Under the general concept of taxable income, which amount is deducted from total income to determine taxable income?
Correct answer: B. Allowable deductible allowances
- A. Tax collected at source
- B. Allowable deductible allowances
- C. Tax paid in a previous year
- D. Capital introduced into business
Explanation
Taxable income is generally determined by reducing total income by permitted deductions or deductible allowances. Tax collected at source is adjusted against tax payable, while capital introduced is not a deduction from income.
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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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