Why must a taxpayer maintain records supporting income and deductions?
Correct answer: A. To substantiate figures reported in the tax return
- A. To substantiate figures reported in the tax return
- B. To guarantee exemption from every tax
- C. To replace the need to file a return
- D. To convert private expenses into business expenses
Explanation
Records provide evidence for receipts, expenses, assets and other amounts reported in a return. Keeping records does not itself create an exemption or make private expenditure deductible.
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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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