fin623 Taxation Management Mid Term Subjective Papers

FIN623 CURRENT MIDTERM PAPER

Total Question was 32
28 MCQ
And 4 Subjective
2 for 3 Num
And 2 for 5 Num
And the Subjective question was these…..

1) What is Individual resident status explain its different points?

2)If Mr. Kamal resident of Pakistan suffered a foreign loss against the income
received from foreign country in tax year. What is the treatment of such
foreign loss? Which section deals this kind of loss? Such losses can be
carried forward up to how many years?

3)What is association of person and how profit will be distributed among partners?

4)Profit on debt earned by a non-resident person is exempt from tax under clause (77) of Part I of the second schedule. Is this exemption only available to “Individuals” as reference has been made to persons being citizens of Pakistan or otherwise? Provide the details of this clause.

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FIN623 MIDTERM PAPER 2011 ALL IN 1 THREAD
Fin 623 my paper
There were 23 total questions
mcq`s were from all past papers
Five were subjective
Q1
Section 45 pride of performance president award? Marks 3
Q2
If Mr. Kamal resident of Pakistan suffered a foreign loss against the income
received from foreign country in tax year. What is the treatment of such
foreign loss? Which section deals this kind of loss? Such losses can be
carried forward up to how many years? 5marks
Q3
Tax treatment of utilites paid by a abc company to an employee in tax year 2009?

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RE: FIN623 MIDTERM PAPER 2011 ALL IN 1 THREAD
Total Question was 32*
*28 MCQ*
*And 4 Subjective*
*2 for 3 Num*And 2 for 5 Num*
*And the Subjective question was these…..*

*1)* What is Individual resident status explain its different points?*
2)*If Mr. Kamal resident of Pakistan suffered a foreign loss against the
income received from foreign country in tax year. What is the treatment of such Foreign loss? Which section deals this kind of loss? Such losses can be carried forward up to how many years?*

*3)*What is association of person and how profit will be distributed among partners?*

*4)* Profit on debt earned by a non-resident person is exempt from tax under clause (77) of Part I of the second schedule. Is this exemption only
available to “Individuals” as reference has been made to persons being
citizens of Pakistan or otherwise? Provide the details of this clause.*

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FIN 623 Midterm Paper

28 ==> MCQ
02 ==> 3 Number Questions
02 ==> 5 Number Questions

Subjective question were.…..

Question # 1: What is Individual resident status explain its different points? (3 Marks)

Question # 2: If Mr. Kamal resident of Pakistan suffered a foreign loss against the income received from foreign country in tax year. What is the treatment of such foreign loss? Which section deals this kind of loss? Such losses can be carried forward up to how many years? (3 Marks)

Question # 3: What is association of person and how profit will be distributed among partners? (5 Marks)

Question # 4: Profit on debt earned by a non-resident person is exempt from tax under clause (77) of Part I of the second schedule. Is this exemption only available to “Individuals” as reference has been made to persons being citizens of Pakistan or otherwise? Provide the details of this clause. (5 Marks)
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Question # 1: Under which circumstances business income of a non-resident person shall be considered as Pakistan-source income? (Marks 3)

Question # 2: Determine total income of Mr. Sharif, a non-resident individual for tax year 2009. Relevant data is given below:
i. Share of profit received in Singapore from a business controlled through a permanent establishment in Pakistan Rs 200,000.
ii. Salary income of Mr. Sharif from an employment in Pakistan Rs600,000
iii. Remittance received from China Rs 400,000
iv. Profit on debt received on deposits kept with a bank in Pakistan Rs 50,000
(5 Marks)

Question # 3: What is Employeement under the section of Income Tax Ordinance 2001? (3 Marks)

Question # 4: Describe the Tax tretement for the agricultural income that is being used by the cultivator as the raw material for his business? (5 Marks)
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OBJECTIVE FROM THE PAST PAPERS

29.Question No: 30 ( Marks: 3 )
Under which conditions any royalty is treated as Pakistan source income if it
is paid by: (3)
i. Resident person
ii. Non-resident person
30.Is award to a person by the president of Pakistan taxable? also write the section of those awards (3)
31.Explain Aid agreement w.r.t salary income (5)
32.Determine total income of Mr. Sharif, a non-resident individual for tax year
2009. Relevant data is given below: (5)
i. Share of profit received in Singapore from a business controlled
through a permanent establishment in Pakistan Rs 200,000.
ii. Salary income of Mr. Sharif from an employment in Pakistan
Rs600,000
iii. Remittance received from China Rs 400,000
iv. Profit on debt received on deposits kept with a bank in Pakistan Rs
50,000
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saima but

1) What is Individual resident status explain its different points?

2) If Mr. Kamal resident of Pakistan suffered a foreign loss against the income

received from foreign country in tax year. What is the treatment of such

foreign loss? Which section deals this kind of loss? Such losses can be

carried forward up to how many years?

3)

What is association of person and how profit will be distributed among partners?

4)

Profit on debt earned by a non-resident person is exempt from tax under clause (77) of Part I of the second schedule. Is this exemption only available to “Individuals” as reference has been made to persons being citizens of Pakistan or otherwise? Provide the details of this clause.

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Under which conditions any royalty is treated as Pakistan source income if it
is paid by: (3)

Answer:
i. Resident person
ii. Non-resident person
A royalty shall be Pakistan-source income if it is:
• Paid by resident person, except where the royalty is payable in respect of any right,
property, or information used, or services utilized for the purposes of a business carried on
by the resident outside Pakistan through a permanent establishment; or
• Borne by a permanent establishment in Pakistan of a non-resident person

Is award to a person by the president of Pakistan taxable? also write the section of those awards (3)

Answer:
Section 45 President’s Honour
(1) Any allowance attached to any Honour, Award, or Medal awarded to a person by the President of
Pakistan shall be exempt from tax under this Ordinance.
(2) Any monetary award granted to a person by the President of Pakistan shall be exempt from tax under
this Ordinance.

.Explain Aid agreement w.r.t salary income (5)

Answer:
Any salary received by an individual (not being a citizen of Pakistan) shall be exempt from tax
under this Ordinance to the extent provided for in an Aid Agreement between the Federal
Government and a foreign government or public international organization, where:
(a)the individual is either not a resident individual or a resident individual solely by reason of the
performance of services under the Aid Agreement;
(b) if the Aid Agreement is with a foreign country, the individual is a citizen of that country; and
© The salary is paid by the foreign government or public international organization out of funds
or grants released as aid to Pakistan in pursuance of such Agreement.

Determine total income of Mr. Sharif, a non-resident individual for tax year
2009. Relevant data is given below: (5)
i. Share of profit received in Singapore from a business controlled
through a permanent establishment in Pakistan Rs 200,000.
ii. Salary income of Mr. Sharif from an employment in Pakistan
Rs600,000
iii. Remittance received from China Rs 400,000
iv. Profit on debt received on deposits kept with a bank in Pakistan Rs
50,000

Solution: p#33

Particulars Gross total income if non-resident

Share of profit received 200,000
Salary income 600,000
Remittance received NIL
Profit on debt received NIL
total income 800,000

Question No: 30 ( Marks: 3 )
If Mr. Kamal resident of Pakistan suffered a foreign loss against the income
received from foreign country in tax year. What is the treatment of such
foreign loss? Which section deals this kind of loss? Such losses can be
carried forward up to how many years?
Answer
Foreign losses Sec.104: Deductible expenditures incurred by a person in deriving foreign source
income chargeable to tax under a head of income shall be deductible only against that income.
Foreign losses carried forward up to 6 years
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Mr. Irfan resident of Pakistan received salary from UK. He has also paid tax on his
salary from UK as per the tax laws prevailing there. What will be the tax treatment
of his salary as a Pakistani resident? Which section of the income tax ordinance
deals this scenario?
Answer Foreign-Source Salary Income [102]
Mr. Irfan’s salary from UK would be exempted from tax, because he has paid tax on his salary from UK. Under Foreign-Source Salary Income [section102] foreign source salary income of a resident individual will be exempt from tax, if he has paid foreign income tax in respect of such income. Payment of foreign tax means that the employer has deducted the tax at source and deposited the same to the revenue authorities of the country in which employment was exercised.

Q2: profit on debt in which conditions will be Pakistan source
of income.
1. Resident person (25) page
2-Non Resident Person (25) page.
Answer
Profit on debt shall be Pakistan-source income if it is-
(1) Paid by a resident person, except where the profit is payable in respect of any debt used for the purposes of a business carried on by the resident outside Pakistan through a permanent establishment; or
(2) Borne by a permanent establishment in Pakistan of a non-resident person.

3) Explain the two terms with their relevant sections (5 marks)
Resident individual (page 23,26,27)
Resident AOP(27,36,)
Answer
Resident Individual (Section 82)
• An individual shall be a resident individual for a tax year if the individual:
• is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and [eighty-three] days or more in the tax year; or
• is an employee or official of the Federal Government or a Provincial Government posted abroad in the tax year.
Resident Association of Persons Sec. 84
An association of persons shall be a resident association of persons for a tax year if the control and management of the affairs of the association is situated wholly or partly in Pakistan at any time in the year.

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najaf
My paper 18/05/2011

28 mcqs all from past papers

Q1. Resident and non resident person (Marks 3)
Q2. Returning Expatriate (Marks 3)
Q3. Royalties (Marks 5)
Q4. Profit on debt

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samiya sis
My Today FIN630 20 MAY 2011
Q: What you meant by Returning Expatriate? Explain Tax treatment under section 51?
Q: Treatment of Foreign loss of a resident person Mr Basit?section?
Q: Resident Individual and AOP?
Q: Bench Mark Rate?
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RE: FIN623 MIDTERM PAPER FALL 2011 MONTH OF MAY
Fin 623 my paper
There were 23 total questions
mcq`s were from all past papers
Five were subjective
Q1
Section 45 pride of performance president award? Marks 3
Q2
If Mr. Kamal resident of Pakistan suffered a foreign loss against the income
received from foreign country in tax year. What is the treatment of such
foreign loss? Which section deals this kind of loss? Such losses can be
carried forward up to how many years? 5marks
Q3
Tax treatment of utilites paid by a abc company to an employee in tax year 2009?
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29.Question No: 30 ( Marks: 3 )
Under which conditions any royalty is treated as Pakistan source income if it
is paid by: (3)
i. Resident person
ii. Non-resident person
30.Is award to a person by the president of Pakistan taxable? also write the section of those awards (3)
31.Explain Aid agreement w.r.t salary income (5)
32.Determine total income of Mr. Sharif, a non-resident individual for tax year
2009. Relevant data is given below: (5)
i. Share of profit received in Singapore from a business controlled
through a permanent establishment in Pakistan Rs 200,000.
ii. Salary income of Mr. Sharif from an employment in Pakistan
Rs600,000
iii. Remittance received from China Rs 400,000
iv. Profit on debt received on deposits kept with a bank in Pakistan Rs
50,000
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Question # 1: Under which circumstances business income of a non-resident person shall be considered as Pakistan-source income? (Marks 3)

Question # 2: Determine total income of Mr. Sharif, a non-resident individual for tax year 2009. Relevant data is given below:
i. Share of profit received Paper copy from vu thirty nine dot com in Singapore from a business controlled through a permanent establishment in Pakistan Rs 200,000.
ii. Salary income of Mr. Sharif from an employment in Pakistan Rs600,000
iii. Remittance received from China Rs 400,000
iv. Profit on debt received on deposits kept with a bank in Pakistan Rs 50,000
(5 Marks)

Question # 3: What is Employeement under the section of Income Tax Ordinance 2001? (3 Marks)

Question # 4: Describe the Tax tretement for the agricultural income that is being used by the cultivator as the raw material for his business? (5 Marks)
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ubjective Questions are:
Determine total income of Mr. khalid, a resident individual for tax year
2009. Relevant data is given below:
He get salary Rs.400,000.
He get profit on shares from UK Rs. 100,000.
He get remittance from India Rs.360,000. and
he get profit on debt Rs. 650,000. What is his gross total income. (marks : 5)

What is mean by the short-term resident. Identify the tax treatment? (marks : 5)

how differently tax treatment on resident and non resident person? (marks : 3)
Define employment & also mention section? (marks : 3)
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Question No: 31 ( Marks: 5 )
Why the right to acquire share is not chargeable to tax under Employee Share
Scheme section 14. Under what condition the right to acquire share under section
14 is taxable?
Answer:
Employee Share Schemes sec 14:
ƒThe value of a right or option to acquire share under this scheme shall be not chargeable to tax.
ƒWhere shares issued are subject to a restriction on transfer of the shares-
a)no amount shall be chargeable to tax under the head Salary until the earlier of-
i. the time the employee has a free right to transfer the shares; or
ii. the time the employee disposes of the shares &
b)the amount chargeable to tax to the employee shall be fair market value of shares at the time
employee has free right to transfer as reduced be any amount given as consideration for the grant
of a right or option to acquire the shares.
ƒWhere in a tax year an employee disposes of a right or option to acquire shares under an employee
share scheme, the amount chargeable to tax shall include the amount of any gain made on the
disposal computed accordance with the following formula:
A-B
ƒWhere A is the consideration received from the disposal of the right or option.
ƒB is the employee’s cost in respect of the right or option.
Question No: 32 ( Marks: 10 )
What is meant by Fiscal Policy?
Highlight the role of taxes in Fiscal Policy. Differentiate between Budget deficit
and Budget Surplus.

Answer:
What is Fiscal Policy?
Fiscal policy is a discipline that deals with arrangements which are adopted by government to
collect the revenue and make the expenditures so that social and economic stability could be attained /
maintained.
™ Objectives of Fiscal Policy
Economic Development
Raising level of employment (Achieving full employment level)
Influencing consumption patterns
Price stability
Redistribution of income
Removal of deficit in Balance of Payments
™ Instruments of Fiscal Policy
Government Expenditures
Taxes
Deficit Financing
Subsidies
Transfer Payments—like Unemployment Allowances etc.
Sources for Revenue Generation for State
ƒ Taxes, Tariffs
ƒ Internal & External Borrowing
ƒ Penalties & Fines
ƒ Aids & Grants
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Question No: 31 ( Marks: 5 )
Why Government levy tax on Person? What are the important elements that take
into consideration while levying tax?
Answer:
™ Taxes Vs Fees:
Taxes are compulsory levy and it is the legal obligation of the person to pay the amount of tax which is required to pay under the law, where as payment of fee is the discretion of any person and when a fee is paid, the person becomes an entitled to claim counter benefits.
™ Taxes are important instrument of Fiscal Policy.
Question No: 32 ( Marks: 10 )
Determine Gross total income of Mr. Imran in the light of following particulars
information pertaining to tax year 2008.
a. Dividends received in UK on 20th Aug 2008 from a Pakistani resident
company: amounting Rs. 50,000.
b. Interest on Swiss Bonds (one-third is received in Pakistan) Rs. 60,000.
c. Pension from Pakistan Government but received in New York Rs. 25,000.
d. Rent for tax year 2008 of a house property situated in New York and
received there on 01-01-2008; Rs.500,000.
e. Income from agriculture in New York received there but later on remitted
to Pakistan Rs.80,000.
Find out gross total income of Mr. Imran, if he is:
a. Pakistani resident
b. Non– resident
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Question No: 31 ( Marks: 5 )
Define Income that is charged to tax under section 2(9).
Answer:
Business Defined Section 2(9)
“Business includes any trade, commerce, manufacture, profession, vocation but doesn’t include employment”
Following incomes (except exempt income) shall be charged to tax under the head ‘Income from Business’.
a)Profits & Gains from any business in a tax year.
b)Income derived from any trade, profession, sale of goods or provision of any services.
c)Income from hire or lease of tangible movable property.
d)FMV of Perquisites derived by a person by virtue of business relationships.
e)Management Fee derived by a management company.
Income from Business also includes:
• Any profit on debt derived by a person. (it is only applicable to such person, whose is business is to
derive such income. e.g.; a banking company)
• Any amount received by schedule bank from mutual fund, as share of profit.
• Profit earned on debts in course business shall be chargeable to ‘income from business’.
• Income on leasing by lessor, being banks, leasing companies etc.
Income derived from any trade, profession, sale of goods or provision of any services.
• Income from hire or lease of tangible movable property
• FMV of Perquisites derived by a person by virtue of business relationships.
• Management Fee derived by a management company
Question No: 32 ( Marks: 10 )
Determine the legal status of the following persons under section 80 of the
ordinance.
1.  Virtual University of Pakistan (company)
2.  A joint family of Mr. Arun (a Hindu), Comprising Mr. Hamel, His sons
Mr. Kumar & Mr. Deepak (Hindu undivided family)
3 .  Government of Punjab, Pakistan (company)
4. Edhi Welfare Trust  (company)
5.  Federal Government (person)
6 .  Mr. Suleman & his wife Joint Owners in a House (Association of persons)
7.  Alpha Cooperative Housing Society (company)
8.  Mr. Ali & Babar Joint Owners in Building (Association of persons)
9.  Mr. Imran Serving as a Manager in a Textiles Company (Individual)
10. Habib Modaraba (company)
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Question No: 29 ( Marks: 3 )
What is meant by reduction in tax liability? Give an example from Income Tax ordinance 2001?
Question No: 30 ( Marks: 3 )
If Mr. Kamal resident of Pakistan suffered a foreign loss against the income received from foreign country in tax year. What is the treatment of such foreign loss? Which section deals this kind of loss? Such losses can be carried forward up to how many years?
Question No: 31 ( Marks: 5 )
Define the following under the Income Tax Ordinance 2001 with their respective sections:
a. Resident Individual
b. Resident Associations of Persons
Question No: 32 ( Marks: 5 )
If Mr. Basit resident of Pakistan suffered a foreign loss against the income received from foreign country in tax year 2008-09. What is the treatment of such loss? Which section deals this kind of loss?
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Question No: 29 ( Marks: 3 )
What is meant by reduction in tax liability? Give an example from Income Tax ordinance 2001?
Question No: 30 ( Marks: 3 )
Define the employment as per its respective sections.
Question No: 31 ( Marks: 5 )
Define the following under the Income Tax Ordinance 2001 with their respective sections:
a. Resident Individual
b. Resident Associations of Persons
Question No: 32 ( Marks: 5 )
Mr. Bajwa resident of Pakistan received salary from UK. He claimed that he has also paid foreign tax in respect of his salary in UK. How his claimed will be verified and what is the tax treatment of his salary under which section of the income tax ordinance deals this scenario?
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: An association of persons named M/S Khan and sons has its
most of its branches in Pakistan is it sufficient to be resident
AOP or not?m5

Define the following their respective sections: m3
Employee
Employer
salary

Is the income of non- resident and resident taxed in Pakistan.define m5

define royalty under the ordience 2001.m5
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Collected By The S Team