Deduction / Payment of Tax Chapter- 23
ICMAP PAST PAPERS THEORECTICAL QUESTIONS
Q. NO. 3 Autumn 2016
(c) Execution of a contract with a non-resident person attracts advance income tax at the time of
making payment by the taxpayer to the non-resident person. Describe the three types of
contracts on which the deduction of tax is required by the taxpayer making payment to a non-
resident person, as prescribed under section 152 (1A) of the Income Tax Ordinance, 2001.
Q.NO.3 August 2014 The Finance Bank Limited (FBL) has remitted Rs. 700,000 as a commission to
Pakistan Branch of M/s Technocom Inc., a non-resident Singapore based company. Although in the
agreement it is clearly mentioned that the applicable income tax can be deducted from the payment, but
FBL remitted full amount without any deduction of tax under Section 152(2) of the Income Tax Ordinance,
2001.
Required:
Elaborate the provisions contained in section 152 (3) of the Income Tax Ordinance, 2001 which may allow
the payment made by FBL without any deduction of tax.
Q. NO.2(b) February 2014 Macro Trading (MT) is a sole proprietorship owned by Mr. Waheed. He is
engaged in the manufacturing and supplying of herbal products for last many years. His taxable income for
the year ended June 30, 2013 was Rs.1,000,000. Mr. Waheed’s Tax Advisor apprised him to pay
advance tax for the tax year ended June 30, 2014.
Required Keeping in view his Tax Advisors advice, Mr. Waheed need explanation with regards to the
following queries as per the Income Tax Ordinance, 2001:
(i) How the amount of advance tax liability would be calculated for the tax year ended June 30, 2014?
(ii) What would be the “period of quarter” and “last date for payment of advance tax” under
each of the following quarter namely:
Serial No. Quartered Ended Period of Quarter Last Date for Payment of Advance Tax
1 September??
2 December??
3 March??
4 June??
(iii) As amount of advance tax is calculated on the basis of the assessed tax liability of the latest tax year,
which sources of income shall not be included while computing taxable income and tax liability of the
latest tax year?
If Mr. Waheed is of the opinion that his tax liability for the current year is less than the previous year, then
how will he adjust the amount of his advance tax installments?
Q. No. 2(a) February 2013 As per section 170 of the Income Tax Ordinance, 2001 who is entitled to claim
refunds and when does an application for a refund become due?
Q. No. 3(a) February 2013 Write short answers of the following questions:
(i) What is the condition for an 'individual' and 'association of persons' to qualify as a 'prescribed person' for
the purpose of making deduction at source while making payment under the provisions of section 153 of
the Income Tax Ordinance, 2001?
Q.3 (b) (i) APRIL 2012 In the light of Rule 87 of the Income Tax Rules, 2002 describe the procedure for
the registration of income tax practitioners.
(iii) What is the duration of the registration of a person as an Income Tax Practitioner under rule 88 of the
Income Tax Rules, 2002?