CAF-2 · Chapter 13 · Question 15 of 15
When calculating foreign-source income and adjusting losses, how is a foreign-source speculation business treated?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) It is treated as a separate head of income distinct from normal business income.
Explanation
Income derived by a taxpayer from carrying on a speculation business shall be treated as a separate head of income. Section 67 (apportionment of deductions) applies on the basis that foreign-source income chargeable under a head of income, including a speculation business, is a separate head of income.
More Foreign Source Income of a Resident Person MCQs
- Q2If a resident taxpayer derives foreign-source income from multiple heads (e.g., Business and Property), how must this income be computed?
- Q3What is the maximum amount of Foreign Tax Credit (FTC) a resident taxpayer can claim under Section 103?
- Q4For the purpose of calculating the Foreign Tax Credit, how is the "Pakistan tax payable" in respect of foreign-source income determined?
- Q5If a taxpayer’s available Foreign Tax Credit exceeds their Pakistan tax payable on that foreign income for the year, what is the treatment…
- Q6To successfully claim a Foreign Tax Credit for a specific tax year, what is the maximum time limit within which the foreign income tax…