CAF-2 · Chapter 5 · Question 2 of 10
An employee incurred expenses on travelling for the employer's business and was paid a specific allowance solely to cover those official duties. How will this allowance be treated for tax purposes?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) It will be completely excluded from the taxable salary.
Explanation
Any allowance provided to an employee is included in salary, excluding any allowance solely expended in the performance of duties of employment.
More Salary MCQs
- Q4A company provided a leased 1300cc car to its marketing manager for both official and private use. The fair market value of the car at the…
- Q5ABC Ltd. granted a loan of Rs. 2,000,000 to an employee on 1 July 2025 at a concessional interest rate of 4% per annum. The benchmark rate…
- Q6Mr. Tariq's employer agreed to bear the tax chargeable on his salary. According to Section 12(3) of the Income Tax Ordinance, 2001, how…
- Q7Mr. Fahad resigned from his job and received Rs. 500,000 from an unapproved gratuity fund. He has never received any gratuity before. What…
- Q8An employee received a substantial Golden Handshake payment upon termination of employment. Under Section 12(6), the employee has the…