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

The year in which the tax return is filed

The same year as the income year

The year following the income year

The year in which the tax payment is made

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

To enforce customs duties

To regulate the sales tax system

To impose and collect income tax from individuals and businesses

To provide exemptions on imports

3. 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

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

A tax applied only to businesses with large profits

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 system that applies only to salaried individuals

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

Federal Board of Revenue (FBR)

Pakistan Stock Exchange

State Bank of Pakistan

Ministry of Commerce

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

To file income tax returns on behalf of taxpayers

To identify illegal tax evasion methods

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

To calculate the tax refund for businesses

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

Salary

Income from agriculture (subject to conditions)

Profit from business activities

Dividend income

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

Tax credits for children

Education allowance for children

Housing allowance

Travel allowances for business

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

Business profits

Income from salaries

Interest earned on savings accounts

Profit from the sale of shares or real estate

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

Business profits

Rental income

Personal travel expenses

Health insurance premiums

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

By determining total profits and applying tax exemptions

By applying a flat tax rate on total sales

By subtracting personal expenses from business revenues

By subtracting deductible business expenses from gross revenue

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

Tax is paid directly to the tax authorities by the taxpayer

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

Tax is only deducted for business profits

Tax is not deducted for personal income

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

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

A system where tax liabilities are paid annually

A tax only applicable to salaried individuals

A tax system that applies to international transactions

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

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

An individual who is a government employee

An individual whose income is solely derived from Pakistan

An individual who resides outside Pakistan for more than 183 days

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

A person who is exempt from paying taxes

A person whose income is below the minimum taxable threshold

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

A person who receives income from abroad

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

Income from a business or profession

All of the above

Income from agricultural activities

Interest earned on savings accounts

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

Income from agriculture (subject to conditions)

Income from government bonds

Salary from a private company

Income from foreign investments

18. 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

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

Rental income from property

Agricultural income

Business profits

Income from salaries

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

Tax rebate

A fine and possible imprisonment

Suspension of business activities

Payment of late fees

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

25%

40%

35%

15%

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

Total income before any deductions or exemptions

Income derived solely from investments

Net income after expenses

Income from foreign sources only

23. 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

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

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

Tax paid at the time of filing returns

Tax paid for imports

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

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

To allow taxpayers to reduce their taxable income

To eliminate taxes for low-income individuals

To provide a refund of taxes paid in the previous year

To reduce the total amount of taxes payable

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

The tax rate for salaried individuals

A fixed amount of tax levied regardless of income

The tax paid by businesses with no income

The lowest tax rate applicable to small businesses

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

A 6-month period for businesses

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

A calendar year from January 1 to December 31

A 12-month period from the date of registration

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

Office rent and utilities

Income from investments

Personal clothing expenses

Personal grocery bills

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

A 12-month period beginning on July 1st

A 12-month period that ends on December 31st

A calendar year from January 1st to December 31st

A fiscal year from July 1st to June 30th

30. 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

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

20%

35%

25%

30%

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

Customs duties

Income tax

Sales tax

Property tax

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

Medical expenses

Donations to charitable organizations

Rent paid for personal use

Contributions to a recognized retirement plan

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

Tax paid after filing tax returns

Tax paid on goods and services

A prepayment of taxes for the following tax year

Tax collected by employers from employees' salaries

35. 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 in which income is assessed

The year when the business fiscal year ends

The year when taxes are paid

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

Income Tax Return

Excise Duty Return

Business Tax Registration

Sales Tax Return

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

Rent paid for a business office

Business-related travel expenses

Personal grocery expenses

Interest paid on a business loan

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

Gross income from business only

Net income after applying tax rates

Total income minus allowable deductions and exemptions

Total income of an individual

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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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