FIN623 Final Term MCQs 2026 by VUBuddy

Q1. Sec. 64 tax credit for profit on debt of the ITO 2001 for the tax year 2026 has been omitted by:

1. Finance Act 2016
2. Finance Act 2015
3. Finance Act 2014
4. Finance Act 2017

Correct answer: Finance Act 2017

Q2. Which of the following is the rate of tax for Mr. Zia, who has earned a basic salary of Rs. 1,850,000 and a medical allowance of Rs. 150,000 during the tax year 2026?

1. Rs. 6,000 plus 11% of the amount exceeding Rs. 1,200,000
2. 1% of the amount exceeding Rs. 600,000
3. Rs. 90,000 plus 20% of the amount exceeding Rs. 1,200,000
4. Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000

Correct answer: Rs. 6,000 plus 11% of the amount exceeding Rs. 1,200,000

Q3. As per clause 13(iii) of part 1 of the second schedule, if FBR approves the gratuity fund for the tax year the following heads?

1. Capital Gain
2. Income from Other Sources
3. Income from Salary
4. Income from Business

Correct answer: Income from Other Sources

Q4. Which of the following is the rate of tax for Mr. Zee, who has earned a basic salary of Rs. 850,000, utilities of Rs. 200,000 and fees of Rs. 200,000 during the tax year 2026?

1. 1% of the amount exceeding Rs. 600,000
2. Rs. 180,000 plus 25% of the amount exceeding Rs. 2,200,000
3. Rs. 6,000 plus 11% of the amount exceeding Rs. 1,200,000
4. Rs. 30,000 plus 15% of the amount exceeding Rs. 1,200,000

Correct answer: Rs. 6,000 plus 11% of the amount exceeding Rs. 1,200,000

Q5. What is the tax treatment of the voluntary payments made to the employee?

1. Wholly Exempt
2. Not mentioned in Income Tax Ordinance 2001
3. Wholly Taxable
4. Partly Taxable

Correct answer: Wholly Taxable

Q6. Mr. Aamir, a salaried person, has a taxable income of Rs. 20,000,000 for the tax year 2026. What will be his tax liability? (Tax Slab: Rs. 616,000 plus 35% of the amount exceeding Rs. 4,100,000)

1. Rs. 20,220,000
2. Rs. 6,181,000
3. Rs. 15,000,000
4. Rs. 8,090,000

Correct answer: Rs. 6,181,000

Q7. Mr. A earned a basic salary of Rs. 300,000, a commission of Rs. 200,000 and a bonus of Rs. 100,000 during the year. Which of the following is the tax liability of Mr. A for the tax year 2026?

1. Rs. 22,000
2. Rs. 20,000
3. Rs. 0
4. Rs. 12,500

Correct answer: Rs. 0

Q8. What is the tax treatment of the overtime payments received by the employee?

1. Wholly Taxable
2. Wholly Exempt
3. Not mentioned in Income Tax Ordinance 2001
4. Partly Taxable

Correct answer: Wholly Taxable

Q9. The tax rebate for the tax year 2026, provided to the teacher of the research institute duly recognized by HEC, is:

1. 45%
2. 25%
3. 75%
4. No more available

Correct answer: No more available

Q10. Depreciation is allowed as admissible deduction from business income if depreciable asset has life of

1. More than one year
2. Five months
3. Three months
4. One month

Correct answer: More than one year

Q1. What is the tax treatment of the leave encashment on the retirement of the employee?

1. Wholly exempt
2. Partly Taxable
3. Not mentioned in Income Tax Ordinance 2001
4. Wholly Taxable

Correct answer: Partly Taxable

Q2. MTS stands for which of the following?

1. Minimum transfer Salary
2. Maximum transfer Salary
3. Minimum time scale
4. Maximum time scale

Correct answer: Minimum time scale

Q3. Which of the following deduction is allowed in computing income chargeable under the head "Income from Business"?

1. Any personal expenditure
2. Expenditure incurred by an amalgamated company
3. Any entertainment expenditure
4. Brokerage expenditure

Correct answer: Brokerage expenditure

Q4. Mr. A earned a basic salary of Rs. 800,000 and an overtime payment of Rs. 150,000 during the year. Which of 600,000)

1. Rs. 3,500
2. Rs. 52,500
3. Rs. 20,000
4. Rs. 10,000

Correct answer: Rs. 3,500

Q5. Mr. Aqeel earned a basic salary of Rs. 450,000 and utilities of Rs. 100,000 during the year. Which of the following is the tax liability of Mr. Aqeel for the tax year 2026?

1. Rs. 2,000
2. Rs. 1,000
3. Rs. 0
4. Rs. 3,000

Correct answer: Rs. 0

Q6. The amount of relief allowed as per sec. 61 of the ITO 2001 to the company is the lesser of the actual

1. 30%
2. 20%
3. 25%
4. 15%

Correct answer: 25%