In taxation, what does the term tax base mean?
Correct answer: B. The amount on which tax is calculated
- A. The date on which tax becomes due
- B. The amount on which tax is calculated
- C. The authority that collects the tax
- D. The penalty imposed for late payment
Explanation
The tax base is the income, value, transaction, or other measurable amount to which a tax rate is applied. A due date and a penalty are parts of tax administration, not the tax base.
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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.
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