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Income Tax MCQs Pakistan — 200+ Practice Questions

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ITO
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21
Question 21 of 52 Income from Other Sources – Nature of Income
Basic
📖 Section 39(1)(c). Income from Other Sources - ITO, 2001
Which of the following incomes is chargeable to tax under the head Income from Other Sources ?
1 Salary received from an employer ❌
2 Rental income from property ❌
3 Capital gain on sale of immovable property ❌
4 Profit on debt ✅
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Any profit on debt earned by a person from a bank or a financial institution is treated as income from other sources.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 39(1)(c). Income from Other Sources - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
22
Question 22 of 52 Default Surcharge
Basic
📖 Section 205. Default Surcharge - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with default surcharge?
1 Section 210 ❌
2 Section 205 ✅
3 Section 204 ❌
4 Section 203 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Default surcharge is imposed on unpaid tax, penalty, or other specified amounts at 12% or KIBOR plus 3% per annum, calculated from the due date until payment.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 205. Default Surcharge - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
23
Question 23 of 52 Deduction of Tax at Source
Basic
📖 Section 149. Salary - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from salary?
1 Section 149 ✅
2 Section 150 ❌
3 Section 151 ❌
4 Section 152 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
The Employer is responsible for deducting tax from the employee’s salary and depositing it into the government treasury.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 149. Salary - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
24
Question 24 of 52 Deduction of Tax at Source
Basic
📖 Section 150. Dividends - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Dividends ?
1 Section 152 ❌
2 Section 150 ✅
3 Section 151 ❌
4 Section 149 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Every person paying a dividend shall deduct tax from the gross amount at the time of payment.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 150. Dividends - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
25
Question 25 of 52 Deduction of Tax at Source
Basic
📖 Section 151. Profit on debt - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Profit on debt ?
1 Section 151 ✅
2 Section 150 ❌
3 Section 148 ❌
4 Section 152 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Every person, bank, or financial institution is required to deduct tax at source on profit on debt and deposit the deducted amount into the government treasury.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 151. Profit on debt - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
26
Question 26 of 52 Deduction of Tax at Source
Basic
📖 Section 154. Export - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Exports ?
1 Section 149 ❌
2 Section 148 ❌
3 Section 154 ✅
4 Section 151 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
The bank shall deduct tax at source at the time the amount is credited.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 154. Export - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
27
Question 27 of 52 Deduction of Tax at Source
Basic
📖 Section 154A. Export of Services - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Exports of Services ?
1 Section 148 ❌
2 Section 154 ❌
3 Section 154A ✅
4 Section 155 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
The bank shall deduct tax at source at the time the amount is credited.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 154A. Export of Services - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
28
Question 28 of 52 Deduction of Tax at Source
Basic
📖 Section 155. Rent of Immovable Property - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Rent of Immovable Property ?
1 Section 155 ✅
2 Section 147 ❌
3 Section 156 ❌
4 Section 152 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Every prescribed person shall deduct tax at source at the time of making payment to the owner.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 155. Rent 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.
29
Question 29 of 52 Deduction of Tax at Source
Basic
📖 Section 152. Payments to non-residents - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Payments to non-residents ?
1 Section 147 ❌
2 Section 148 ❌
3 Section 151 ❌
4 Section 152 ✅
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Every person making payment of royalty or fees for technical services to a non-resident person, which is chargeable to tax, shall deduct tax at source.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 152. Payments to non-residents - ITO, 2001
💡 Why This Matters
Understanding this provision is essential for tax compliance and frequently tested in CA, ICMAP & ACCA Pakistan exams.
30
Question 30 of 52 Deduction of Tax at Source
Basic
📖 Section 156. Prizes and Winnings - ITO, 2001
Which section of the Income Tax Ordinance, 2001 deals with tax deduction at source from Prizes and Winnings ?
1 Section 156 ✅
2 Section 138 ❌
3 Section 147 ❌
4 Section 137 ❌
✅ Correct Answer!
✅
Correct Answer
📝 Explanation
Every person paying a prize on a prize bond, or winnings from a raffle, lottery, quiz, sales promotion scheme, or crossword puzzle shall deduct tax at source.
⚖️ Legal Reference
📖 Income Tax Ordinance, 2001 — Section 156. Prizes and Winnings - 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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