2ACCOUNTING FOR INCOME TAXQuestion 1Treatment under current tax Insurance cost – as per Australian GST, three kinds of insurance are recognized and they aretaxed in dissimilar way –Life insurance are treated as input tax as the policies of life insurance includeconsiderable element for the purpose of savings and are of financial service nature.Thus, the life insurance cost is considered in same way as like various other financialservices under GST (Ali et al. 2017).GST is not charged for the private health insurance. This action is reliable withgeneral treatment for the health services under GSTAll the other insurance that are considered as general insurance are fully taxableunder the GSTRent income –The rental income is chargeable to GST and treated in the same way like rentalproperty. Deductions under income tax cannot be claimed for purchase cost as it does not createrental incomeCost of property may be included under the ownership cost that will reduce the capitalgain tax. However, it does not have any relation with the rental income.Entertainment cost –Entertainment includes –Drinks and meal, social functions of the staffs and cocktail parties

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