TX B Income tax liabilities of individuals and unincorporated bodies

Written by Saad Rahman (ACCA)

ACCA · Taxation (Pakistan) · 16 questions

Name: ____________________ Date: ____________

A salaried individual has salary income of more than 75 percent of taxable income and taxable income of Rs. 2,500,000. What is the tax, using ACCA's 2026 to 2027 salaried rates and ignoring any surcharge?
- A Rs. 185,000
- B Rs. 346,000
- C Rs. 116,000
- D Rs. 575,000
A salaried individual has taxable income of Rs. 4,500,000. Using ACCA's 2026 to 2027 salaried rates, what is the tax before any surcharge?
- A Rs. 736,000
- B Rs. 756,000
- C Rs. 616,000
- D Rs. 1,575,000
A salaried individual has taxable income of Rs. 800,000. What is the tax before any surcharge?
- A Rs. 30,000
- B Rs. 6,000
- C Rs. 0
- D Rs. 2,000
A non-salaried individual has taxable income of Rs. 2,000,000. What is the tax before any surcharge, using ACCA's non-salaried rates?
- A Rs. 170,000
- B Rs. 600,000
- C Rs. 250,000
- D Rs. 290,000
A non-salaried individual has taxable income of Rs. 1,000,000. What is the tax before any surcharge?
- A Rs. 60,000
- B Rs. 90,000
- C Rs. 0
- D Rs. 150,000
Taxable pension is Rs. 12,000,000. What is the tax using ACCA's rate on taxable pension?
- A Rs. 100,000
- B Rs. 500,000
- C Rs. 600,000
- D Rs. 0
A person's salary is 60 percent of taxable income. Which rates apply?
- A A flat 10 percent
- B No tax
- C The salaried slab rates
- D The non-salaried slab rates
On what basis is salary income taxed?
- A The receipt basis
- B The earnings basis
- C The accruals basis
- D The invoice basis
Plant and machinery costing Rs. 2,000,000 is bought in the year. Using ACCA's rates (initial allowance 25 percent, depreciation 15 percent of tax WDV), what is the total first-year allowance?
- A Rs. 800,000
- B Rs. 725,000
- C Rs. 300,000
- D Rs. 500,000
Using the same rates, what is the tax written down value of plant and machinery that cost Rs. 2,000,000 at the end of its first year?
- A Rs. 1,700,000
- B Rs. 1,500,000
- C Rs. 1,275,000
- D Rs. 1,775,000
Computer hardware costing Rs. 100,000 was bought last year and depreciation of 30 percent was claimed on the cost. What is this year's depreciation allowance?
- A Rs. 30,000
- B Rs. 39,000
- C Rs. 21,000
- D Rs. 70,000
Pre-commencement expenditure of Rs. 500,000 is amortised at 20 percent a year. What is the annual deduction?
- A Rs. 500,000
- B Rs. 20,000
- C Rs. 100,000
- D Rs. 50,000
Which statement about business expenditure is correct?
- A Private expenditure is deductible
- B Fines are always deductible
- C All expenditure is deductible
- D Capital expenditure is not deductible but may qualify for depreciation
Which losses can generally be set against other heads of income in the same year?
- A Speculation losses against salary
- B Business losses, apart from salary and property income
- C Capital losses against salary
- D Foreign losses against salary
An AOP has paid tax on its profits. How is a member's share of that profit treated in the member's hands?
- A It is taxed again in full
- B It is taxed as salary
- C It is exempt, except where the member is a company
- D It is taxed at 50 percent
What is the normal tax year in Pakistan?
- A Any 6 months
- B The 12 months ending on 30 June
- C The 12 months ending on 31 December
- D The 12 months ending on 31 March

Answer key

1. A, 2. B, 3. D, 4. D, 5. A, 6. A, 7. D, 8. A, 9. B, 10. C, 11. C, 12. C, 13. D, 14. B, 15. C, 16. B

Tax = Rs. 116,000 + 23% x (2,500,000 - 2,200,000) = Rs. 185,000.
Tax = Rs. 616,000 + 35% x (4,500,000 - 4,100,000) = Rs. 756,000.
The first Rs. 600,000 is taxed at 0%. 1% x (800,000 - 600,000) = Rs. 2,000.
Tax = Rs. 170,000 + 30% x (2,000,000 - 1,600,000) = Rs. 290,000.
15% x (1,000,000 - 600,000) = Rs. 60,000.
The first Rs. 10,000,000 is at 0%. 5% x (12,000,000 - 10,000,000) = Rs. 100,000.
The salaried rates apply only where salary exceeds 75 percent of taxable income.
Salary is taxed when it is received or treated as received.
Initial allowance = 500,000. WDV = 1,500,000. Depreciation = 225,000. Total = 725,000.
1,500,000 - 225,000 = 1,275,000.
The tax WDV is 70,000 after last year's allowance. 30% x 70,000 = 21,000.
20% x 500,000 = 100,000.
Revenue expenditure for the business is deductible, subject to specific rules.
Capital and speculation losses are restricted.
The AOP is taxed separately from its members.
A special or transitional tax year may apply in some cases.