CAF-2 · Chapter 5 · Question 8 of 10
An employee received a substantial Golden Handshake payment upon termination of employment. Under Section 12(6), the employee has the option to have this amount taxed at:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) The average rate of tax paid over the three preceding tax years.
Explanation
An employee receiving compensation on termination (including a golden handshake) may elect to have the amount taxed at the average rate of tax calculated over the three preceding tax years.
More Salary MCQs
- Q10In the case of a Recognized Provident Fund, what is the exemption limit for the employer's contribution to the fund?
- Q1Under the Income Tax Ordinance, 2001, what is the basis of chargeability for income under the head "Salary"?
- Q2An employee incurred expenses on travelling for the employer's business and was paid a specific allowance solely to cover those official…
- Q3Mr. Zaid is provided with a rent-free accommodation by his employer. His basic salary is Rs. 120,000 per month, but his minimum of time…
- 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…