When an employer deducts income tax from an employee's salary before paying it, the employer is acting primarily as what?
Correct answer: D. A withholding agent
- A. A tax audit tribunal
- B. A tax appellate authority
- C. A registered sales tax supplier
- D. A withholding agent
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.
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
In taxation, what is meant by the incidence of a tax?
Which statement best describes a zero-rated supply for sales tax purposes?
Under Pakistan's ordinary income tax system, the standard tax year ends on which date?
What does depreciation generally represent when computing business income?
Which income category generally arises from disposing of a capital asset for more than its relevant cost?
If a tax authority conducts an audit of a taxpayer's records, its main purpose is to: