1.
It means all income derived from whatever source
a. Revenue
b. Income
c. Gross income
d. Taxable income
2. The following constitutes “gross income”, except:
a. Compensation for services
b. Gross income derived from the conduct of trade or business or the exercise of a profession
c. Gains from dealings in properties
d. None of the above
3. It refers to items of gross income less deductions allowed under the law
a. Gross income
b. Net income
c. Taxable income
d. Taxable gross income
4. It refers to the “wealth” or money invested or available to be invested
a. Revenue
b. Income
c. Gross income
d. Capital
5. It is the flow of “wealth” or money
a. Revenue
b. Receipts
c. Capital
d. Income
6. It is a payment, or return, received from an investment that is not considered a taxable event and is
not taxed as income
a. Return on capital
b. Return of capital
c. Receipt
d. Revenue
7. For the purpose of computing the taxable income and the income tax, it shall mean gross sales less
sales return, discounts and allowances and cost of goods sold
a. Revenue
b. Income
c. Gross income
d. Taxable income
8. For the purpose of computing the taxable income and the income tax, it shall include all business
expenses directly incurred to produce the merchandise to bring them to their present location and
use
a. Cost of goods sold
b. Operating expenses
c. Both a and b
d. Cost
9. Statement 1: In the case of taxpayers engaged in the sale of service, “gross income” means gross
receipts less sales returns, allowances, discounts and cost of services
Statement 2: “Cost of services” shall mean all direct and indirect costs and expenses necessarily
incurred to provide the services required by the customers and clients
Statement 3: In the case of banks, “cost of services” shall include interest expenses
a. All statements are correct
b. All statements are false
c. Only statement 2 is false
d. Only statement 1 is correct
10. For taxation purposes, the following are elements of gross income, except:
a. It is a return on capital
b. It must be realized actually or constructively
c. It is not exempted by law or treaty
d. None of the above
11. Statement 1: Proceeds of life insurance received by the beneficiary of the insured is a return on
capital
Statement 2: The excess of proceeds over total premiums paid which is received by the beneficiary
of the insured decedent is gross income and is taxable
a. Both statements are true
b. Both statements are false
c. Only statement 1 is true
d. Only statement 2 is true
12. Which of the following indemnity or award is gross income?
a. Indemnity received for injuries sustained
b. Money awarded by the court to the winning party for his claim of moral damages against the
other party
c. Indemnity for lost/unpaid salaries
d. None of the above
1. Ventura was on his way to deliver merchandise ordered by his customer when another driver lost
control over his truck and rammed it against the truck of Mr. Ventura. As a result, Ventura sustained
injuries, his truck was severely damaged, and all the merchandise were destroyed. Negotiations with
other party went smoothly and Mr. Ventura was paid the total amount of P3,150,000 for the
following:
Repair and replacement of truck parts P900,000
Total selling price of merchandise destroyed (at P1,000,000 cost) 1,700,000
Hospitalization and medical expenses for injuries sustained 300,000
Reimbursement for other expenses incurred in relation to the incident 250,000
Total P3,150,000
How much of the above is gross income of Mr. Ventura for taxation purposes?
a. P3,150,000
b. P1,950,000
c. P1,700,000
d. P700,000
Note
Selling price (merchandise) P1,700,000
Less: cost 1,000,000
Gross Income 700,000
*All the rest are return of capital
2. Ventura was on his way to deliver merchandise ordered by his customer when another driver lost
control over his truck and rammed it against the truck of Mr. Ventura. As a result, Ventura sustained
injuries, his truck was severely damaged, and all the merchandise were destroyed. Negotiations with
other party went smoothly and Mr. Ventura was paid the total amount of P3,150,000 for the
following:
Repair and replacement of truck parts P900,000
Total selling price of merchandise destroyed (at P1,000,000 cost) 1,700,000
Hospitalization and medical expenses for injuries sustained 300,000
Reimbursement for other expenses incurred in relation to the incident 250,000
Total P3,150,000
How much is the total return capital?
a. P3,150,000
b. P2,450,000
c. P1,700,000
d. P1,450,000
Note
*900,000 + ,000,000 + 300,000+250,000
3. Ponce is an employee of XYZ Trading. For the month of June, Ponce received the following from XYZ:
Description Amount
Basic Salary P25,000
Overtime and holiday pay 2,500
Transportation and cellphone allowance 4,000
Reimbursement of office supplies XYZ 2,000
Reimbursement of utilities payment for XYZ 4,000
How much of the above is the gross income of Mr. Ponce?
a. P37,500
b. P33,500
c. P31,500
d. P27,500
Note
P31,500 (25,000+2,500+4,000)
4. Ponce is an employee of XYZ Trading. For the month of June, Ponce received the following from XYZ:
Description Amount
Basic Salary P25,000
Overtime and holiday pay 2,500
Transportation and cellphone allowance 4,000
Reimbursement of office supplies XYZ 2,000
Reimbursement of utilities payment for XYZ 4,000
How much is the return of capital?
a. P12,500
b. P10,000
c. P6,000
d. P4,000
5. Cruz was an employee of ABC Trading. He was killed by a co-employee in one of their regular
“inuman” session. A case was filed by the heirs of Mr. Cruz against the co-employee. The court
decided in favor of the heirs and awarded them the following:
Description Amount
Compensatory damages P400,000
Moral damages 800,000
Exemplary damages 200,000
For attorney’s fees and cost of lawsuit 500,000
Consequential damages representing the loss 1,300,000
of the victim’s earning capacity
How much of the above is return of capital?
a. P3,200,000
b. P2,400,000
c. P2,200,000
d. P1,900,000
Note
P1,900,000: only the 1,300,000 represents gross income
6. Juan bought a certain piece of lot for P300,000. After 2 years, when its fair value was P500,000, he
sold it to his best friend for P320,000 in consideration of their friendship.
For taxation purposes, how much shall be the gross income subject to income tax?
a. P500,000
b. P300,000
c. P200,000
d. P20,000
7. Juan bought a certain piece of lot for P300,000. After 2 years, when its fair value was P500,000, he
sold it to his best friend for P320,000 in consideration of their friendship.
How much shall be subject to transfer (donor’s) tax?
a. P320,000
b. P200,000
c. P180,000
d. P20,000
8. Arturo is in quandary and approached you to help him identify which of the following is considered
as gross income for taxation?
a. P710,000
b. P660,000
c. P570,000
d. P320,000
Note
*300,000+20,000=320,000
*Proceeds of bank loan is not income but debt
*The corps were not yet sold, hence no income yet
*The cancelled indebtedness in donation
9. How much of the following is gross income subject to income tax?
Description Amount
Cancellation of indebtedness for services P30,000
rendered
Actual damages for cost of inventories lost 500,000
Inheritance 200,000
Gain on illegal business 700,000
Gain on gambling activities 560,000
Gain on “5-6” lending activities 400,000
Gain on sale of laptop previously used for 20,000
non-business activities
a. P2,410,000
b. P2,210,000
c. P2,160,000
d. P1,710,000
Note
1,710,000(30,000+700,000+560,000+400,000+20,000)
10. During the calendar year, Minda went abroad and stayed there for 6 complete months from March
1 to August 31. During her stay abroad, she was able to conduct business and earned a total of
P800,000 gross income. She left her business in the Philippines in the care of her sister. For the
entire period of January 1 to August 31, her business in the Philippines earned a total of P1,200,000
gross income. She came back in the country and continued to manage her business which earned a
total of P300,000 for the remainder of the taxable year. Minda had no intention of permanently
residing abroad.
For the taxable year, how much should Minda declare as gross income for tax purposes?
a. P2,300,000
b. P1,500,000
c. P1,200,000
d. P300,000
Note
2,300,000(800,000+1,200,000+300,000)
Solution: Minda is resident citizen despite the fact that she stayed outside the country for 184 days. The rule is, the length of
stay is only considered when the intention of the taxpayer cannot be determined under the circumstances. As resident citizen,
she is taxable on income earned IN and OUT the country
11. Madumi, Inc., is a corporation duly organized and registered in the Philippines. Out of the total of 15
board members, 12 are foreigners. The controlling stockholders are also foreigners. The corporation
conduct its business both within and without the Philippines. The following data pertaining the
corporation’s operations is presented to your for evaluation:
Description Within Without
Sales P6,000,000 P15,000,000
Cost of Sales 1,500,000 3,500,000
Gross Income 4,500,000 11,500,000
How much should be the reportable gross income for tax purposes?
a. P21,000,000
b. P16,000,000
c. P6,000,000
d. P4,500,000
Note
16,000,000 (4,500,000+11,500,000, The Corporation is a domestic corporation taxable on income in and out the country)
12. Delta Corporation, a domestic corporation doing business in and out the country (Philippines),
presented to you the following for evaluation. The corporation wants to know how much of its gross
income is earned within and without the Philippines:
Description of Transaction Amount of
Gross Income
Goods purchased and sold outside the P3,500,000
country
Goods purchased and sold outside the 2,900,000
country and sold in the country
Goods purchased and sold in the country 4,200,000
Goods purchased in the country and sold 1,400,000
outside
How much gross income is earned by Delta Corporation within and without the country?
a. Within – P12,000,000 ; Without – P0
b. Within – P6,400,000 ; Without – P5,600,000
c. Within – P4,900,000 ; Without – P7,100,000
d. Within – P7,100,000 ; Without – P4,900,000
Note
Gains, profits and income derived from the purchase of personal property within and its sale without the Philippines, or from
the purchase of personal property without and its sale within the Philippines shall be treated as derived entirely from sources
within the country in which sold
13. Delta Corporation, a domestic corporation doing business in and out the country (Philippines),
presented to you the following for evaluation. The corporation wants to know how much of its gross
income is earned within and without the Philippines:
Description of Transaction Amount of
Gross Income
Goods purchased and sold outside the P3,500,000
country
Goods purchased and sold outside the 2,900,000
country and sold in the country
Goods purchased and sold in the country 4,200,000
Goods purchased in the country and sold 1,400,000
outside
How much of the gross income of Delta is taxable in the Philippines?
a. P12,000,000
b. P8,500,000
c. P7,100,000
d. P4,900,000
Note
P12,000,000 A domestic corporation is taxable on income earned within and without
14. Gentrix Corporation, a domestic manufacturing corporation, manufactures goods and sells them
through its home and branch. The home is located in the Philippines and the branch is located
outside the country. The home office reported a gross income of P3,500,000 while the branch
reported a gross income of P5,300,000.
How much is the gross income within and without the Philippines?
a. Within – P8,800,000 ; Without – P0
b. Within – P3,500,000 ; Without – P0
c. Within – P3,500,000 ; Without – P5,300,000
d. Within – P0 ; Without – P8,800,000
Note
Home and branch are one entity. Transactions of the branch are attribute to the home
15. Gentrix Corporation, a domestic manufacturing corporation, manufactures goods and sells them
through its home and branch. The home is located in the Philippines and the branch is located
outside the country. The home office reported a gross income of P3,500,000 while the branch
reported a gross income of P5,300,000.
How much gross income of Gentrix is taxable in the Philippines?
a. P8,800,000
b. P3,500,000
c. P5,300,000
d. P0
Note
8,800,000 Domestic corporation taxable on income in and out
16. Bravo X Corporation, a domestic corporation, is the parent corporation of Charlie Y Corporation.
Manufacturing is done by Bravo and distribution is undertaken by Charlie. Production gross
income reported by Bravo X is P9,200,000 while distribution gross income reported by Charlie Y
is P5,300,000. Bravo X is located in the Philippines while Charlie Y is located abroad.
How much gross income should be reported by Bravo X Corporation?
a. Within – P14,500,000 ; Without – P0
b. Within – P9,200,000 ; Without – P5,300,000
c. Within – P9,200,000 ; Without – P0
d. Within – P0 ; Without – P0
Note
9,200,000 , 0 : Parent and subsidiary are two separate entities. The distribution income of Charlie Y is to be reported by it as a
separate entity
17. Dividend income of P500,000 is earned by X from a resident foreign corporation doing business
within and without the Philippines. For the three-year period preceding the year of declaration of
the dividend, the ratio of the Philippine gross income of the foreign corporation to its world income
is 55%.
How much of the dividend income of X is earned from Philippines source(within)?
a. P500,000
b. P275,000
c. P225,000
d. Zero
Note
275,000 (500,000x55%)
18. Dividend income of P500,000 is earned by X from a resident foreign corporation doing business
within and without the Philippines. For the three-year period preceding the year of declaration of
the dividend, the ratio of the Philippine gross income of the foreign corporation to its world income
is 55%.
Assuming the X is a resident citizen, how much of the entire dividend income (gross income) is
taxable in the Philippines?
a. P500,000
b. P275,000
c. P225,000
d. Zero
Note
500,000 resident citizen is taxable on income earned within and without
19. Dividend income of P500,000 is earned by X from a resident foreign corporation doing business
within and without the Philippines. For the three-year period preceding the year of declaration of
the dividend, the ratio of the Philippine gross income of the foreign corporation to its world income
is 55%.
Assuming the X is a non-resident citizen, how much of the entire dividend income (gross income) is
taxable in the Philippines?
a. P500,000
b. P275,000
c. P225,000
d. Zero
Note
275,000 only the income earned within of a non-resident citizen is taxable in the Philippines
20. Alpha Corporation is a domestic corporation doing 55% of its business abroad. Among its
stockholders who earned dividends during the taxable year was Mr. Jonastic, a non-resident citizen.
Mr. Jonastic earned from Alpha Corporation the amount of P800,000 dividends.
Which of the following correctly identifies the gross income and situs of gross income of Mr. Jonastic
in relation to the said dividends?
a. Within – P800,000 ; Without – P0
b. Within – P440,000 ; Without – P360,000
c. Within – P0 ; Without – P800,000
d. Answer not given
13. Taxable income of the taxpayer may be taxed under-
a. Final income tax scheme
b. Capital gains tax scheme
c. Regular income tax scheme
d. Any one of the above
14. Under this income taxation scheme, the full amount of tax is withheld by the payor before such
income is received by the payee taxpayer
a. Final income tax scheme
b. Capital gains tax scheme
c. Regular income tax scheme
d. Any one of the above
15. Statement 1: Passive income is income that requires minimal labor to earn and maintain. It is
subject to final taxation scheme
Statement 2: For taxation purposes, rental from property is a passive income
a. Both statements are true
b. Both statements are false
c. Only statement 1 is true
d. Only statement 2 is true
16. This withholding tax system applies to passive income
a. This withholding tax system applies to passive income
b. Income tax system
c. Final withholding tax system
d. Passive income is not subject to withholding tax system
17. Active income is income earned as a direct result of a specific effort. The following are examples of
active income, except?
a. Compensation income
b. Rental income
c. Royalty income
d. Profession income
18. These are assets which are not used in trade, business, or profession of the taxpayer
a. Ordinary assets
b. Passive assets
c. Capital assets
d. Investment assets
19. Statement 1: Jewelry for personal use is a capital asset
Statement 2: Office furniture is an ordinary asset
Statement 3: Stocks held for investment purposes by the taxpayer who is not a dealer in of stocks is
capital asset
Statement 4: Land (real property) held for speculation purposes is ordinary asset
a. All statements are true
b. All statements are false
c. Only statements 3 and 4 are false
d. Only statement 4 is false
20. Which of the following income is subject to captain gains taxation?
a. Income from sale of personal jewelry
b. Income from sale of domestic stocks by a dealer
c. Income from sale of domestic stocks sold direct to buyer by a non-dealer
d. Income from sale of land located in the Philippines and considered as inventory
21. Statement 1: Capital gains tax is a final tax
Statement 2: Unlike final tax on passive income, the capital gains tax is not subject to final
withholding tax system
a. Both statements are true
b. Both statements are false
c. Only statement 1 is true
d. Only statement 2 is true
22. Statement 1: The regular income tax scheme applies to income from sale of ordinary assets
Statement 2: The regular income tax scheme applies to income from sale of capital assets which are
not subject to the capital gains taxation scheme
Statement 3: The regular income tax scheme applies to passive income which is not subject to the
final taxation scheme
a. All statements are true
b. All statements are false
c. Only statement 1 is true
d. Only statements 1 and 2 are true
23. Which of the following income is subject to regular income tax?
a. Income from sale of personal jewelry
b. Income from sale of lot by a real estate dealer
c. Income from sale of inventory
d. All of the above
24. Statement 1: The taxable income shall be computed upon the basis of the taxpayer’s annual
accounting period
Statement 2: The taxable income shall be computed in accordance with the method of accounting
regularly employed in keeping the books of such taxpayer
a. Both statements are true
b. Both statements are false
c. Only statement 1 is true
d. Only statement 2 is true
25. The computation of taxable income shall be made in accordance with such method as in the opinion
of the Commissioner of BIR clearly reflects the income when-
Answer 1: When the use of GAAP in determining income is more plausible under the circumstance
Answer 2: When no method of accounting has been employed by the taxpayer
Answer 3: The method employed by taxpayer does not clearly reflect the income
a. Only answer 1 is true
b. Only answer 1 and 2 are true
c. Only answers 2 and 3 are true
d. All answers are true
Note
*Answer 1 is not included in the NIRC as one of the instances
26. Under the NIRC, the taxable income shall be computed on the basis of the calendar year under the
following circumstances, except one. Identify the exception
a. Taxpayer does not keep books
b. Taxpayer has no annual accounting period
c. Taxpayer’s annual accounting period is other than a fiscal year
d. None of the above
1. Taxpayer is a resident citizen
Description 2020
Interest income on savings deposits in local banks P3,000
Income from sale of lot held for investment, located IN 320,000
Compensation income 200,000
Income from legitimate business 400,000
Income from illegal business 800,000
Income from sale of machine not used in business 40,000
How much is the total passive income?
a. P323,000
b. P43,000
c. P3,000
d. Answer not given
2. Taxpayer is a resident citizen
Description 2020
Interest income on savings deposits in local banks P3,000
Income from sale of lot held for investment, located IN 320,000
Compensation income 200,000
Income from legitimate business 400,000
Income from illegal business 800,000
Income from sale of machine not used in business 40,000
How much is the total active income?
a. P1,760,000
b. P1,440,000
c. P1,400,000
d. P640,0000
3. Taxpayer is a resident citizen
Description 2020
Interest income on savings deposits in local banks P3,000
Income from sale of lot held for investment, located IN 320,000
Compensation income 200,000
Income from legitimate business 400,000
Income from illegal business 800,000
Income from sale of machine not used in business 40,000
How much is the total capital gain?
a. P360,000
b. P320,000
c. P323,000
d. P40,000
4. Taxpayer is a resident citizen
Description 2020
Interest income on savings deposits in local banks P3,000
Income from sale of lot held for investment, located IN 320,000
Compensation income 200,000
Income from legitimate business 400,000
Income from illegal business 800,000
Income from sale of machine not used in business 40,000
How much is subject to final tax?
a. P323,000
b. P43,000
c. P3,000
d. Answer not given
5. Taxpayer is a resident citizen
Description 2020
Interest income on savings deposits in local banks P3,000
Income from sale of lot held for investment, located IN 320,000
Compensation income 200,000
Income from legitimate business 400,000
Income from illegal business 800,000
Income from sale of machine not used in business 40,000
How much is subject to regular income tax?
a. P1,760,000
b. P1,440,000
c. P1,400,000
d. P640,000
6. Taxpayer is a resident citizen
Description 2020
Interest income on savings deposits in local banks P3,000
Income from sale of lot held for investment, located IN 320,000
Compensation income 200,000
Income from legitimate business 400,000
Income from illegal business 800,000
Income from sale of machine not used in business 40,000
How much is subject to capital gains tax?
a. P360,000
b. P320,000
c. P323,000
d. P40,000
Note
320,000 Only the capital gain form real property sold is subject to capital gains tax
7. Mang Panday, a resident citizen taxpayer approached you and presented the following-
Description 2020
Basic salary P800,000
Overtime, holiday pays, honorarium and other allowances 130,000
Non-taxable compensation (not included in the above) 90,000
Rental income on his apartment for lease 150,000
Royalty earned from the sale and distribution of his books – 500,000
Local
Dividend earned on his stocks from San Mig, Inc., a domestic 30,000
corporation
Gross income from a “sideline” store business 70,000
Interest income earned from his banks savings account-Local 10,000
banks
Gross income from online selling of plants 90,000
Income from the sale of his old car 40,000
Income from the sale of a farm land he inherited years ago 400,000
Mang Panday wants to determine the taxability of the foregoing. How much is the total amount of
passive income which is subject to final tax?
a. P690,000
b. P540,000
c. P530,000
d. P500,000
Note
540,000(500,000+30,000+10,000)
8. Mang Panday, a resident citizen taxpayer approached you and presented the following-
Description 2020
Basic salary P800,000
Overtime, holiday pays, honorarium and other allowances 130,000
Non-taxable compensation (not included in the above) 90,000
Rental income on his apartment for lease 150,000
Royalty earned from the sale and distribution of his books – 500,000
Local
Dividend earned on his stocks from San Mig, Inc., a domestic 30,000
corporation
Gross income from a “sideline” store business 70,000
Interest income earned from his banks savings account-Local 10,000
banks
Gross income from online selling of plants 90,000
Income from the sale of his old car 40,000
Income from the sale of a farm land he inherited years ago 400,000
How much is the total amount of active income and other income subject to regular income tax?
a. P1,680,000
b. P1,280,000
c. P1,240,000
d. P1,150,000
Note
1,280,000 (800,000+130,000+150,000+70,000+90,000+40,000)
9. Mang Panday, a resident citizen taxpayer approached you and presented the following-
Description 2020
Basic salary P800,000
Overtime, holiday pays, honorarium and other allowances 130,000
Non-taxable compensation (not included in the above) 90,000
Rental income on his apartment for lease 150,000
Royalty earned from the sale and distribution of his books – 500,000
Local
Dividend earned on his stocks from San Mig, Inc., a domestic 30,000
corporation
Gross income from a “sideline” store business 70,000
Interest income earned from his banks savings account-Local 10,000
banks
Gross income from online selling of plants 90,000
Income from the sale of his old car 40,000
Income from the sale of a farm land he inherited years ago 400,000
How much is the capital gain subject to capital gains tax?
a. P590,000
b. P550,000
c. P440,000
d. P400,000
10. A taxpayer engaged in service business provides you with the following:
Description 2019 2020
Collections from services rendered-current P600,000 P800,000
Billings for revenues earned but uncollected 500,000 200,000
Collections from uncollected billings in 2019 470,000
Collections from uncollected billings in 2020 50,000
Advance collections for service 300,000 200,000
How much is the gross income under cash basis?
a. 2019 – P1,400,000 ;2020 -1780
b. 2019 – P1,370,00 : 2020 – P1,050,000
c. 2019 – P1,100,000 – 2020 – P1,050,00
d. 20919 - P900,000 – 2020 – P1,520,000
Note
The billings are not considered
11. A taxpayer engaged in service business provide you with the following
Description 2019 2020
Collections from services rendered-current P600,000 P800,000
Billings for revenues earned but uncollected 500,000 200,000
Collections from uncollected billings in 2019 470,000
Collections from uncollected billings in 2020 50,000
Advance collections for service 300,000 200,000
How much is the gross income under accrual basis?
a. 2019 – P500,000 ; 2020 – P720,000
b. 2019 – 800,0000 ; 2020 – P920,000
c. 2019 – P1,400,000 ; 2020 – 1,200,000
d. 2019 – P1,400,000 ; 2020 – 1,720,000
12. The taxpayer is Juan dela Cruz, a businessman engaged in selling cars. He engaged your services for
the purpose of helping him prepare his income tax return for the taxable calendar year 2020. He
presented you the following details of the sale of a certain car:
Description Amount
Selling price, August 1, 2020 900,000
Cost 400,000
Unpaid mortgage on the car sold 300,000
Mortgage to be assume by buyer 180,000
Down payment, August 1, 2020 120,000
1st Installment, September 1, 2020 100,000
2nd installment, December 1, 2020 100,000
3rd installment, February 1, 2021 200,000
4th installment, June 30, 2021 200,000
Assuming that in the above problem, instead of selling cars, Juan is engaged in a grocery business
and he sold that certain car. How much income should he report using a method which is more
advantageous to him?
a. P500,000
b. P347,222
c. P222,222
d. P177,778
Note
500,000 using accrual basis since installment basis is not allowed. The initial payment exceeds 25% of the selling price
13. A has been assessed deficiency income tax P1,000,000.00, exclusive of interest and surcharge for
the taxable year 2018.
BIR commissioner issued notice and demand to pay which is due on June 30,2020
The tax liability has remained unpaid despite the lapse of June 30,2020
Payment was made by the taxpayer of February 10, 2021
Compute the amount of applicable surcharge:
a. P250,000
b. P286,328
c. P313,132
d. P500,000
Note
250,000 (1,000,000x 25% surcharges rate)
14. A has been assessed deficiency income tax P1,000,000.00, exclusive of interest and surcharge for
the taxable year 2018.
BIR commissioner issued notice and demand to pay which is due on June 30,2020
The tax liability has remained unpaid despite the lapse of June 30,2020
Payment was made by the taxpayer of February 10, 2021
Compute the total amount which was due the taxpayer on June 30, 2020 (including interest and
surcharge):
a. P1,250,000
b. P1,395,315
c. P1,431,644
d. P1,492,192
Note
P1,395,315 using the following computation based of RR 21-2018
Basic Tax Due - Income Tax P1,000,000.00
Add: 25% Surcharges for late payment P250,000.00
12% Deficiency Interest from 04.16.2019
145,315.07 395,315.07
to 06.30.2020 (442 days)
Total Amount Due, June 30,2020 P1,395,315.07
Add: 12% Deliquency Interest from
07.01.2020 based on total amount due of 103,215.09
P1,395,315.07 as of 06.30.2020)
Tota Amount Due, Ferbruary 10,2021 1,498,530.16
15. A has been assessed deficiency income tax P1,000,000.00, exclusive of interest and surcharge for
the taxable year 2018.
BIR commissioner issued notice and demand to pay which is due on June 30,2020
The tax liability has remained unpaid despite the lapse of June 30,2020
Payment was made by the taxpayer of February 10, 2021
How much must have been paid by the taxpayer on February 10, 2021 (including surcharge and
interest)?
a. P1,748,530
b. P1,676,161
c. P1,608,148
d. P1,498,530
Note
P1,395,315 using the following computation based of RR 21-2018
Basic Tax Due - Income Tax P1,000,000.00
Add: 25% Surcharges for late payment P250,000.00
12% Deficiency Interest from 04.16.2019
145,315.07 395,315.07
to 06.30.2020 (442 days)
Total Amount Due, June 30,2020 P1,395,315.07
Add: 12% Deliquency Interest from
07.01.2020 based on total amount due of 103,215.09
P1,395,315.07 as of 06.30.2020)
Tota Amount Due, Ferbruary 10,2021 1,498,530.16
