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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 "final tax" regime under the Income Tax Ordinance, 2001?

A tax only applicable to salaried individuals

A system where tax liabilities are paid annually

A tax system that applies to international transactions

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

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

To reduce the total amount of taxes payable

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

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

Income from foreign investments

Salary from a private company

Income from agriculture (subject to conditions)

Income from government bonds

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

Tax paid on goods and services

A prepayment of taxes for the following tax year

Tax collected by employers from employees' salaries

Tax paid after filing tax returns

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

Sales Tax Return

Income Tax Return

Excise Duty Return

Business Tax Registration

6. 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

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

The year in which the tax return is filed

The year following the income year

The same year as the income year

The year in which the tax payment is made

8. 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

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

Total income before any deductions or exemptions

Net income after expenses

Income from foreign sources only

Income derived solely from investments

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

Customs duties

Sales tax

Income tax

Property tax

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

Rental income from property

Agricultural income

Income from salaries

Business profits

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

Profit from the sale of shares or real estate

Interest earned on savings accounts

Business profits

Income from salaries

13. 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 not deducted for personal income

Tax is only deducted for business profits

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

Tax paid at the time of filing returns

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

Tax paid for imports

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

15. 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

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

Gross income from business only

Total income of an individual

Net income after applying tax rates

Total income minus allowable deductions and exemptions

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

Minimizing tax liability through legal means such as exemptions and deductions

Hiding income to reduce tax liability

Not paying taxes at all

Using illegal methods to evade tax payments

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

25%

40%

35%

15%

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

Income from a business or profession

All of the above

Interest earned on savings accounts

Income from agricultural activities

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

The lowest tax rate applicable to small businesses

A fixed amount of tax levied regardless of income

The tax rate for salaried individuals

The tax paid by businesses with no income

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

Health insurance premiums

Rental income

Business profits

Personal travel expenses

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

No penalty, just correction of records

Reduction in tax liabilities

A fine, along with possible imprisonment

Tax refund will be issued

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

A tax on the profit earned by companies

A tax on individual salaries

A tax on bank deposits

A tax on the sale of goods

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

By subtracting deductible business expenses from gross revenue

By determining total profits and applying tax exemptions

By subtracting personal expenses from business revenues

By applying a flat tax rate on total sales

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

A person who receives income from abroad

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 is exempt from paying taxes

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

30%

35%

25%

20%

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

A 12-month period that ends on December 31st

A fiscal year from July 1st to June 30th

A calendar year from January 1st to December 31st

A 12-month period beginning on July 1st

28. 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

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

Education allowance for children

Travel allowances for business

Tax credits for children

Housing allowance

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

Dividend income

Income from agriculture (subject to conditions)

Salary

Profit from business activities

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

An individual whose income is solely derived from Pakistan

An individual who is a government employee

An individual who resides outside Pakistan for more than 183 days

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

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

Credit for tax paid on dividends

Refund for excess sales tax paid

Tax paid on foreign income

Tax on agricultural income

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

Rent paid for personal use

Donations to charitable organizations

Medical expenses

Contributions to a recognized retirement plan

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

State Bank of Pakistan

Federal Board of Revenue (FBR)

Pakistan Stock Exchange

Ministry of Commerce

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

Business-related travel expenses

Personal grocery expenses

Rent paid for a business office

Interest paid on a business loan

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

To impose and collect income tax from individuals and businesses

To enforce customs duties

To regulate the sales tax system

To provide exemptions on imports

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

To calculate the tax refund for businesses

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

38. 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 paid in full at the source and no further tax filing is required

A tax applied only to businesses with large profits

A system where tax is calculated based on actual income

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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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