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Income Tax MCQs Pakistan — 200+ Practice Questions

52
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17
Topics
ITO
2001 Based
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Practice Pakistan income tax with free multiple-choice questions based on the Income Tax Ordinance, 2001 and the Sales Tax Act, 1990. Each question is tagged with its relevant section reference and comes with a detailed explanation, so you learn the reasoning — not just the right option. The questions are useful for CA, ICMAP, ACCA, CSS and FBR exam preparation, as well as for taxpayers who simply want to understand Pakistan's tax rules better.

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11
Question 11 of 52 Exempted Income
Basic
📖 Section 41. Agricultural Income - ITO, 2001
Which of the following incomes are exempt from tax under the Income Tax Ordinance, 2001 ?
1 Income from Salary ❌
2 Income from Property ❌
3 Income from Business ❌
4 Agricultural Income ✅
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Any agricultural income received or earned by a person shall be exempt from tax under the Income Tax Ordinance, 2001.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 41. Agricultural Income - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
12
Question 12 of 52 Computation of Total Income
Basic
📖 Section 10. Total Income - ITO, 2001
Total income is calculated after combining how many heads of income ?
1 2 ❌
2 3 ❌
3 5 ✅
4 4 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Total income is the combined income from all heads: Salary, Property, Business, Capital Gains, and Other Sources.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 10. Total Income - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
13
Question 13 of 52 Resident and Non-resident Persons
Basic
📖 Section 82. Resident Individual - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals Resident Individual?
1 Section 80 ❌
2 Section 81 ❌
3 Section 82 ✅
4 Section 83 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
A person shall be treated as a resident for a tax year in Pakistan if he or she stays in Pakistan for a period of 183 days or more.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 82. Resident Individual - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
14
Question 14 of 52 Advance Tax – Transitional Phase
Basic
📖 Section 236C. Advance Tax on sale or transfer of immovable Property - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with Advance Tax on Sale or Transfer of Immovable Property?
1 Section 235 ❌
2 Section 236K ❌
3 Section 236Y ❌
4 Section 236C ✅
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
At the time of sale or transfer of immovable property, advance tax shall be collected by the withholding agent.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 236C. Advance Tax on sale or transfer of immovable Property - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
15
Question 15 of 52 Advance Tax – Transitional Phase
Basic
📖 Section 236K. Advance Tax on purchase or transfer of immovable Property - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with Advance Tax on Purchase or Transfer of Immovable Property ?
1 Section 236Y ❌
2 Section 235 ❌
3 Section 236K ✅
4 Section 236C ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
At the time of purchase or transfer of immovable property, advance tax shall be collected by the withholding agent.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 236K. Advance Tax on purchase or transfer of immovable Property - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
16
Question 16 of 52 Filing of Return
Basic
📖 Section 114. Return of Income - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with Return of Income ?
1 Section 110 ❌
2 Section 111 ❌
3 Section 113 ❌
4 Section 114 ✅
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
A person is required to file an income tax return for the tax year in accordance with section 114 of the Income Tax Ordinance, 2001.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 114. Return of Income - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
17
Question 17 of 52 Minimum Tax
Basic
📖 Section 113. Minimum tax on the income of certain persons - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with Minimum Tax on Turnover ?
1 Section 110 ❌
2 Section 111 ❌
3 Section 112 ❌
4 Section 113 ✅
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
This section applies to resident companies, permanent establishments of non-resident companies, individuals, and associations of persons having a turnover of Rs. 100 million or more.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 113. Minimum tax on the income of certain persons - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
18
Question 18 of 52 Filing of Return
Basic
📖 Section 115. Persons not required to furnish a return of income - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with Persons Not Required to Furnish a Return of Income ?
1 Section 114 ❌
2 Section 115 ✅
3 Section 113 ❌
4 Section 111 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
A widow, orphan, disabled person, or a non-resident owning immovable property is not required to file a return of income under section 114, solely due to sub-clauses (iii) to (vi) of section 114(1)(b).
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 115. Persons not required to furnish a return of income - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
19
Question 19 of 52 Advance Tax – Transitional Phase
Basic
📖 Section 236Y.Advance tax on persons remitting amounts abroad - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with Advance tax on persons remitting amounts abroad through credit or debit or prepaid cards ?
1 Section 236Y ✅
2 Section 236 ❌
3 Section 235 ❌
4 Section 233 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Advance tax is collected by the bank on foreign payments made through debit, credit, or prepaid cards at the time of remittance.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 236Y.Advance tax on persons remitting amounts abroad - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
20
Question 20 of 52 Advance Tax – Transitional Phase
Basic
📖 Section 235. Electricity Consumption - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with Electricity Consumption ?
1 Section 233 ❌
2 Section 234 ❌
3 Section 236 ❌
4 Section 235 ✅
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Advance tax will be collected on the electricity bills of commercial, industrial, and domestic consumers.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 235. Electricity Consumption - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.

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