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Taxation Law - Question 1

There are two laws which are related to or specifies the concept of Income Tax in Australia. The two laws are known as the Income Tax Act of 1936 and the income tax assessment Act 1997. Both these laws govern income Tax Acts, specifying that what are the Deduction and what are the amounts that have to be added while calculating that net payable income. (Anon., 30/04/2012)

Section 8.1 of the Income Tax Assessment Act 1997 talks about General Deductions. General Deductions are the amount deducted from the assessable income to such an extent that:-

• If the amount if incurred in gaining income;
• If the amount is expended for carrying of a business.

But the following heads of income cannot be deducted if it is a loss or outgoing of capital

Section 8-5 of the Act specifies the specific deductions which can be deducted from a taxpayer’s assessable income. (Anon., n.d.). Th....