What is the main purpose of withholding tax in Pakistan?
Correct answer: C. To collect tax at the time of payment
- A. To postpone the filing of all returns
- B. To exempt small businesses from taxation
- C. To collect tax at the time of payment
- D. To replace every form of assessment
Explanation
Withholding tax collects tax when specified payments, such as salary, contracts or certain transactions, are made. The amount withheld may later be adjustable or treated as final according to the applicable legal provision.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
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.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Taxation questions
Under the general concept of taxable income, which amount is deducted from total income to determine taxable income?
Which tax is classified as a direct tax because its burden generally falls on the person legally assessed?
Which action is best described as tax evasion?
A registered supplier charges sales tax on a taxable sale. What is this charged amount generally called for the supplier?
Which business expense is generally allowable as a deduction when computing business income under the ordinary principle of business taxation?
What is the usual effect of exempt income when taxable income is calculated?