A taxpayer has paid more tax during the year than the final tax liability. What is the usual treatment of the excess amount?
Correct answer: A. It may be refunded or adjusted against another liability
- A. It may be refunded or adjusted against another liability
- B. It automatically becomes a deductible business expense
- C. It is converted into customs duty
- D. It is permanently forfeited in every case
Explanation
An excess payment may generally be claimed as a refund or adjusted against a later or other tax liability, subject to verification and legal procedures. It is not automatically treated as an expense or forfeited.
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About Taxation
Taxation covers the principles used to assess and collect taxes from individuals, businesses and transactions, with emphasis on income tax and sales tax concepts in Pakistan. Questions involve taxable income, exemptions, deductions, tax liability, withholding, returns, assessment, tax avoidance versus evasion, and the distinction between direct and indirect taxes.
Practise Taxation
50 free Taxation MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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