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Income Tax Ordinance 2001 Pakistan Test Online

Mustansar KhanLast Updated: July 8, 2025

Income Tax Ordinance 2001 Pakistan Test Online

Income Tax Ordinance 2001 Pakistan Test

Total Questions:	38
Time Allowed:	20 Minutes
Total Marks:	38
How to Attempt Test:	Please choose the right Option in MCQ-type question.
Test Helpful For:	FBR Sub Inspector Test Customs Inspector Test FBR Interviews FBR Sepoy Test Preparation for Customs and Tax Related Questions

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1. Which of the following entities is responsible for implementing the Income Tax Ordinance, 2001 in Pakistan?

Pakistan Stock Exchange

Ministry of Commerce

State Bank of Pakistan

Federal Board of Revenue (FBR)

2. What is the "minimum tax" under the Income Tax Ordinance, 2001?

A fixed amount of tax levied regardless of income

The tax rate for salaried individuals

The lowest tax rate applicable to small businesses

The tax paid by businesses with no income

3. Which of the following is a "corporate tax" under the Income Tax Ordinance, 2001?

A tax on bank deposits

A tax on the sale of goods

A tax on individual salaries

A tax on the profit earned by companies

4. Which of the following is considered taxable income under the Income Tax Ordinance, 2001?

Income from a business or profession

Interest earned on savings accounts

Income from agricultural activities

All of the above

5. Which of the following would be considered a "business expense" that can be deducted under the Income Tax Ordinance, 2001?

Income from investments

Office rent and utilities

Personal clothing expenses

Personal grocery bills

6. Which of the following is the "final tax regime" in the context of the Income Tax Ordinance, 2001?

A system that applies only to salaried individuals

A system where tax is calculated based on actual income

A system where tax is paid in full at the source and no further tax filing is required

A tax applied only to businesses with large profits

7. What is the "income year" under the Income Tax Ordinance, 2001?

A fiscal year from July 1st to June 30th

A 12-month period beginning on July 1st

A calendar year from January 1st to December 31st

A 12-month period that ends on December 31st

8. Which of the following is an example of "capital gains" under the Income Tax Ordinance, 2001?

Income from salaries

Business profits

Interest earned on savings accounts

Profit from the sale of shares or real estate

9. What is "advance tax payment" under the Income Tax Ordinance, 2001?

Tax paid for imports

Tax that is withheld by the employer from an employee’s salary

Tax paid at the time of filing returns

Tax paid in advance by businesses or individuals based on estimated income

10. Under the Income Tax Ordinance, 2001, which of the following is considered a "non-resident" taxpayer?

An individual who is a government employee

An individual whose income is solely derived from Pakistan

An individual who resides in Pakistan for more than 183 days in a tax year

An individual who resides outside Pakistan for more than 183 days

11. What is the maximum tax rate for individuals under the Income Tax Ordinance, 2001 in Pakistan?

35%

15%

25%

40%

12. What is the "final tax" regime under the Income Tax Ordinance, 2001?

A tax system that applies to international transactions

A system where tax is deducted at the source and considered final payment

A tax only applicable to salaried individuals

A system where tax liabilities are paid annually

13. Which of the following is a key feature of the "tax withholding" system under the Income Tax Ordinance, 2001?

Tax is not deducted for personal income

Tax is paid directly to the tax authorities by the taxpayer

Tax is only deducted for business profits

Employers or payers withhold a portion of the income and remit it to the tax authorities

14. What is the definition of "gross income" under the Income Tax Ordinance, 2001?

Net income after expenses

Income derived solely from investments

Total income before any deductions or exemptions

Income from foreign sources only

15. What does the term "advance tax" refer to under the Income Tax Ordinance, 2001?

A prepayment of taxes for the following tax year

Tax paid after filing tax returns

Tax collected by employers from employees' salaries

Tax paid on goods and services

16. What is the "assessment year" under the Income Tax Ordinance, 2001?

The year in which the tax payment is made

The year following the income year

The year in which the tax return is filed

The same year as the income year

17. Which of the following is considered a tax credit under the Income Tax Ordinance, 2001?

Credit for tax paid on dividends

Tax paid on foreign income

Refund for excess sales tax paid

Tax on agricultural income

18. What is the term "taxable person" under the Income Tax Ordinance, 2001?

A person or entity that is liable to pay taxes under the Ordinance

A person whose income is below the minimum taxable threshold

A person who is exempt from paying taxes

A person who receives income from abroad

19. Under the Income Tax Ordinance, 2001, how is a business's taxable income calculated?

By determining total profits and applying tax exemptions

By subtracting personal expenses from business revenues

By applying a flat tax rate on total sales

By subtracting deductible business expenses from gross revenue

20. Which of the following is a tax-free allowance under the Income Tax Ordinance, 2001?

Tax credits for children

Travel allowances for business

Education allowance for children

Housing allowance

21. Under the Income Tax Ordinance, 2001, what is the consequence of providing false information on tax returns?

A fine, along with possible imprisonment

Tax refund will be issued

Reduction in tax liabilities

No penalty, just correction of records

22. What is the function of a "tax audit" under the Income Tax Ordinance, 2001?

To calculate the tax refund for businesses

To identify illegal tax evasion methods

To file income tax returns on behalf of taxpayers

To verify the financial statements and income tax filings of a taxpayer

23. Which of the following is a "non-taxable income" under the Income Tax Ordinance, 2001?

Income from salaries

Business profits

Rental income from property

Agricultural income

24. What is the general tax rate applied to corporate income under the Income Tax Ordinance, 2001?

30%

20%

25%

35%

25. Which of the following is the main purpose of the Income Tax Ordinance, 2001?

To enforce customs duties

To impose and collect income tax from individuals and businesses

To provide exemptions on imports

To regulate the sales tax system

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26. Which of the following is a deduction allowed under the Income Tax Ordinance, 2001 for individual taxpayers?

Personal travel expenses

Health insurance premiums

Business profits

Rental income

27. What is the term "tax avoidance" in the context of the Income Tax Ordinance, 2001?

Not paying taxes at all

Hiding income to reduce tax liability

Minimizing tax liability through legal means such as exemptions and deductions

Using illegal methods to evade tax payments

28. What is the purpose of "tax credits" under the Income Tax Ordinance, 2001?

To provide a refund of taxes paid in the previous year

To eliminate taxes for low-income individuals

To reduce the total amount of taxes payable

To allow taxpayers to reduce their taxable income

29. Which of the following taxes is imposed under the Income Tax Ordinance, 2001?

Sales tax

Property tax

Income tax

Customs duties

30. Which of the following would NOT be eligible for a tax deduction under the Income Tax Ordinance, 2001?

Interest paid on a business loan

Business-related travel expenses

Rent paid for a business office

Personal grocery expenses

31. What does the "taxable income" refer to under the Income Tax Ordinance, 2001?

Total income of an individual

Gross income from business only

Net income after applying tax rates

Total income minus allowable deductions and exemptions

32. Which of the following is a "penalty" under the Income Tax Ordinance, 2001 for failure to file tax returns?

A fine and possible imprisonment

Tax rebate

Suspension of business activities

Payment of late fees

33. Which of the following is considered an exempt income under the Income Tax Ordinance, 2001?

Income from agriculture (subject to conditions)

Salary

Profit from business activities

Dividend income

34. Which of the following forms must be filed annually under the Income Tax Ordinance, 2001 for individual taxpayers?

Sales Tax Return

Excise Duty Return

Business Tax Registration

Income Tax Return

35. What does the "tax year" mean under the Income Tax Ordinance, 2001?

A 6-month period for businesses

A 12-month period from the date of registration

A fiscal year starting from July 1 and ending on June 30

A calendar year from January 1 to December 31

36. Which of the following is NOT a deduction available under the Income Tax Ordinance, 2001?

Rent paid for personal use

Medical expenses

Contributions to a recognized retirement plan

Donations to charitable organizations

37. What is the term "taxable year" in the context of the Income Tax Ordinance, 2001?

The year during which income is earned and taxed

The year when taxes are paid

The year when the business fiscal year ends

The year in which income is assessed

38. Which of the following is eligible for tax exemption under the Income Tax Ordinance, 2001?

Income from government bonds

Salary from a private company

Income from foreign investments

Income from agriculture (subject to conditions)

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Mustansar KhanLast Updated: July 8, 2025

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Income Tax Ordinance 2001 Pakistan Test Online

Income Tax Ordinance 2001 Pakistan Test Online

Income Tax Ordinance 2001 Pakistan Test

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Income Tax Ordinance 2001 Pakistan Test Online

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