Taxation, Theory, Practice and Law

TAXATION, THEORY
PRACTICE AND LAW

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
WEEK 1...........................................................................................................................................1
Functions of Taxation..................................................................................................................1
WEEK 2...........................................................................................................................................2
Residential status and income tax liability of Amandeep............................................................2
WEEK 3...........................................................................................................................................2
Tax treatment of payment for Gary.............................................................................................2
WEEK 4...........................................................................................................................................3
Assessability or Deductibility of the events................................................................................3
WEEK 5...........................................................................................................................................4
Deduction for decline in value using prime cost and diminishing value method........................4
REFERENCES................................................................................................................................6

WEEK 1
Functions of Taxation
Tax is defines as the charge over the organisations and individuals by statutory
authorities on the product, services or income. Taxation is governed by the Income Tax
Assessment Act, 1997 that requires the individuals to pay tax on their income above the
threshold limit. Tax in Australia is collected by the Australian taxation office that also guides
about the taxability of events and payments of tax. Tax is collected by the government for
running the economy of country. Government uses the tax collected for the development and
upliftment of the society. It undertakes various plans and projects for developing the
infrastructure and increasing the growth rate of economy. There are number of functions to be
performed by the taxation.
 It functions as the body having charges of imposing tax over the individuals equitably on
the basis of their earnings and income. Earning capacity and assets of the individuals are
sued for measuring the earning ability. It ensures that taxes are charged from the people
on progressive basis.
 Taxation has the function of ensuring that taxes are increased in manner that decreases
economic costs that is created by the bias or distortions from various tax implications.
These are evaluated on the basis of revenues generated as rise in overall taxes (Murphy,
2019).
 Taxation performs the function of raising revenues from the incomes and services of
individuals for satisfying increasing needs of society. This is essential for public to earn
adequate level of incomes for taxation purposes.
 It has established age neutrality between the age group of different generations. It ensures
that there is uniform taxation system for people belonging to same age group in the
country.
 The taxation ensures community is consulted and engaged in the process of making
taxation reforms with diversity, interests and views. Big reforms brought immediately
don not get much acceptance as in the case where the problems are defined and solutions
are searched for getting more acceptance.
 It functions as a body to make system of Australian taxation simple as well as
predictable. It pays attention towards framing structure of tax systems in ways that
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