What is meant by advance tax?
Correct answer: C. Tax paid before the final liability is determined
- A. Tax imposed on imported machinery
- B. Tax charged only after a tax audit
- C. Tax paid before the final liability is determined
- D. Tax refunded before income is earned
Explanation
Advance tax is paid during or before the relevant tax period on the basis of expected or estimated liability. It is later adjusted against the taxpayer's final liability where the applicable law provides.
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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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