Deduction / Payment of Tax Chapter- 23
Q.4 (a) Spring 2011 The tax collected on imports by large import houses is considered as a final tax unless
they fulfill certain conditions specified under the Income Tax Ordinance, 2001. You are required to list those
conditions.
Q.NO. 4(b) Spring 2011 Every taxpayer whose income was charged to tax for the latest tax year is liable to
pay advance tax in the manner prescribed under the Ordinance, Specify the incomes which are not
considered for the purpose of ascertaining advance tax, under the Income Tax Ordinance, 2001.
Q.NO. 4(c) Spring 2011 Mr. Laiq is an accountant in an association of persons and wants to pay advance
tax for the first quarter of the year. Under the provisions of Income Tax Ordinance, 2001 advise him about
the method of computing the amount of advance tax.
Q.NO. 4(b) Spring 2010 Hanif Limited (HL) has commenced its commercial business operations with effect
from January 1, 2010. Since no assessment of HL has yet been finalized, the management is of the view
that HL is not required to pay any quarterly advance tax.
Required:
(i) Discuss the management’s point of view under the Income Tax Ordinance, 2001.
(ii) What are the consequences of non-payment of advance tax?
Q.NO. 4(c) Spring 2010 On February 15, 2010 Income Tax Department initiated proceedings against
Zaman Enterprises (Private) Limited (ZEL) for monitoring of withholding taxes. After examining the
statements filed up to January 2010 and the information submitted by ZEL, the Commissioner Inland
Revenue has issued a show cause notice in respect of the following:
(i) No tax was deducted on payments of Rs. 5.5 million made to Shahid and Co. who is one of the main
suppliers of packing materials to ZEL. Shahid and Co. imports and sells the imported products in local
market in the same condition in which they are imported.
(ii) ZEL deducted withholding tax from the payments made to Mansoor Sons against supplies of various
accessories. However, withholding tax was deducted on amount excluding sales tax of Rs. 192,000.
(iii) Rs. 50,000 was paid to Mujahid Engineering as advance against services but no tax was deducted at
the time of payment.
(iv) ZEL deducted tax at the rate of 10% from payment of commission to its sales staff.
Required: With respect to each of the above transactions, comment on ZEL’s position including
consequences (if any) in the light of ITO, 2001.
Q.NO. 6(b) Autumn 2009 List the prescribed persons as specified by the Income Tax Ordinance, 2001
who are required to deduct tax while making payment for supply of goods.
Q.NO. 3(a) Spring 2009 Advance tax collected by the Collector of Customs is considered as final tax on
the income of the importer arising from imports except in certain situations. You are required to list such
exceptions.
Q.NO. 3(a) Spring 2008 AAS (Pvt.) Ltd was incorporated on July 1, 2006 and commenced commercial
operations in the same month. It suffered losses in the first year of its operations. Briefly explain how the
company should determine the amount of advance tax to be paid (if any) in the tax year 2008.
Q.NO. 5(b) Autumn 2008 Quarterly advance tax payable under section 147 is computed on the basis of
estimated taxable income. Prepare a list of various types of income which are not taken into consideration
while calculating the amount of advance tax.
Q.NO. 3(b) Autumn 2007 Every prescribed person is required to deduct tax while making payments on
account of sale of goods, rendering of services and execution of contracts. Specify any seven exceptions to
this rule.
Every tax payer, whose income was charged to tax for the latest tax year, is liable to pay advance tax in
accordance with the ITO, 2001. You are required to list down the incomes which are excluded for the
purpose of calculating advance tax.
Q.NO. 3 Autumn 2005 What is understood by the term, ‘own estimate’ in the context of quarterly advance
tax payment by an assessee. Explain the implications of an incorrect estimate by the assessee.