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MCQs of Income Tax

MCQs of Income Tax

MCQs of Income Tax Ordinance 2001 are available for the students who are preparing for Inspector Inland Revenue. You can check these MCQs day by day. We will upload in parts, and these are the important MCQs of Income Tax Ordinance 2001. So, it will help if you practice them at least thrice before appearing in the test. We have also uploaded these same mcqs in shape of Quiz of Income Tax Ordinance. So, you may practice these quizzes until you get great remarks. Apart from this, we will try to upload these mcqs on regular basis, so don’t forget to check it regularly until its completion.

Income Tax MCQs

1.       Income Tax Ordinance 2001 was promulgated on __________?

a.       1st July

b.      13 September

c.       1st June

d.      31st July

 

2.       Income Tax Ordinance 2001 became effective from ___________?

a.       1st July 2001

b.      13 September 2001

c.       1st July 2002

d.      1st June 2001

 

3.       How many chapters are there in Income Tax Ordinance 2001?

a.       6

b.      10

c.       11

d.      13

 

4.       __________ sections in Income Tax Ordinance 2001?

a.       49

b.      76

c.       24

d.      242

 

5.       There are _______ schedules in Income Tax Ordinance 2001?

a.       4

b.      13

c.       7

d.      14

 

6.       Income Tax Ordinance 2001 extends to __________?

a.       Punjab

b.      Sindh

c.       Whole Pakistan

d.      KPK

 

7.       Chapter one of Income Tax Ordinance deals with _____?

a.       Miscellaneous

b.      Preliminary

c.       Tax on taxable income

d.      NOT

 

8.       Chapter third of Income Tax Ordinance discusses about_________?

a.       Tax on taxable income

b.      Charge of tax

c.       Common rules

d.      NOT

 

9.       There are __________ heads of Income?

a.       3

b.      4

c.       5

d.      6

 

10.   Heads of income are discussed in which chapter of Income Tax Ordinance 2001?

a.       1st

b.      2nd

c.       3rd

d.      4th

You may also check the video of Basic concepts of Income Tax Ordinance, 2001.

11.   Section 11 of Income Tax Ordinance deals with ___________?

a.       Total Income

b.      Taxable Income

c.       Heads of Income

d.      NOT

 

12.   First head of income is ___________?

a.       Property

b.      Salary

c.       Business

d.      Capital gain

 

13.   Salary as the head of income is discussed under ______ part of chapter third of Income Tax Ordinance 2001?

a.       Second

b.      Third

c.       Fourth

d.      NOT

 

14.   Salary is discussed under section _______ of Income Tax Ordinance 2001?

a.       11

b.      12

c.       13

d.      14

 

15.   Value of Perquisites is discussed under ____ section of Income Tax Ordinance 2001?

a.       12

b.      13

c.       14

d.      15

 

16.   Employee share schemes are discussed under which section of Income Tax Ordinance 2001?

a.       11

b.      12

c.       13

d.      14

 

17.   Salary includes__________?

a.       Pay

b.      Wages

c.       Remuneration

d.      Pension

e.      AOT

 

18.   Employee share schemes are ______ in salary head of income.

a.       Chargeable to tax

b.      Not chargeable to tax

c.       Optional

d.      NOT

 

19.   Second head of income explains about________?

a.       Business

b.      Property

c.       Capital Gain

d.      Salary

e.      Other sources

 

20.   Income from property is discussed under section ________of Income Tax Ordinance 2001?

a.       14

b.      15

c.       16

d.      NOT

You can check MCQs of Federal Excise Act, 2005

21.   Income from property means__________?

a.       Income from rent

b.      Income from selling a house

c.       Both a and b

d.      NOT

 

22.   Non-adjustable amounts received in relation to building fall under which head of income?

a.       Business

b.      Property

c.       Salary

d.      Capital Gain

 

23.   Section 16 of Income tax ordinance 2001 explains about_________?

a.       Income from property

b.      Non-adjustable amount

c.       Both a and b

d.      NOT

 

24.   Third head of Income deals with _____________?

a.       Salary

b.      Business

c.       Property

d.      Capital gain

 

25.   When an agriculturist provides services under the federal department of Pakistan and he gets a decent income. This income will fall under _______ head?

a.       Business

b.      Property

c.       Salary

d.      Capital gain

 

26.   When an agriculturist opens a store of agricultural medicine and he earns a fair income from it. This income will fall under___________ head?

a.       Salary

b.      Business

c.       Property

d.      NOT

 

27.   If a person gains income from immovable property, then it falls under _______ head of Income?

a.       Salary

b.      Business

c.       Property

d.      NOT

 

28.   Ali gives his car on rent to a person. The income he gets from renting a car falls under which head of income?

a.       Salary

b.      Property

c.       Business

d.      Capital gain

 

29.   Income from moveable property falls under which head of income?

a.       Business

b.      Property

c.       Salary

d.      NOT

 

30.   Income from business includes______?

a.       Trade

b.      Profession

c.       Hire or lease of immoveable property

d.      AOT

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31.   Speculation business is discussed under which section of Income Tax Ordinance 2001?

a.       17

b.      18

c.       19

d.      20

 

32.   4th head of Income discusses about _____________?

a.       Salary

b.      Property

c.       Business

d.      Capital gains

e.      NOT

 

33.   When a person sells his immovable property and he gets income from it. This income will fall under__________ head?

a.       Property

b.      Business

c.       Capital gains

d.      AOT

 

34.   When Ali sells his services in a shop then he gets income that falls under______ head; however, if he sells the whole shop and gets income fall under _______ head.

a.       Property, business

b.      Business, property

c.       Business, capital gains

d.      Capital gains, business

 

35.   Capital gains are discussed under which section of Income Tax Ordinance 2001?

a.       17

b.      37

c.       38

d.      18

 

36.   Deduction of losses are explained under _______ section of Income Tax Ordinance 2001?

a.       35

b.      36

c.       37

d.      38

 

37.   5th head of Income deals with _____________?

a.       Property

b.      Salary

c.       Other sources

d.      Business

 

38.   Income from other sources is discussed under which section of Income Tax Ordinance 2001?

a.       37

b.      38

c.       39

d.      40

 

39.   Income from dividends and royalty fall under which head of income?

a.       Property

b.      Salary

c.       Business

d.      Other sources

 

40.   Deduction in computing income chargeable under the head of income from other sources is explained under_________?

a.       38

b.      39

c.       40

d.      NOT

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41. Exemption and tax concessions in Income Tax Ordinance are discussed under chapter?
a. 2nd
b. 3rd
c. 4th
d. NOT

 

42. Agricultural income under Income Tax Ordinance is discussed under section _____?
a. 40
b. 41
c. 42
d. 43

43. Any income which is derived from the source of agriculture is ________?
a. Chargeable to income tax
b. Exempted from income tax
c. Both a and b
d. NOT

44. According to which section of Income Tax Ordinance the income tax on agriculture is exempted?
a. 16
b. 13
c. 41
d. 14

45. Under which section of the Income Tax Ordinance, Diplomatic and United Nations officials will be exempted from income tax?
a. 41
b. 42
c. 43
d. 44

46. According to ____________act a diplomatic officials are exempted from income tax?
a. Diplomatic and Consular Privileges Act 1969
b. UN Privileges and Immunities Act 1948
c. Diplomatic and Consular Privileges Act 1972
d. NOT

47. Which act exempted income tax from UN Officials?
a. UN Privileges and Immunities Act 1928
b. Diplomatic and Consular Privileges Act 1972
c. UN Privileges and Immunities Act 1948
d. AOT

48. All foreign government officials are _________?
a. Required to pay income tax
b. Exempted from income tax
c. Both a and b
d. NOT

49. Foreign government officials are exempted from income tax under section _____ of Income Tax Ordinance 2001?
a. 41
b. 42
c. 43
d. 44

50. Exemption under international agreement is discussed under section ___________ of Income Tax Ordinance 2001?
a. 39
b. 41
c. 42
d. 44

51. Any Pakistan source income which Pakistan is not permitted to tax under a tax treaty shall be exempt from tax under section _________ of Income Tax Ordinance 2001?
a. 43
b. 44
c. 45
d. 46

52. If Ali gets an owner by the president of Pakistan, these allowance attached to Ali’s salary as the honor of president is ___________ income tax.
a. Chargeable to
b. Exempted from
c. Optional
d. NOT

53. The honor, award, or medal awarded to a person by the president of Pakistan shall be _______?
a. Payable to income tax
b. Exempt from income tax
c. Both a and b
d. NOT

54. President’s honors are exempted from the income tax according to ________ section Income Tax Ordinance 2001?
a. 43
b. 44
c. 45
d. 46

55. A non-resident person gains profit on the debt is ___________ income tax?
a. Exempt from
b. Chargeable to
c. Both a and b
d. NOT

56. Under which section a non-resident person receiving profit on the security which is issued by the resident person is exempted from income tax?
a. 44
b. 45
c. 46
d. 47

57. The income in shape of scholarship is ___________ under Income Tax Ordinance 2001?
a. Exempted for income tax
b. Chargeable to income tax
c. Optional
d. NOT

58. Scholarships are exempted from income tax under which section?
a. 45
b. 46
c. 47
d. 48

59. Ali and Alina are husband and wife. If they get separated, then the support payment given by Ali to Alina is ____________?
a. Exempted from income tax
b. Chargeable to pay income tax
c. Optional
d. NOT

60. Which section of the Income Tax Ordinance allows exempting the support payments under an agreement to live apart?
a. 42
b. 44
c. 46
d. 48

61. The income of the Federal Government shall be exempt from tax under section _____ of Income Tax Ordinance 2001?
a. 49
b. 47
c. 45
d. 43

62. Generally, the income of provincial and local governments are ________ in Pakistan?
a. Payable to income tax
b. Exempted from income tax
c. Both a and b
d. NOT

63. If the income of the provincial or local government is derived from business carried outside its jurisdiction shall be ___________?
a. Payable tax under salary income head
b. Payable tax under business income head
c. Not payable tax under Income Tax Ordinance
d. NOT

64. According to section 49 of Income Tax Ordinance 2001, __________ are exempted from income tax?
a. Local government
b. Provincial government
c. Federal government
d. AOT

65. What is the period mentioned for the short-term resident individual under section 50 of the Income Tax Ordinance 2001?
a. 2 years
b. 3 years
c. 4 years
d. NOT

66. If a person comes to Pakistan and does service not more than three years then he is _______ income tax?
a. Required to pay
b. Exempted from
c. Both a and b
d. NOT

67. Foreign source income of returning expatriates is discussed under which section of Income Tax Ordinance 2001?
a. 50
b. 51
c. 52
d. 53

68. How much period an individual is not asked to pay income tax if he returns to Pakistan from foreign for the rest of his life.
a. 3 preceding years and 1 next year
b. 4 preceding years and 1 next year
c. 2 preceding years and 2 next years
d. 3 preceding years and 3 next years

69. Tax concession and exemptions are discussed under ____ schedule of Income Tax Ordinance 2001?
a. 1st
b. 2nd
c. 3rd
d. 4th

70. In which section of Income Tax Ordinance of 2001 tax concession is discussed?
a. 51
b. 52
c. 53
d. NOT

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71. Exemption and tax provision in other laws are discussed under section _________ of Income Tax Ordinance 2001?
a. 51
b. 53
c. 54
d. 55

72. Section 55 of Income Tax Ordinance discusses about __________?
a. Exemption and tax provision in other laws
b. Exemption and tax concessions
c. Limitation of exemption
d. AOT

73. The exemption of income tax is limited to ____________?
a. Any person receiving payment from the government
b. Original recipient
c. Both a and b
d. NOT

74. If a tax is exempted or reduced in any other law then it would not be effective until it is validated under______________?
a. Sales Tax Act
b. Income Tax Ordinance
c. Federal Excise Duty
d. NOT

75. Section 56 of Income Tax Ordinance deals with __________?
a. Limitation of exemption
b. Set off losses
c. Exemption and tax concession
d. NOT

76. Under which head of income, a person cannot claim set-off a loss?
a. Business
b. Property
c. Salary
d. Capital gain

77. If a person has a loss in his income, other than salary head, he _________.
a. Can carry the loss forward to the next tax year
b. Cannot carry the loss forward to the next tax year
c. Optional
d. NOT

78. Set-off of losses of companies operating hotels are discussed under ________ section of Income Tax Ordinance 2001?
a. 54
b. 55
c. 56
d. 56A

79. All the companies of ___________ which are operating hotels can claim set-off of losses.
a. Pakistan
b. Gilgit Baltistan
c. Azad Jammu and Kashmir
d. AOT

80. Carry forward for business losses is possible for ______?
a. Different head of income
b. The same head of income
c. Both a and b
d. NOT

81. Carry forward for business losses is discussed under section __ of Income Tax Ordinance 2001?
a. 55
b. 56
c. 56A
d. 57

82. Set off of business loss consequent to amalgamation is explained under which section _______?
a. 56
b. 56A
c. 57A
d. 57

83. As a result of the amalgamation of two companies, the set-off losses can be carried forward for the year____________?
a. 3
b. 4
c. 6
d. 9

84. Carry forward of speculation business losses is discussed under section__________?
a. 59
b. 58
c. 57
d. 56

85. Section 59 of Income Tax Ordinance deals with _______?
a. Carry forward of capital losses
b. Carry forward of speculation business
c. Carry forward of business losses
d. NOT

86. Limitations on set off and carry forward of losses are discussed under section ______?
a. 57A
b. 56A
c. 59A
d. NOT

87. The loss in the income of the association ___________ personal income.
a. Can be set-off
b. Cannot be set-off
c. Optional
d. NOT

88. Section 59AA discusses about _______________?
a. Group taxation
b. Holding companies
c. Subsidiary companies
d. AOT

89. Holding companies and subsidiary companies of 100% owned group may opt to be taxed as one _______?
a. Tax unit
b. Fiscal unit
c. Relief unit
d. NOT

90. Group relief is discussed under section ________ of Income Tax Ordinance 2001.
a. 57A
b. 59A
c. 59B
d. NOT

91. When the loss is to be surrendered, then which of the following formulas is applied?
a. (A×B)/100
b. A/A+B ×100
c. (A/100) ×B
d. NOT

92. A is considered as _________ in the formula of loss surrender of the holding and subsidiary company formula?
a. Percentage share capital held by a subsidiary of holding company
b. Percentage share capital held by the holding company of its subsidiary company
c. Percentage of share of asset of a subsidiary company of holding company
d. NOT

93. B is considered ________ in the formula given for measuring the loss surrender of the holding and subsidiary company.
a. Assessed loss of the holding company
b. Assessed profit of the subsidiary company
c. Assessed loss of the subsidiary company
d. NOT

94. Deductible Allowances are discussed under which section of ITO 2001?
a. 59
b. 59A
c. 60
d. NOT

95. Deductible allowances deal with which of the following section(s)?
a. 60
b. 60A
c. 60B
d. 60C
e. AOT

96. A person shall be entitled to the deductible allowance for the amount of Zakat paid by him in a tax year under the ______________?
a. Zakat Ordinance 1980
b. Zakat and Ushr Ordinance 1969
c. Zakat and Ushr Ordinance 1980
d. NOT

97. Zakat as a deductible allowance is discussed under ______ section of ITO 2001?
a. 60 D
b. 60 B
c. 60 A
d. 60

98. Workers’ Welfare Fund is a deductible allowance and it is discussed under _________ section?
a. 60
b. 60 A
c. 60 B
d. NOT

99. According to section 60 A, Workers’ welfare fund is a deductible allowance under ________?
a. Workers’ Welfare Fund Ordinance, 1990
b. Workers’ Welfare Fund Ordinance, 1980
c. Workers’ Welfare Fund Ordinance, 1971
d. NOT

100. Workers’ Participation Fund is categorized as deductible allowance under section _________?
a. 60 A
b. 60 B
c. 60 C
d. 60 D

101. Deductible allowance for profit on debt is explained under ____ section of ITO, 2001?
a. 60 D
b. 60 C
c. 60 B
d. 60 A

102. Section 60 D of Income Tax Ordinance 2001 deals with ___________?
a. Deductible allowance for profit on debt
b. Workers’ participation fund
c. Workers’ welfare fund
d. Deductible allowance for education expenses

103. Deductible allowance for education expenses are entitled to claim the deduction only if the taxable income of an individual is less than _______?
a. One million
b. Two and a half million
c. One and a half million
d. NOT

104. Charitable Donation is discussed under which section of ITO?
a. 60D
b. 61
c. 62
d. NOT

105. Tax credits can be claimed on _______?
a. Charitable donation
b. Investment in shares and insurance
c. Contribution to an approved pension fund
d. Employment generation by manufacturers
e. Point of sale machine
f. AOT

106. Charitable donations are______?
a. Board of education or university in Pakistan
b. Educational institutions, hospitals, or relief fund
c. Non-profit organizations or organizations mentioned in the 13th schedule
d. AOT

107. Tex Credit can be claimed on charitable donation with ________ formula
a. A×B/100 ×C
b. (A×B)/100
c. (A×B) × C
d. NOT

108. While claiming tax credit on charitable donation the A in the formula is__?
a. Taxable income of the person
b. The total amount of person’s donation
c. Fifteen percent of taxable income
d. NOT

109. Tax credit on charitable donation can only be claimed if it was paid in ______ form?
a. Cash
b. Cross cheque
c. Both a and b
d. NOT

110. Section 62 of ITO 2001 deals with ___________?
a. Tax credit for charitable donations
b. Tax credit for investment in shares and insurance
c. Tax credit for investment in health insurance
d. NOT

111. Tax credit for investment in health insurance is discussed under ____ section?
a. 60
b. 61
c. 62
d. 62A

112. Section 63 of ITO deals with ___________?
a. Tax credit for a charitable donation
b. Tax credit for contribution in an approved pension fund
c. Tax credit for investment in health insurance
d. NOT

113. Tax credit for employment generation by manufacturers is discussed under____?
a. 62
b. 63
c. 64
d. 64 B

114. Companies that set up new manufacturing units between the 1st day of July 2015 and the 30th day of June (2019) will be given a tax credit for a period of__________?
a. 3 years
b. 6 years
c. 9 years
d. 10 years

115. The tax credit for the point of sale machine is discussed under the ______ section of ITO 2001?
a. 62
b. 64
c. 64 B
d. 64 D

116. Tax credit for investment is explained in ___________ section?
a. 64 D
b. 64 B
c. 65 B
d. NOT

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