CA Taxation Revision Questions 01

Which of the following is not one of the principles of taxation?

• Equity

• Complexity

• Certainty

• Simplicity

Which authority is responsible for collecting Income Tax in Sri Lanka?

• Sri Lanka Customs

• Department of Inland Revenue

• Provincial Councils

• Department of Excise

What is the formula for Taxable Income according to Section 3 of the Inland Revenue Act?

• Assessable Income + Qualifying Payments and Reliefs

• Assessable Income × Qualifying Payments and Reliefs

• Assessable Income – Qualifying Payments and Reliefs

• Assessable Income ÷ Qualifying Payments and Reliefs

Which of the following is not considered a company under the Inland Revenue Act?

• A corporation

• A unit trust

• A partnership with fewer than 20 partners

• A mutual fund

Which of the following is included in business income under Section 6.2?

• Interest from personal savings

• Gain from the realization of capital assets and liabilities

• Dividends received from an investment

• Employment income

When computing business income, which of the following should be added back to accounting profit?

• Expenses deductible for tax purposes but not deducted in accounts

• Tax-exempt income included in accounting profit

• Non-deductible expenses claimed in accounts

• Revenue included in accounting profit but not subject to tax

What is the correct formula for Allowance for Trading Stock under Section 13.2?

• Closing stock + expenses incurred – opening stock

• Opening stock + expenses incurred – closing stock

• Closing stock – opening stock + expenses incurred

• Opening stock + sales revenue – closing stock

What is the definition of a balancing allowance under Section 16?

• The excess of the selling price over the written-down value of an asset

• The amount deducted when an asset is fully depreciated

• The difference when an asset is sold for less than its written-down value

• The amount allocated for asset maintenance and repairs

Which of the following expenses cannot be deducted when calculating a person’s income under Section 10.1.b?

• Research and Development (R&D) expenses

• Domestic expenses

• Advertising costs

• Depreciation of machinery

Which of the following is a disallowable tax expense under Section 10?

• Corporate income tax

• Research and Development (R&D) tax credits

• Employee salaries

• Loan interest paid on a business loan