Tax Book 2023

Tax Credits Chapter- 15

MULTIPLE CHOICE QUESTIONS

Q.1. Foreign source income of a resident tax payer shall be chargeable to tax except.

(a) Salary income

(b) Property income

(c) Business income

(d) Capital gain

Q.2. Foreign tax credit is allowed for an amount equal to.

(a) Foreign income tax paid.

(b) Pakistan income tax payable.

(c) Lesser of ‘a’ and ‘b’

(d) Higher of ‘a’ and ‘b’.

Q.3. Foreign tax credit is allowed maximum up to ___ of income tax liability.

(a) 25%

(b) 50%

(c) 100%

(d) None of these

Q.4. Excess amount of foreign tax credit is only____.

(a) Refunded.

(b) Carried Back.

(c) Carried forward.

(d) None of these.

Q.5. In order to avail the foreign tax credit the foreign income tax must be paid within _____ years after the
year in which income is earned.
(a) One year.
(b) Two years.
(c) Three years.
(d) Five years.

Q.6. Tax credit is allowed on__.

(a) Net foreign source income.

(b) Gross foreign source income.

(c) None of these.

Q.7. A person sustaining foreign source loss is allowed to ____ of such loss.

(a) set off against Pakistan source income

(b) set off against foreign source of income

(c) Both of these

Q.8. ____tax credit is allowed before any other tax credit.

(a) Foreign tax credit.

(b) Tax credit for donations.

(c) Tax credit for tax already deposited.