FIN623 Final Term Past Papers by Shahida Khalid

Not solved 10 marks questions because no include in current papers

Q43. What is the main purpose of Gratuity? (2 TIMES REPEAT) (3 marks)

Main purpose of Gratuity:

• Provision of Gratuity to employees or
• Undertaking of provision (payment) of gratuity on retirement or
• On employees becoming incapacitated or
• On termination of their employment after completion of minimum period of service specified in the regulations of fund or to the widows, children or dependants of such employees on their death
• All benefits granted by the fund shall be payable only in Pakistan.

Q44. Mr. Farooq's salary is Rs.22, 000 per month. He received commission during the year amounting to Rs.33, 000. He is provided a jeep by his employer for personal as well an official use. The employer took this jeep from a leasing company at an annual lease of Rs.80, 000. The fair market value of the 000. Calculate the taxable income of Mr. (3 marks)

Question statement is uncompleted

Q45. What are the Penalties in case of failure to maintain record and non compliance with the notice under section 185 and 186 of Income Tax Ordinance 2001 respectively? (3 marks)

Penalty for failure to maintain records Sec. 185

In case of first failure, two thousand rupees In the case of second failure, five thousand rupees In the case of third and subsequent failure, ten thousand rupees

Penalty for non-compliance with notice: Sec 186

a.In case of first failure, two thousand rupees b.In the case of second failure, five thousand rupees c.In the case of third and subsequent failure, ten thousand rupees

Q46. What are the exemptions available in Tax Ordinance 2001 related to Property Income? (5 marks)

Exemptions available under property income:

Any income of a trust or welfare institution from housing property clause (58)(1) B. The said clauses are reproduced below: (2) A trust administered under a scheme approved by the Federal Government in this behalf and established in Pakistan exclusively for the purposes of carrying out such activities as are for the benefit and welfare of Ex-servicemen and serving personnel, including civilian employees of the Armed Forces, and their dependents; or ii Exemployees and serving personnel of the Federal Government or a Provincial Government and their dependents, where the said trust is administered by a committee nominated by the Federal Government or, as the case may be, a Provincial Government. (3) A trust or welfare institution [or nonprofit organization] approved by [Regional Commissioner of Income Tax] for the purposes of this sub-clause.

Q47. What are the basic features of Sales tax? (5 marks)

Features of Sales Tax

• Indirect tax
• Broad based
• Elastic/ Flexible
• Easy to collect
• Potential for revenue generation

Q49. What is meant by Depreciable asset? (3 marks)

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.

Q50. Who is liable to pay Capital Value Tax on capital value of certain assets? (3 marks)

Purchase Gift Exchange

Q51. Your are required to define in detail the section 21(l) ‘Expenditure paid for in cash’ under head Income from Business. (5 marks)

Q52. What do you understand by the term ‘mal-administration’ in context with Income tax department? Explain (5 marks)

The term “mal-administration” includes: PAGE 109 TO110

(i) A decision, process, recommendation, act of omission or commission which- (a) Is contrary to law, rules or regulations or is a departure from established practice or procedure, unless it is bona fide and for valid reasons; (b) Is perverse, arbitrary or unreasonable, unjust, biased, oppressive, or discriminatory; (c) Is based on irrelevant grounds; or (d) Involves the exercise of powers, or the failure or refusal to do so, for corrupt or improper motives, such as bribery, jobbery, favoritism, nepotism and administrative excesses.

Q53. Mr. Adeel owns a property which he has rented out for Rs.10, 000 per month. The local authority has determined the rental value of the property as Rs.144, 000. He has no other income. (5 marks)

Required:

What will be the fair market value of the property?

How much tax will be payable by Mr.khan for the tax year 2009?

Q45. Briefly explain the unexplained income or assets under section 111 of Income Tax Ordinance 2001. (3 marks)

Sec. 111 unexplained income or assets

Where: A person has made an investment, Any amount credited to person’s books of account A person has incurred expenditure A person has made an investment, Any amount credited to person’s books of account A person has incurred expenditure.