duty along with default surcharge shall be recovered from such person by stopping ___________________________ of any goods from his business premises and through attachment of his business bank accounts without prejudice to any other action under this Act or the rules made there under. a. Removal b. Attachment c. Sale d. None


214


Chapter-02

Q.61 _________________________________ penalty under this Act or rule made there under shall be imposed unless a show cause notice is given to Defaulter. a. Full b. Half c. No d. None Q.62 Federal Government may, by notification in the official Gazette, declare that may or all or the provisions of the customs Act, 1969 shall, with such modifications and alterations it may specify, consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties levied by section 3 and ______________________________. a. 2 b. 4 c. 6 d. 8 Q.63 All goods ______________________ in Pakistan and services provided or rendered except such goods and services as are specified in the First Schedule shall be exempt from whole of excise duties. a. Imported b. Produced c. Manufactured d. All of these Q.64 Goods and services specified in the __________________________ shall be exempt from duty subject to such conditions and restrictions, if any, specified therein and no adjustment I terms of section 6 shall be admissible in respect of goods exempt from duty of excise whether conditionally or otherwise. a. 1st Schedule b. 2nd Schedule c. 3rd Schedule d. 4th schedule Q.65 The Federal Government may be notification in the official Gazette, exempt subject to such conditions as may be specified therein, any goods or class or goods or any services or class of service from the ______________________ part of the duty leviable under this Act, a. Whole b. Whole or any


215


Chapter-02

c. Any d. None Q.66 Federal Government of the Board may, by a notification in the official Gazette, for reasons to be recorded, exempt any person or class or persons from payment of the whole or part of the default surcharge imposed under __________________ subject to the such conditions of limitations as may be specified in such notification. a. Section 18 b. Section 8 c. Section 82 d. Section 83 Q.67 Every person registered for purposes of this Act shall maintain and keep for a period of _____________________ at his business premises or registered office in English or Urdu language the following records of excisable goods purchased, manufactured and cleared (including those cleared without payment of excise duty) by him or by his agent acing on his behalf in such from and manner as would permit ready ascertainment of his liability of duty. a. 1 b. 2 c. 3 d. 5 Q.68 Records of clearance and sales made indicating the description, quantity and value of goods, name and address of the person to whom ___________________ made and the amount of the duty charged. a. Sales were b. Purchase were c. Invoice were d. None Q.69 A person registered under this Act shall issue for each transaction a serially numbered invoice at the time of clearance or sale or goods, including goods chargeable to duty at the rate of zero per cent, or providing or rendering services containing the following particulars. i. Name, address and registration number of the seller ii. Name, address and registration number of the buyer iii. Date of issue of the invoice. a. I only b. II & III c. I, II & III d. None


216


Chapter-02

Q.70 Where a registered person is also under the ______________________, such person shall not be required to issue a separate invoice for excise purposes and the amount of excise duty and other related information may in such cases be mentioned on the invoice issued for sales tax purposes. a. Sales Tax Act, 1989 b. Sales Tax Act, 1990 c. Sales Tax Act, 1991 d. None


217


Chapter-02

ANSWERS 1

(d)

2

(a)

3

(c)

4

(a)

5

(a)

6

(b)

7

(d)

8

(a)

9

(c)

10

(b)

11

(b)

12

(a)

13

(a)

14

(c)

15

(d)

16

(b)

17

(c)

18

(d)

19

(c)

20

(d)

21

(d)

22

(c)

23

(c)

24

(c)

25

(a)

26

(c)

27

(d)

28

(a)

29

(a)

30

(b)

31

(b)

32

(a)

33

(c)

34

(a)

35

(a)

36

(b)

37

(d)

38

(a)

39

(d)

40

(b)

41

(a)

42

(a)

43

(c)

44

(b)

45

(d)

46

(c)

47

(d)

48

(a)

49

(b)

50

(c)

51

(c)

52

(c)

53

(c)

54

(a)

55

(b)

56

(a)

57

(d)

58

(b)

59

(d)

60

(a)

61

(c)

62

(d)

63

(d)

64

(c)

65

(b)

66

(b)

67

(d)

68

(a)

69

(c)

70

(b)


218

OFFENCES AND PENALTIES

Chapter-03

MULTIPLE CHOICE QUESTIONS 1. The Federal Government may appoint more than one Special Judge and that Special Judge shall be a person who is or has been or is qualified to be a ________. a. Sessions Judge. b. Supreme Court Judge. c. Chief Commissioner. d. High Court Judge. 2. Provisions relating to trial of offences by Special Judge are described in section ________ of The Federal Excise Act, 2005. a. 21. b. 12. c. 211. d. 2. 3. The officer of Inland Revenue empowered to hold inquiry under section 22 of The Federal Excise Act, 2005 shall maintain a register to be called "Register of Arrests and Detention" in the prescribed form in which he shall enter the following. a. Name and other particulars of every person arrested under this Act, together with the time and date of arrest, the details of the information received. b. Details of things, goods or documents, recovered from his custody, the name of the witnesses and the explanation. c. Such register or authenticated copies of its detailed entries. d. All of the above. 4. An appeal against the order of a special Judge in respect of the trial of offence shall lie to the respective High Court of the Province within ________of the passing of the order and it shall be heard as an appeal under the Code of Criminal Procedure 1898 by a single judge of High Court. a. Thirty days of the passing of the notice. b. Twenty days of before passing of the order. c. Thirty days of the passing of the order. d. Sixty days of the passing of the order.


219


Chapter-03

5. Provisions relating to power to arrest and prosecute are mentioned in section ________ of The Federal Excise Act, 2005. a. 42 b. 22 c. 12 d. 32 6. Where an offence under this Act or rules made there under has been committed by a company, firm, or other body of persons, any person who at the time of the commission of the offence was a ______________________________ of the company, firm, or other body of person s or was purporting to act in that capacity shall be deemed to be guilty of that offence unless he proves that the offence was committed without his consent or connivance and that the exercised all such diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his functions in that capacity and to all the circumstances. a. Director b. Manager c. A partner d. All of these 7. The Federal Government may, by notification in the official Gezette, appoint as many special __________________________ as it may consider necessary, and, where it appoints more than one special judge, shall specify in the notification the territorial limits within which each one of them shall exercise jurisdiction. a. Judges b. Officers c. Officials d. All of these 8. A special judge shall be a person who is or has been or is qualified to be a __________________ judge. a. Sessions b. Chief c. Civil d. None 9. On the appointment of a Special judge for any area, an offence punishable under this Act shall be tried exclusively by the special judge and all cases pending in any other court in such area immediately before such


220


Chapter-03

appointment shall stand _________________________ to such special judge. a. Appointed b. Nominated c. Transferred d. None 10. The provisions of the Code of Criminal procedure __________________________, shall apply to the court of a special judge and, for the purposes of the said provisions, the court of a special judge shall be deemed to be a court of session trying cases, and a person conducting prosecution before the court of a special judge shall be deemed to be a public prosecutor. a. 1899 b. 1898 c. 1987 d. 1896 11. The code of Criminal Procedure, 1898 shall have effect as if an offence punishable under this Act were one of the offences referred to in subsection (1) of _____________________ of the Code. a. Section 331 b. Section 334 c. Section 336 d. Section 337 12. The provisions of Chapter XX of the code of criminal procedure, 1898, shall apply to trial of cases under this Act in so far as they are ______________________ with the provision of this Act. a. Inconsistent b. Not inconsistent c. In accordance d. All of these 13. The Federal Government may, by order in writing, direct the transfer at any stage of the trial, of any case from the court of one ______________________ to the court of another Special judge for disposal, whenever it appears to the Federal Government that such transfer will promote the ends of justice or tend to the general convenience of parties or witnesses. a. Special judge b. Chief judge c. Civil judge d. Special


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Chapter-03

14. In respect of a case transferred to a special judge, such judge shall not, by reason of the said transfer, _______________________ to recall and rehear any witness who has given evidence in the case before the transfer and may act on the evidence already recorded by or produced before the court which tried the case before the transfer. a. Not bound b. May be bound c. Be bound d. None 15. Any Federal Excise officer authorized by the Board in this behalf who has reason to believe that any person has committed an offence under this Act may arrest such person after obtaining permission in writing from the ___________________________ concerned. a. Commissioner b. Collector c. Additional Collector d. None 16. _______________________ shall immediately intimate the fact of the arrest of a person to the Special Judge who may direct such officer to produce that person at such time and place and on such date as the Special judge considers expedient and such officer shall act accordingly. a. Collector b. Commissioner c. Federal Excise Officer d. All of these 17. Any person arrested under this Act shall be produced before the special judge or, if there is no special judge within a reasonable distance, to the nearest judicial Magistrate, within ________________________ hours of such arrest, excluding the time necessary for the journey from the place of arrest to the court of the special judge or, as the case may be , of such Magistrate. a. 12 b. 16 c. 18 d. 24 18. When any person is produced before the _________________________ he may, on the request of such person, after perusing the record, if any, and after giving the prosecution an opportunity of being heard, admit him to bail on his executing a bond, with or without sureties, or refuse to admit him to bail and direct his detention at such place as he deems fit. a. Magistrate QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

222


Chapter-03

b. Collector c. Special judge d. None 19. Special judge from canceling the bail of any such person at a subsequent stage if, for any reason, he considers such cancellation necessary, but before passing such order he shall afford such person an opportunity of being _____________________, unless for reason to be recorded the considers that the affording of such opportunity shall defeat the purposes of the Act, a. Heard b. Appealed c. Writ d. All of these 20. Special judge or the Magistrate from remanding any such person to the custody of the Federal Excise Officer holding inquiry against the person if such officer makes a request in writing, to that effect and the special judge or the judicial Magistrate, after perusing the record, if any, and hearing such person, is of the opinion that for the completion of inquiry or investigation it is necessary to make such an order, provided that in no case the period of such custody shall exceed _____________________________ days. a. 10 b. 14 c. 15 d. None 21. When any person is arrested under this Act, the Federal Excise Officer shall record the fact of arrest and other relevant particulars in the register shall immediately proceed to inquire into the charge against such person and if he completes the inquiry within ___________________ hours of his arrest, excluding the time necessary for journey as aforesaid, he may, after producing such person before the special judge or the nearest judicial Magistrate make a request for he further detention in the custody. a. 12 b. 14 c. 24 d. 36 22. Federal Excise Officer shall exercise the __________________________ powers as are exercisable by an officer in charge of a police-station under the Code of Criminal Procedure, 1898 (Act V of 1898), but such officer shall exercise such power subject to the foregoing provisions of this section while holding and inquiry under this Act, QUESTION BANK FOR THE POST OF INSPECTOR INLAND REVENUE BY FBR BY NADEEM BUTT (FCA)

223


a. b. c. d.

Chapter-03

Same Excess Different None

23. If a Federal Excise Officer, after holding an inquiry, is of the opinion that there is no sufficient evidence or reasonable grounds to proceed against a person he shall make a report to his effect to the ______________________________ and with his approval may release him on his executing a bond with or without sureties and shall direct such person to appear, as and when required, before the Special judge and may make a report to the special judge for the discharge of such person and shall make a full report of the case of his immediate superior. a. Judge b. Magistrate c. Commissioner d. All of these 24. . ____________________________ to whom a report has been the inquiry and hearing the prosecution, agree with such report and discharge the accused or, if he is of the opinion that there is sufficient ground for proceeding against such person, proceed with his trial and direct the prosecution to produce evidence. a. Special judge b. Magistrate c. Collector d. All to these 25. The Federal Excise Officer empowered to hold inquiry under this section shall maintain a register to be called ______________________ a. Register of Arrests b. Register Detention c. Register of Arrests and Detention d. None 26. After completing the inquiry, the Federal Excise Officer shall, as early as possible, submit to the ___________________________ a complaint in the same form and manner, in which the officer in charge of a police-station submits a report before a court. a. Special judge b. Magistrate c. Collector d. All of these


224


Chapter-03

27. Any Magistrate of the first class may record any statement or confession during inquiry under this Act, in accordance with the provisions of ________________________________ of the Code of Criminal procedure, 1898. a. Section 64 b. Section 164 c. Section 264 d. None 28. Without prejudice of the foregoing provision of this section, the Federal Government may, by notification in the ___________________________, authorize any other officer working under the Board to exercise the powers and perform the functions of a Federal Excise Officer under this section subject to such conditions, If any that it may deem fit to impose. a. Newspaper b. Official Gazette c. No where d. None 29. Any person has committed an offence liable to penalty of punishment under this Act, the ________________________ may, either before or after the initiation of any proceeding for the recovery of duty or prosecution of such person, compound the offence if he pays the amount of duty along with such default surcharge and penalty as is determined under the provisions of this Act. a. Special judge b. Magistrate c. Commissioner d. None 30. Any Federal Excise Officer duty empowered by the Board in this behalf shall have power to summon any person whose ________________________________ he considers necessary either to give evidence or to produce a document or any other thing or information in any inquiry which such officer is making for any of the purposes of this Act. a. Attendance b. Arrest c. Punishment d. All of these


225


Chapter-03

31. All persons so summoned __________________________ to attend, either in person of by an authorized agent, as such officer may direct, and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined to make statements and to produce such documents and other things as may be required. a. Shall not be bound b. Shall be bound c. Can be bound d. None


226


Chapter-03

ANSWERS 1

(a)

2

(a)

3

(d)

4

(c)

5

(b)

6

(d)

7

(a)

8

(a)

9

(c)

10

(b)

11

(d)

12

(b)

13

(a)

14

(a)

15

(a)

16

(c)

17

(d)

18

(c)

19

(a)

20

(b)

21

(c)

22

(a)

23

(c)

24

(a)

25

(c)

26

(a)

27

(b)

28

(b)

29

(c)

30

(b)

31

(b)


227

SEARCHES, ARRESTS AND SEIZURES

Chapter-04


The purpose of section 26, ‘conveyance’ shall include all,____________. a. Fixture and Fitting b. Accessories c. (a) and (b) Both d. None

2.

In case of cigarettes seized on account of evasion of duty, the owner shall be given an option to pay _____________ a. pay penalties and fines b. Default surcharge c. Relaxation d. All of above

3.

In respect of cases pending before the Special Judge, release of conveyance shall not be allowed without prior permission of the _____________. a. Commissioner Inland Revenue b. Chief Commissioner of Inland Revenue c. Special Judge d. Appellate Tribunal Authority

4.

All searches or arrests made under FED or any rules made there under and shall be carried out in accordance with the relevant provisions of the Code of Criminal procedure, 1989 _____________________________. a. b. c. d.

5.

The counterfeited cigarettes or cigarettes which have been manufactured ___________________ or on which duty has not been paid as required under this Act and rules made there under, shall be liable to seizure besides the conveyance which has been used for the movement, carriage or transportation of such cigarettes a. b. c. d.

6.

(VII of 1989) (VI of 1898) (V of 1989) (IV of 1989)

Unlawfully Hidden Illegally None

On furnishing a guarantee by the owner of the seized conveyance, from a scheduled bank valid for at least _____________________________.


228


a. b. c. d. 7.

Section 29 Section 39 Section 19 Section 119

In case of cigarettes seized on account of evasion of duty, the owner shall be given and option to pay penalties and fines as provided under section 19 and meet other obligations as provided under other relevant provisions of the Act and rules made there under, for release of such cigarettes in lieu of confiscation provided that if such release is not claimed or availed, no reduction or abatement in respect of amounts of duty, ____________________ shall be admissible in case such cigarettes are auctioned. a. b. c. d.

9.

Half year 2 year One year 3 years

The cigarettes seized for the reasons of counterfeiting shall be liable to outright confiscation and shall be destroyed in the manner prescribed in sub-section (10) of ___________________. a. b. c. d.

8.

Chapter-04

Penalties Fine Penalties and fine None

In case confiscated cigarettes are rendered unfit for human consumption or become otherwise unfit for sale, the __________________________ may allow destruction of such cigarettes in such manner as he may deem appropriate. a. b. c. d.

Taxation Officer Collector Inspector of Inland Revenue None


229


10.

Chapter-04

Where any conveyance is seized which is liable to ______________________ the adjudicating authority may, subject to such conditions as may be prescribed, order its release pending adjudication of the case. a. b. c. d.

Confiscation Destruction Sale None


230


Chapter-04

ANSWERS 1

(c)

2

(a)

3

(c)

4

(c)

5

(a)

6

(c)

7

(c)

8

(c)

9

(b)

10

(a)


231


Chapter-05


For the purposes of this Act and rules made there under, the Board may, by notification in the official Gazette, appoint, in relation to any area or jurisdiction specified in the notification, any person to be – a. A collector of Federal Excise b. A collector of Federal Excise (Appeals) c. An Additional collector of Federal Excise d. All of these

2.

Notwithstanding the other designations of the officers of Federal Excise used in this Act or the rules made there under the Directorate ____________________________ shall consist of a Director General and a many Directors, Additional Directors, Deputy Directors and Assistant Directors and other officers with any other designation as the Board may appoint by notification in the official Gazette. a. General (Intelligence) b. General (Investigation) c. General (Intelligence & Investigation) d. None

3.

The Directorate General ________________________ shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors and Assistant Directors and other officers with any other designation as the Board may appoint by notification in the official Gazette. a. External Audit b. Annual Audit c. Internal Audit d. None

4.

The Directorate General of Training & Research shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors and Assistant Directors and other officers with any other designation as the Board may appoint by notification in the official Gazette, Substituted vide Finance Act, __________________________ a. 2001 b. 2003 c. 2005 d. 2007

5.

The board may, by notification in the official Gazette and subject to such limitations or conditions as may be specified therein, empower by name or designation _______________________


232


a. b.

c. d.

Chapter-05

Any Additional collector of Federal Excise or Deputy Collector of Federal Excise to exercise any of the powers of a Collector of Federal Excise; Any Deputy Collector of Federal Excise of Assistant Collector of Federal Excise of exercise any of the powers of an Additional Collector of Federal Excise; Any Assistant Collector of Federal Excise to exercise and of the powers of a Deputy Collector of Federal Excise; and All of these

6.

Unless the Board in any case otherwise directs, the collector may with the prior approval of the _____________________ authorize any officer subordinate to him to exercise within any specified area, any of the powers of the collector or of any other officer of Federal Excise under this Act. a. Collector b. Board c. Both a & b d. All of these

7.

The officer to whom any powers of any senior officer are delegated ___________________ further delegate such powers. a. Shall b. Can c. Shall not d. None

8.

An officer appointed under the Act shall exercise such powers and discharge such duties as are conferred or imposed on him under this Act and he shall also be competent to exercise all powers and discharge all duties of functions conferred or imposed upon any officer ___________________________ to him. a. Subordinate b. Senior c. Equal in Rank d. None

9.

Notwithstanding anything contained in this Act or the rules made there under, the Board may, be general of special order, impose such limitations or conditions on the exercise of such powers and discharge of such duties by any ___________________________ as it deems fit. a. Official b. Provincial officer c. Person d. Federal excise officer


233


10.

Any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding ________________________ days shall be excluded for the computation of these periods. a. 30 b. 40 c. 50 d. 60

11.

Board shall ___________________________ powers to regulate the system of adjudication including transfer of cases and extension of time limit in exceptional circumstances a. Have b. Have not c. Don’t have concern d. Have

12.

Adjudication time in all the cases pending as on __________________________ June, 2006, shall be deemed always to have been extended up to 31st December, 2006, from the date on which the time limit prescribed under sub-section (3), expires, a. 20th b. 24th c. 25th d. 30th

13.

Wherever confiscation is adjudged under this Act of the rules made may give the _________________ of the conveyance an option to pay in lieu of confiscation such fine as the officer thinks fit. a. Owner b. Seller c. Liaison d. None

14.

Any person other than Federal Excise officer aggrieved by any decision or order passed under this Act or the rules made there under by a Federal Excise Officer up to the rank of Additional Collector of Federal excise, other than a decision or order or notice given or action taken for recovery of the arrears of duty under this Act or rules made there under may within ___________________________ days of receipt of such decision or order prefer appeal there from to the collector (Appeals) a. 15 b. 20 c. 30


Chapter-05

234


d.

Chapter-05

45

15.

______________________ (Appeal) may, after giving both parties to the appeal an opportunity of being heard. a. The collector b. The Commissioner c. The Assistant Collector d. All of these

16.

Order shall be passed not later than _______________________ days from the date of filing of appeal or within such extended period, not exceeding “sixty” days a. 100 b. 120 c. 150 d. 180

17.

Commissioner (appeals) may, for reasons to be recorded in writing, extend provided further that any period during which the proceeding are adjourned on account of stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding ______________________ days shall be excluded for the computation of these period a. 20 b. 25 c. 30 d. None

18.

A trustee for a bankrupt shall, within _________________________ months of being notified under sub-section (1), notify the liquidator, Commissioner, in writing, of the amount which appears of the collector to be sufficient to provide for any sales tax which is or will become payable be the person whose assets are in the possession of the liquidator. a. 1 b. 3 c. 5 d. None

19.

A ________________________ shall not, without leave of the collector, part with any asset held as liquidator until the liquidator has been notified under sub-section (2). a. Liquidator b. Trustee c. Owner


235


d.

Chapter-05

All of these

20.

The Board make rules for carrying out the purposes of this Act including rules for charging fee for processing ________________________ and other documents and for preparation of copies thereof. a. Return b. Claims c. Both a & b d. None

21.

All rules the Act, shall be collected, arranged and published along with general Orders and departmental instructions and rulings, if any, at appropriate intervals and sold to the _______________________ at reasonable price. a. Public b. Department c. Market d. None

22.

The Board can use _______________________ system for carrying out the purposes of this Act, including the receipt of Applications for registration, returns and such other declarations, There under from such date and for such registered persons or class of persons as the Bard may, by notification in the official Gazette, specify. a. Computerized b. Manual c. Either a OR b d. None

23.

For regulating the conduct and transaction of business in relation to the submission of returns of other information to the Board by the persons required to transmit or receive any information through the computerized system, including matters such as grant of __________________________ of authorization and for security of the information transmitted or received through the computerized system. a. Authorization b. Suspension c. Cancellation d. All of these

24.

Unless otherwise proved, the information received in the computerized system from or on behalf of any registered person shall, for all _____________________ purposes, be deemed to have been furnished by and received from such registered person.


236


a. b. c. d.

Chapter-05

Official and legal Official Legal None

25.

The business information gathered through computerized system shall be ______________________ to be used only for official and legal purpose no unauthorized person shall claim for any access to such information. a. Public b. Legal c. Proper d. Confidential

26.

In Civil court to _____________________________ any order passed, No Suit to any assessment made, any tax levied, any penalty imposed or collection of any tax made under this Act. a. Modify b. Change c. Alter d. All of these

27.

A registered person required to appear before the Appellate Tribunal or an officer of Inland Revenue in connection with any proceedings under this Act may, in _______________________ authorize any person 1[have such qualification as may be prescribed] to represent him or appear on his behalf. a. Oral b. Verbally c. Writing d. All of these

28.

The Board may, by a notification in person to electronically file return under ____________________ and such other documents electronically, as may be prescribed from time to time, on behalf a person registered under section 14 a. Chapter IV b. Chapter V c. Chapter VI d. Chapter VII

29.

A person registered under section _________________________ may authorize an e-intermediary to electronically file return or any other documents. a. 10


237


b. c. d.

Chapter-05

12 13 14

30.

The return filed by an e-intermediary on behalf of a registered person shall be deemed to have been filed by the _________________________ person. a. Depositing b. Actual c. Registered d. None

31.

Where an e-intermediary, knowingly of wilfully submits a false or incorrect information or document or declaration with an intent to avoid payment of tax due or any pert thereof or claiming a tax credit or a refund that is not due to the registered person, such e-intermediary _______________________ jointly and severally responsible for recovery of the amount of tax short paid or the amount refunded in excess a. Shall be b. Shalln’t be c. In Some Cases d. All of these

32.

If a registered person is declared bankrupt, the Duty liability under this Act shall pass on to the estate in bankruptcy if it __________________________ to operate the business. a. Discontinue b. Continue c. In some cases continue Or Discontinue d. None

33.

If tax liability is incurred by an estate in bankruptcy, the tax is deemed to be a current expenditure in the operations of the estate in bankruptcy and shall be paid ___________________ the claims preferred by other creditors are settled. a. After b. At the Time of payment of c. Before d. None

34.

Clerical or arithmetical errors in any assessment, adjudication, order or decision may, at any time, be corrected by the officer of Custom and excise who _______________________the assessment or adjudication or passed such order or decision or by his successor in office


238


a. b. c. d.

Chapter-05

Checked Approved Made All of these

35.

The expression “representative in respect of a registered person, means _______________. a. Where the person is an individual under a legal disability, the guardian or manager who receives or is entitled to receive income on behalf, or for the benefit of the individual; b. Where the person is a company (other than a trust, a provincial Government, or local authority in Pakistan), a director or a manager or secretary or agent or accountant of any similar officer of the company; c. Where the person is a trust declared by a duly executed instrument in writing whether testamentary or otherwise, any trustee of the trust. d. All of these

36.

Where the person is a ____________, in Pakistan, any individual responsible for accounting for the receipt and payment of money or funds on behalf of the provincial Government. a. Local authority b. Provincial Govt. c. Federal Govt. d. None

37.

No person shall be declared as the representative of a non-resident person unless the person has been given nd opportunity by the ___________________________ of being heard. a. Deputy Commissioner b. Assistant Commissioner c. Commissioner d. Chief commissioner

38.

Any tax that, by virtue of is payable by a representative of a registered person shall be recoverable form the representative only to the extent of any assets of the registered person that are in the possession or under the control of the representative. a. 10 b. 8 c. 5 d. 4

39.

The tax paid on goods purchased by a person who is subsequently required to be registered under section _____________________________


239


Chapter-05

due to new liabilities or levies or gets voluntary registration under this Act or the a. 14 b. 16 c. 18 d. 20 40.

Where a person imports goods the Duty on goods paid by him thereon during a period a _________________________ days before making an application for registration shall be treated as an input tax subject to the condition that he holds the bill of entry relating to such goods. a. 60 b. 90 c. 120 d. 150

41.

When any goods which have been imported into Pakistan and on which tax has been paid on importation are re-exported outside Pakistan and such goods are capable of being identified, ___________________________ of such tax shall a. Five Fourth b. Three Fourth c. Seven Fourth d. Seven-eighth

42.

Board may, on sufficient cause being shown, in any case extend any period, by a further period of __________________________. a. Six months b. Nine months c. One year d. One and half year

43.

The repayment of sales tax as drawback in respect of goods which have been taken into use between importation and re-exportation shall be subject to such orders, conditions or limitations as may be passed or imposed by the Board in each case. a. Modifying the amount of tax which shall be repaid as drawback on any such goods or class of goods b. Prohibiting the repayment of tax as drawback on any such goods of class of goods c. Varying the condition for the grant of drawback on any such goods or class or such goods by restricting the period after importation within which the goods must be re-exported. d. All of these e. Any of a, b, or c


240


44.

Tax has not been charged in any area on any supply which was otherwise taxable, or according to the said practice the amount charged was _______________________ than the amount that should have actually been charged. a. Less b. Equal c. More d. None

45.

No refund of Duty claimed to have been paid or over paid through inadvertence, error or misconstruction or refund on account of input adjustment not claimed within the relevant tax period, shall be allowed, unless the claim is made within _______________________ of the date of payment a. 3 years b. Two years c. One year d. None

46.

In a case where the refund has become due on account of any decision or judgment of any officer of Inland Revenue of court of the Tribunal, the period of ______________________ shall be reckoned from the date of judgment or decision of such officer court of Tribunal. a. One year b. Two years c. Three d. Four

47.

The application or claim filed under this section shall be disposed of within a period not exceeding ___________________________ days from the date of filling of such application of claim. a. 30 b. 60 c. 90 d. 120

48.

There shall be paid to the claimant in addition to the amount of refund due to him, a further sum equal to KIBRO per ________________________ of the amount of refund due, from the date following the expiry of the time specified as aforesaid, to the day preceding the day of payment of refund. a. Annum b. Month c. Week


Chapter-05

241


d.

Chapter-05

None

49.

When any person is expressly or impliedly authorized by a registered person to be his agent for all or any of the purposes of this Act, the registered person _______________________ responsible for the act done by his agent a. Shalln’t be b. Shall be c. Can be d. May be

50.

An officer of Inland Revenue not below the rank of Assistant commissioner may, on payment of _________________________ Rupees issue an attested duplicate of any Inland Revenue document as is available with the department or has been filed under this Act or rules made there under to a relevant registered person applying for the same. a. 1000 b. 500 c. 300 d. 100

51.

Any decision of any court the trade enrolment Certificate Schemes immediately in force before the commencement of the finance Act, __________________________, shall be deemed to be validly made under this Act a. 1997 b. 1998 c. 1999 d. None


242


Chapter-05

ANSWERS 1

(d)

2

(c)

3

(c)

4

(d)

5

(d)

6

(b)

7

(c)

8

(a)

9

(d)

10

(a)

11

(a)

12

(d)

13

(a)

14

(c)

15

(b)

16

(b)

17

(c)

18

(b)

19

(a)

20

(c)

21

(a)

22

(a)

23

(d)

24

(a)

25

(d)

26

(d)

27

(c)

28

(b)

29

(d)

30

(c)

31

(a)

32

(b)

33

(c)

34

(c)

35

(d)

36

(b)

37

(c)

38

(c)

39

(a)

40

(d)

41

(d)

42

(d)

43

(e)

44

(a)

45

(c)

46

(a)

47

(c)

48

(a)

49

(b)

50

(d)

51

(c)


243

OTHER CHAPTERS OF INCOME ORDINANCE, 2001

FISCAL POLICY

Chapter-01


Taxes are levied to: a) Penalize people b) Provide direct benefits to tax payers c) Provide general benefits for the people d) To accumulate funds

2.

Whom of the following propounded principles of taxation: a) Keynes b) Marshall c) Adam Smith d) Al Ghazali

3.

Taxes on commodities are: a) Direct taxes b) Indirect taxes c) Progressive taxes d) Proportional taxes

4.

Govt. prepares its budget: a) A Weekly b) Monthly c) Quarterly d) Annually

5.

It is direct tax; a) Excise tax b) Sales tax c) Income tax d) Custom duty

6.

These are heads of expenditure of the government EXCEPT? a) Provide social services b) Defense c) Improve transport and communication d) Provide cosmetics'

7.

The most important source of income of a government is: a) Foreign loans b) Taxes c) Printing of new money d) Sale of government property

8.

Progressive taxes;


244

FISCAL POLICY

a) b) c) d)

Chapter-01

Increase government revenue Bring equality in distribution of incomes Act as penalty for rich people Both (a) & (b)

9.

These are principles of taxation: a) Principle of equality b) Principle of certainty c) Principle of secrecy d) Both (a) & (b)

10.

In Pakistan, taxes are levied by: a) Prime minister of Pakistan b) President of Pakistan c) Federal cabinet of ministers d) National assembly.

11.

Which of the following tax is best example of ability to pay principle of taxes; a) Excise tax on cigarettes b) Highway toll tax c) Proportional sales lax d) Personal income tax

12.

Govt. taxing and Spending policies are called: a) Monetary policy b) Fiscal policy c) Commercial policy d) Finance policy

13.

Govt. budget is balanced when: a) Govt. expenditure outstrips tax receipts b) Govt. tax receipts outstrips expenditure. c) Government expenditure equals tax revenue d) None of the above

14.

Government finance is called: a) National finance b) Public finance c) Private finance d) (a) and (b) of above

15.

How the government can meet its expenditure: a) By taxing people b) By borrowing from banks and other c) By printing new money d) By all the three methods


245

FISCAL POLICY

16.

The government can collect funds from: a) Taxes b) Fees c) Prices of public goods d) All the three

17.

A direct tax is that which: a) Is heavy burden on the tax payers b) Can be directly deposited in the banks c) Can not be evaded d) Is paid by the person on whom it is levied

18.

In Pakistan government budget is prepared by: a) National Assembly b) President of Pakistan c) Ministry of Finance d) State Bank of Pakistan

19.

In Pakistan Income tax, is: a) Progressive tax b) Proportional c) Direct d) (a) and ( b) of above

20.

Which tax better conforms to the principle of equality in taxation a) Progressive tax b) Regressive tax c) Proportional tax d) Fixed tax

21.

Which one is not a principle of taxation: a) Principle of equality b) Principle of certainty c) Principle of morality d) Principle of diversity

Chapter-01

22.

A country has proportional system of taxation. A person pays Rs 500 tax when his income is 5000, how much tax he will pay if his earning rises to 8000. a) 200 b) 400 c) 600 d) 800

23.

Which source a private company cannot use? a) bank loan


246

FISCAL POLICY

Chapter-01

b) bank overdraft c) Selling new shares in stock exchange d) All of the above 24.

Net taxes are: a) Domestic taxes minus foreign taxes b) Business taxes minus personal taxes c) Total taxes minus govt. transfer payments d) Total taxes minus govt. purchases

25.

Which is not counted as public expenditure'? a) Subsidy given to local city bus service b) Defence expenditure c) Investment spending by public companies d) Interest payment on national debt,

26.

If Income tax is assessed as Rs.. 100 on an income of Rs. 1000. Compared to this, which one of the following indicates that the income tax rate is progressive? a) Rs. 150 tax on Rs. 2000 income b) Rs. 350 tax on Rs. 3000 income c) Rs 400 tax on Rs. 4000 income d) Rs- 450 tax on Rs, 5000 income

27.

The most important source of income of a government is; a) Foreign loans b) Printing of new money c) Sale of government property d) Taxes

28.

Asif Software Co. imported computers and paid import tax. Burden of tax will be on: a) Importer b) Wholesaler c) Final consumer d) Retailer

29.

If a person who is tax-payer can shift the burden of tax to someone else. The tax is called: a) Moveable tax b) Indirect tax c) transfer tax d) Undesirable tax

30.

The federal budget of Pakistan includes: a) Direct taxes and indirect taxes b) Proportional and progressive taxes


247

FISCAL POLICY

Chapter-01

c) Simple and difficult taxes d) (a) &(b)of-above 31.

It is better way to finance the govt. budget: a) By taxing people b) By printing new money c) By borrowing from banks d) By fining people doing illegal activities

32.

Income tax in Pakistan is: a) Direct and progressive b) Direct and proportional c) Indirect and progressive d) Indirect and proportional

33.

In Pakistan, income tax is collected by: a) Local govt. b) Provincial govt. c) Federal govt. d) All governments

34.

Sales tax in Pakistan is: a) Direct and progressive b) Direct and proportional c) Indirect and progressive d) Indirect and proportional

35.

It is easy and convenient to pay; a) Direct tax b) Indirect tax c) Proportional tax d) Progressive tax

36.

It is difficult to evade: a) Direct tax b) Indirect c) Proportional d) Progressive tax

37.

It is a source of revenue for the Local Government bodies: a) Corporation tax b) Value added tax c) Excise duty d) Property tax

38.

Which tax is not shared between Federal and provincial governments?


248

FISCAL POLICY

a) b) c) d)

Chapter-01

Excise tax Sales tax Custom duty Property tax

39.

Which is provincial tax in Pakistan: a) Excise tax b) Sales tax on goods c) Import duty d) Motor cars token tax

40.

Tax is a payment: a) Compulsory b) Voluntary c) Unnecessary d) Temporary

41.

The main source of revenue of federal government is: a) Property taxes b) Token tax c) Custom duties d) Sales tax

42.

The budget estimate prepared by ministry of finance is finally approved by: a) State Bank b) President c) Senate d) National Assembly

43.

To control inflation the government should increase: a) Budget deficit b) Consumer spending c) Income tax d) Pensions

44.

In past decades Pakistan increased its GDP, yet living standard of majority has not risen. The most important cause of this situation is: a) Increased govt. expenditure b) Increased imports c) Increased education d) Increased population

45.

Which of the following should not be the aim of a government: a) Economic growth b) Full employment c) Inequality of incomes


249

FISCAL POLICY

Chapter-01

d) Pace stability 46.

Which of the following would cause incomes to become more unequal: a) Increased employment b) Increased unemployment allowance c) More progressive taxes d) More regressive taxes

47.

What is the benefit of tariffs: a) Increased choice b) Increased government revenue c) More competition d) More trade

48.

Pakistan's public debt is: a) Larger than GNP b) Approximately equal to GNP c) Smaller than GNP d) Smaller than our exports

49.

Pakistan's fiscal year starts from: a) 1st September b) 1st January c) 1st April d) 1st July

50.

Pakistan's Budget has parts: a) Current and development b) Revenue and expenditure c) Development and non-development d) Both (a) and (b)

51.

Federal government tax revenue collection includes: a) Divisible taxes with provinces b) Divisible taxes with district govt. c) Non-tax revenue d) All of the above

52.

Which is true: a) Federal govt. collects taxes and shares with provinces b) Govt. collects taxes and shares with federal govt. c) Federal govt. collects taxes and shares with local govt. d) Local govt. Collects, taxes and shares with federal govt.

53.

Which is true? a) Federal govt. has the right to collect taxes.


250

FISCAL POLICY

Chapter-01

b) Provincial govt. has the right to collect taxes. c) Local govt. has the right to collect taxes d) All of the above is true 54.

The most important body to collect taxes in Pakistan is: a) District govt. b) State Bank c) Ministry of finance d) FBR

55.

Which is true about amount of taxes collected in Pakistan? a) Direct taxes are more than indirect taxes. b) Indirect taxes are more than direct taxes c) Provincial taxes are more than federal d) Provincial govt. Share taxes with federal govt.

56.

Exemption limit for 0% income tax rate in Pakistan is: a) 10 lakh b) 5 lakh c) 4 lakh d) 1 lakh

57.

Rate of General Sates Tax (GST) is: a) 17% b) More than 10% but less than 20% c) More than 20% but less than 30% d) More than 30% but less than ''%

58.

The purpose of fiscal policy is to a) Alter the direction of the economy b) Change people's attitudes toward government c) Educate people as to the importance of economics d) Offer insight into the way things work

59.

Fiscal policy-is purposeful movements in designed to direct an Economy. a) Interest rates b) Legal structures c) Government regulations d) Government spending and taxes

60.

Replacement of a progressive income tax system with a single income tax rate would be an example of a) Nondiscretionary fiscal policy b) Discretionary fiscal policy c) Mandatory spending policy d) Interest rate policy


251

FISCAL POLICY

Chapter-01

ANSWERS 1

(c)

2

(c)

3

(b)

4

(d)

5

(c)

6

(d)

7

(b)

8

(d)

9

(d)

10

(d)

11

(d)

12

(b)

13

(c)

14

(b)

15

(d)

16

(d)

17

(d)

18

(c)

19

(d)

28

(a)

21

(c)

22

(d)

23

(c)

24

(c)

25

(c)

26

(b)

27

(d)

28

(c)

29

(b)

30

(d)

31

(a)

32

(a)

33

(c)

34

(d)

35

(b)

36

(a)

37

(d)

38

(d)

39

(d)

40

(a)

41

(d)

42

(b)

43

(c)

44

(d)

45

(c)

46

(d)

47

(b)

48

(c)

49

(d)

50

(d)

51

(a)

52

(a)

53

(d)

54

(d)

55

(b)

56

(c)

57

(a)

58

(a)

59

(d)

60

(b)


252

FUNCTION OF FBR

Chapter-02

MULTIPLE CHOICE QUESTIONS 1. When the central Board or Revenue has been converted to Federal Board or Revenue. (a) 2005 (b) 2006 (c) 2007 (d) 2008 2. When did the central Board of Revenue (CBR) was created? a) 1920 b) 1922 c) 1924 d) None 3. When did FBR was made an attached department of the Ministry of Finance? a) 1974 b) 1976 c) 1978 d) None 4. Executive head of the Board as well as secretary of the Revenue Division has the responsibility for (a) Formulation and administration of fiscal polices (b) Levy and collection of federal taxes (c) Quasi-judicial function of hearing of appeals (d) All of these 5. Which one is the major function of FBR Pakistan (a) Domestic Taxes (b) Sales tax (c) Federal excise Duty (d) All of these 6. FBR is not responsible for ______________________ the revenue for country. (a) Auditing (b) Enforcing (c) Collecting (d) Removing 7. FTN stands for ____________________ Tax Number (a) Full (b) Federal (c) Free (d) Bothe (b) or (c)


253

FUNCTION OF FBR

Chapter-02

8. NTN stands for _______________________ Tax Number (a) National (b) Notional (c) New (d) None 9. FBR Pakistan facilitate issuance of NTN/FTN to unregistered withholding agents in respective Regional Tax office through Pakistan _________________________ Automation Limited; (a) Regional (b) Revenue (c) Record (d) None 10. FBR monitors the certificates or exemption from withholding taxes, issued by concerned tax authorities for their proper _____________________ by all concerned. (a) Collection (b) Enforcement (c) Utilization (d) All of these 11. FBR can ___________________ in whole of Pakistan the withholding regime and other relevant provisions of the income tax ordinance, 2001 and sales Tax of 1990. (a) Check (b) Supervise (c) Ascertain (d) All of these 12. FBR has how many major wings? (a) 1 (b) 2 (c) 3 (d) 4 13. Which of the following is not the wing of FBR? (a) Inland revenue (b) Custom (c) Import export (d) None 14. Which include the powers of FBR? (a) Carrying out inquiries and audits/investigations into tax affairs (b) Commanding arrests


254

FUNCTION OF FBR

Chapter-02

(c) Attachment as well as public auction of movable and immovable assets of a noncompliant (d) All of these 15. Which of the following is the main tool of Fiscal Policy? (a) Taxes (b) Deficit financing (c) Subsidies (d) Transfer payments 16. Which of the following is the general formula for calculating tax credits under FBR? (a) (A / B) x C (b) (A + B ) x C (c) (A + B ) x C (d) None 17. Which of the following is tax, where the tax rate decreases as the amount to which the rate is applied increases? (a) Proportional tax (b) Progressive tax (c) Corporate tax (d) Regressive tax 18. Which one of the following is the general definition of tax in the rules FBR? (a) Compulsory contribution of wealth by persons (b) Optional contribution of wealth by persons (c) Compulsory contribution of wealth by state (d) Optional contribution of wealth by state 19. In Accordance with the FBR Functions, which of the following section deal with tax treatment of person who is a cultivator or receiver of agricultural produce as rent-in-kind in the business of cultivator? (a) Section 41 of the income Tax Ordinance 2001 (b) Rules 11 of the IT Rules 2002 (c) Section 40 of the Income Tax Ordinance 2002 (d) None 20. Under the functions of FBR 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


255

FUNCTION OF FBR

Chapter-02

21. Which part of income is charged to tax of non-resident person under FBR Rules? (a) Pakistani source of income (b) Foreign source of income (c) Both Pakistan and foreign source of income (d) None 22. Which of the following tax is paid in relation to how much you earn? (a) Income tax (b) Inheritance tax (c) Value added tax (d) Sales tax 23. Which one of the following is the general meaning of Tax? (a) Relax (b) Lighten (c) Relieve (d) Fatigue 24. According to the functions of FBR which of the following is the important content for calculating tax on income? (a) Taxable income (b) Residential status (c) Tax years (d) All of these 25. In a tax ______________________ of FBR you give information about what you earn every year. (a) Return (b) Statement (c) Sheet (d) Report 26. A woman taxpayer shall be charged to tax to FBR taxable income is; (a) Less than 100000 (b) Less than 200000 (c) More than 200000 (d) Non of above 27. Interpretation of Tax Laws is the prime responsibility of which of the following? (a) FBR (b) High court (c) SBP (d) None


256

FUNCTION OF FBR

Chapter-02

28. Taxes are important instrument of which of the following policy under Functions of FBR? (a) Monetary policy (b) Fiscal policy (c) Trade policy (d) None 29. FBR can take which one of the following as e-Filing of return? (a) Return on notice by commissioner (b) Specimens of return (c) Electronically filed return (d) None 30. Pension received by a citizen of Pakistan is __________________ from tax (a) Partially taxable (b) Fully taxable (c) Taxable 25% of the pension received (d) Not exempt 31. In an association of person, 25% tax rate is applied by FBR where the taxable income exceeds; (a) Rs 1,3000,000 (b) Rs 1,000,000 (c) Rs 1,500,000 (d) Rs. 2,500,000 32. Commissioner Inland Revenue shall grant approval of any gratuity fund. (a) True (b) False (c) Under special powers (d) None 33. If a resident company sustains loss what will be the minimum tax rate? (a) 1% of invoice (b) 1% of bills (c) 1% of turnover (d) 1% of receipt against sales 34. Which one of the following canons of taxation suggests easiness in time of payment and mode of collection of tax under the Function of FBR? (a) Simplicity (b) Convenience (c) Certainty (d) Capacity to pay


257

FUNCTION OF FBR

Chapter-02

35. Which of the following is the tax year available for salaried individual declared by FBR? (a) 1st January to 31st December (b) 1st July to 30th June (c) 1st October to 30th September (d) 1st September to 31st August 36. Which of the following is not the type of tax? (a) Direct taxes (b) Indirect taxes (c) Value Added Taxes (d) Fees and Penalties 37. FBR imposes which of the following tax on merchandise imported or exported from one country to another? (a) Custom duty (b) Income tax (c) Sale tax (d) Wealth tax 38. Which of the following is a general compulsory contribution of wealth by the state, to meet the expenses incurred in providing common benefits upon the residents? (a) Fee (b) Taxes (c) Charges (d) Penalties 39. In the normal circumstances on which of the following tax in charged by FBR Pakistan? (a) Resident company (b) Gross Receipt (c) Total Income (d) Taxable Income 40. In FBR Pakistan gives tax concessions on which of the following? (a) Reduction in tax liability (b) Reduction in tax rate (c) Reduction in taxable income (d) All of these 41. The chairman of FBR has the responsibility for which of the following measures? (a) Formulation and administration of fiscal policies


258

FUNCTION OF FBR

Chapter-02

(b) Levy and collection of Federal taxes (c) Both a & b (d) None 42. Special tax year is adopted after seeking approval from the ______________________ (a) Commissioner (b) Tax officer (c) Appellate Tribunal (d) Supreme court 43. Which of the following is the External aid to interpretation of tax laws? (a) Preamble (b) Non-obstinate clause (c) Title of a chapter (d) Finance minister’s budget speech 44. Who is current chairman FBR? (a) Naisar M. khan (b) Tariq Bakwa (c) Anwar javid (d) None 45. ADR stands for (a) Alternate dispute Record (b) Alternative dispute record (c) Alternative dispute resolution (d) None of above


259

FUNCTION OF FBR

Chapter-02

ANSWERS 1

(c)

2

(c)

3

(a)

4

(b)

5

(d)

6

(d)

7

(c)

8

(a)

9

(b)

10

(b)

11

(c)

12

(d)

13

(d)

14

(c)

15

(a)

16

(a)

17

(c)

18

(d)

19

(a)

20

(d)

21

(a)

22

(a)

23

(d)

24

(d)

25

(a

26

(d)

27

(b)

28

(b)

29

(c)

30

(b)

31

(d)

32

(a)

33

(c)

34

(b)

35

(b)

36

(d)

37

(a)

38

(b)

39

(d)

40

(d)

41

(c)

42

(a)

43

(d)

44

(a)

45

(c)


260

TAX ADMINISTRATION

Chapter-03


Which of the following is income tax authority a. Board b. Special Audit Panel c. Commissioner Inland Revenue (Appeals) d. All of the above

2.

An officer vested with the power and functions of Commissioner shall be sub ordinate to the _________ a. Special Audit Panel b. Commissioner Inland Revenue c. Auditor Inland Revenue d. Chief Commissioner Inland Revenue

3.

The Board may appoint as many Chief Commissioners Inland Revenue and Such other ____________ and staff as may be necessary. a. Executive b. Ministerial Officer c. Executive or Ministerial Officers d. None of the above

4.

All appointments, other than of ___________ made under Income Tax Ordinance, 2001 shall be subject to rules and orders of the Federal Governments. a. Valuars b. Chartered Accountants c. Experts d. Any of the above

5.

The Chief Commissioners, Commissioners, and the Commissioners (appeals) shall perform all or such functions as may be assigned to them ___________. a. Board b. Ministry of Finance c. Appellate Tribunal Inland Revenue d. State Bank of Pakistan

6.

The Board or the Chief Commissioner with the permission of the Board may transfer _______________ in respect of cases or person from one Commissioner to another a. Jurisdiction b. File c. Refund application d. Exemption Certificate

7.

The Commissioner may by in order in writing delegate to any Officer of Inland Revenue assigned to the Commissioner under the Income Tax Ordinance, 2001. a. Only limited powers b. All or any of the powers c. No power d. None of the above


261

TAX ADMINISTRATION

8.

The Board may __________ authorize the Regional Commissioner or the Commissioner to grant approval in any case where such approval is required from the Board under any provision of Income Tax Ordinance, 2001. a. Regional Commissioner b. Commissioner c. Commissioner Appeals d. Any of (a) or (b)

9.

All Income Tax Authority and other persons employed in the execution of Income Tax Ordinance, 2001 shall observe and follow the order, instructions and directions issued by the Board except. a. Chief Commissioner Inland Revenue b. Commissioner (Appeals) c. both (a) & (b) d. None of the above

10.

The Board may, of its own motion, call for an examine or the rules made thereunder for the purpose of satisfying itself as to the ____________ of any decision or order passed. a. Legality b. Propriety c. Any of the above two d. None of the above

11.

The Board may select ___________ for audit of Income Tax affairs through Computer Ballot. a. Company b. Individuals c. AOP d. Persons or classes of persons

12.

A person shall be automatically selected for Audit of its Income Tax affairs for a tax year, if a. The tax payable with the return is not paid b. The return is not filed within the due date c. Any of the above two d. None of the above

13.

The Commissioner, Commissioner (Appeals) or the Appellate Tribunal may, by an order in writing, amend any order passed by him to _____________ apparent from the record on his or its own motion or any mistake brought to his or its notice by a taxpayer or, in the case of the Commissioner (Appeals) or the Appellate Tribunal, the Commissioner. a. Rectify any mistake b. Override any mistake c. Nullify any mistake d. None of the above

14.

No order of rectification of mistakes may be made after ________ years from the date of the order sought to be rectified.


Chapter-03

262

TAX ADMINISTRATION

a. b. c. d.

Chapter-03

Five One Two Six

15.

An authorized representative of the taxpayer shall be a ___________. a. Any accountant b. Relative of the taxpayer c. A current full time employee of the taxpayer d. All of the above

16.

None of the following shall be entitled to represent a taxpayer as authorized representative __________ a. Who has been dismissed or remove from services from Income Tax Department b. A person who have become insolvent c. Any of the above

17.

The Board may sanctioned reward to the whistleblowers in cases of ________. a. Concealment b. Evasion of Income Tax c. Fraud d. All of the above

18.

The claim for reward by the Board for the whistleblower shall be rejected, if a. Information provided is of no value b. The Board already had the information c. The information was available in Public record d. No collection of taxes is made from the information provided by the whistleblower e. All of the above


263

TAX ADMINISTRATION

Chapter-03

ANSWERS 1

(d)

2

(d)

3

(c)

4

(d)

5

(a)

6

(a)

7

(b)

8

(d)

9

(b)

10

(c)

11

(d)

12

(c)

13

(a)

14

(a)

15

(d)

16

(c)

17

(d)

18

(e)


264

Fpsc - Book - Final

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