CAF-2 · Chapter 4 · Question 13 of 15
XYZ Ltd. sold a second-hand asset to an associated company. The written-down value of the asset was Rs. 350,000, and the sale price recorded in their internal books was Rs. 200,000. However, the open market value of the asset at the time of sale was determined to be Rs. 250,000. What value will be considered for tax purposes?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) Rs. 250,000
Explanation
The Fair Market Value (FMV) of any property, asset, or service at a particular time shall be the price it would ordinarily fetch on sale or supply in the open market. Therefore, the FMV of Rs. 250,000 will be adopted.
More Basic Concepts of Taxation MCQs
- Q15Mr. 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…
- Q1ABC Ltd. shifted its tax year from the normal tax year (ending June 30, 2026) to a special tax year ending September 30. What is the…
- Q2If a company is allowed to adopt a special tax year spanning from 1st April 2025 to 31st March 2026, how will this tax year be denoted?
- Q3Mr. X received a dividend of Rs. 100,000, which was subject to a Zakat deduction of Rs. 10,000 under the Zakat and Ushr Ordinance, 1980…
- Q4Mr. Ali, an individual with a taxable income of Rs. 1,400,000, paid tuition fees for his two children amounting to Rs. 400,000 during the…