FIN623 Final Term Past Papers

FIN623- Taxation Management · Composed By Faheem Saqib · A Mega File of Final term Solved Subjective · 2011 - 2010 · QUESTIONS FROM 2011 PRESENT PAPAERS

1. Under what conditions a commissioner of Income Tax may ask for the

1. Where the return of income furnished is not complete, the Commissioner shall issue a notice to the taxpayer informing him of the deficiencies (other than incorrect amount of tax payable on taxable income, as specified in the return, or short payment of tax payable) and directing him to provide such information, particulars, statement or documents by such date specified in the notice.
2. Where a taxpayer fails to fully comply by the due date, with the requirements, of the notice under sub-section (3), the return furnished shall be treated as an invalid return as if it had not been furnished.

Q2. (5 Marks)

1. Will Tax depreciation be allowed on a full year basis of a company
2. Are Expenses incurred prior to incorporation of a company tax deductible?

3. Draw a chart for the understanding of taxation structure in

Pakistan (5 Marks)?

Federal taxes are the taxes which can be levied by the federal government and include among others the followings:

Sales tax

Q4. In what ways a return of Income is filed? (3 Marks)

1. Prescribed form along with required documents.
2. Fully state all relevant particulars or information as specified in the form of return, including a declaration of the records kept by the taxpayer; and
3. Shall be signed by the person, being an individual, or the person’s representative where section 172 applies.

5. What is the tax treatment of Speculation business as per section 19

of Income Tax Ordinance 2001? (3 Marks)

• To be treated as distinct and separate from other business carried on by the person.
• Expenditures/deductions incurred on account of speculation business shall be apportioned in light of section 67.
• Profit and gains arising out of speculation business shall be included in the person’s income chargeable under the head “Income from Business”.

6. What does the word Market Value means as per rule 11 sub rules 3 of

The word “Market Value” [sub-rule (3) of Rule 11] shall be: a) Where agricultural produce is ordinarily sold in the market in its raw state or after application of any process ordinarily employed by a cultivator or receiver of agricultural income as rent-in-kind to render it fit to be taken to market, the market price for the produce at the time it is used as raw material in the person’s business;

OR

b) In any other case, the sum of the following amounts, namely:

Q2. 1. Define Depreciable asset?

Depreciable asset means a tangible movable or immovable property (not unimproved land) or structural improvement to immovable property owned by a person that has:

• Normal useful life of one year or more.
• Likely to lose value due to normal wear and tear.
• Used wholly in deriving income from business chargeable to tax.

2. Define employee share scheme under section 14 and also tell under what condition right to acquire shares are chargeable to tax under section 14 of IT ordinance 2001. Employee Share Schemes sec 14:

The value of a right or option to acquire share under this scheme shall be not chargeable to tax.
Where shares issued are subject to a restriction on transfer of the shares a) No amount shall be chargeable to tax under the head Salary until the earlier of I. the time the employee has a free right to transfer the shares; or II. The time the employee disposes of the shares &