When an employer deducts income tax from an employee's salary before paying it, the employer is acting primarily as what?
Correct answer: A. A withholding agent
- A. A withholding agent
- B. A tax appellate authority
- C. A registered sales tax supplier
- D. A tax audit tribunal
Explanation
An employer that deducts tax from salary and remits it to the government acts as a withholding agent. The employee remains the person whose income is being taxed, while the employer performs the collection function.
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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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