CAF-2 · Chapter 4 · Question 15 of 15
Mr. XYZ received a consultancy fee of US $500 on 14 April 2026. He held onto the dollars and later exchanged them into Pakistani Rupees on 20 April 2026. According to Section 71, which exchange rate must be used to convert the US $500 into Rupees for computing his taxable income?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) The State Bank of Pakistan rate applying on the date the amount was taken into account/received (14 April 2026).
Explanation
If an amount is in a foreign currency, it shall be converted to the Rupee at the State Bank of Pakistan rate applying on the date the amount is taken into account for the purposes of the Ordinance (i.e., the date of receipt, 14 April 2026).
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