Tag Archives: Important-Questions

Q: Define “Federal Board of Revenue”; explain its powers and functions in detail. Federal Board of Revenue (FBR) Introduction The old name of federal board of revenue (FBR) is central board of revenue (CBR). Income tax ordinance, 2001 uses the word ‘Board’ for FBR and CBR. Board is the highest tax authority in Pakistan. It has the powers to exercise …

Question: Discuss the composition of “APPELLATE TRIBUNAL INLAND REVENUE”, what are the functions performed by it? Answer: APPELLATE TRIBUNAL INLAND REVENUE: APPELLATE TRIBUNAL INLAND REVENUE is the second court of appeal. The Federal Government is the appointing authority of the APPELLATE TRIBUNAL. The taxpayer or the Commissioner Inland Revenue, if not satisfied with the decision of the Commissioner Inland Revenue (Appeals) can …

Question: Define set off of losses. How different losses can be set off under the provisions of income tax ordinance 2001? Answer:  Head/Sources of income: According to income tax ordinance 2001, there five heads of income i.e. income from salary, income from property, income from business, Capital gain, income from other source. A person may drive income from all these …

Question: Explain procedure of carry forward of losses under the provision of income tax ordinance 2001? How different losses can carry forward? Carry Forward of Losses: Sometime a taxpayer sustains a loss and fails to set off the whole amount of loss against the income of the same year. It may be due insufficiency of income under the same source …

Define “Commissioner Inland Revenue”; explain its powers and functions in detail. Commissioner Inland Revenue A person appointed officially for a particular zone to supervise the collection of taxes, including income tax, capital gains tax and corporation tax. Commissioner Inland Revenue has a very important place in income tax department. He has both executive and judicial powers. He oversees the performance and functions of all the income tax authorities working …

Question: Define income from business?  What expenses are not admissible for tax purpose under the head business OR explain un-admissible deductions under the head income from business? Answer:  Income from business-section-18 Income from business is a 3rd source of income from which a person can derive income. Income from business is chargeable to tax under section-18 of income tax ordinance 2001.Let us define business …

Question: Define and differentiate between capital and revenue expenditure according to business taxation point of view.          ‘OR’ Why and how we differentiate between capital and revenue expenditure for tax point of view. CAPITAL AND REVENUE EXPENDITURES: Capital and revenue expenditures have different accounting treatment in the books of account. Financial statements cannot present fair view unless capital …

Question: Define Capital and Revenue Receipt. How we can differentiate between capital and revenue receipts? Answer:  CAPITAL RECEIPT An inflow of money from the sale of fixed asset or on account of capital by owner or long-term loan from the bank etc. is called capital receipt. REVENUE RECEIPT An inflow of money from the sale of goods or services in …

Question: EXPLAINS DEPRECIATION WHAT ARE THE CONDITIONS RULES WHICH ARE LAID DOWN UNDER THE ORDINANCE FOR DEPRECIATION ALLOWANCE? Answer : DEPRECIATION A gradual decrease in value of asset due to use or wear and dear is known as depreciation. Generally the term depreciation also includes amortization and depletion. Depreciation of fixed tangible asset such as building, plant and machinery. Amortization of …

 Question: What is income from business; explain scope and tax-ability of income from business? Answer:    Income from business-section-18 Income from business is a 3rd source of income and it is chargeable to tax under sectin-18 of income tax ordinance 2001. Let us define business and then income from business. Business: Business includes any trade, commerce, manufacture, profession, vocation or adventure or …