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The Income Tax Assessment Act 1997 Study

   

Added on  2020-04-07

11 Pages1448 Words113 Views
TaxName of the Student:Name of the University:Authors Note:

1Table of ContentsAnswer to Question 1:................................................................................................................2Answer to Question 2:................................................................................................................3Answer to Question 3.................................................................................................................5Answer to Question 4.................................................................................................................9Reference..................................................................................................................................10

2Answer to Question 1:The income that is taxable is computed by deducting allowable deductions from theincome that is assessable which is mentioned under section 4-15 of the Income TaxAssessment Act 1997. It is also stated under section 8-1(1) of the Income Tax AssessmentAct 1997 that an individual who pays tax is entitled to claim for deduction against theexpenses that are spent on the following:i.For generating any assessable income;ii.In order to run any activity related to business.Hence,1.Under section 8-1 of the ITAA 1997, the expenses that is spent for moving amachinery will not be taken as deduction.2.As per Section 8-1 of the ITTA 1997, the revaluation cost of an asset cannot beconsidered as an expense that is deductible (Gurran and Phibbs 2013).3.According to the section 8-1 of the ITAA 1997, any expenditure that is spent on legalproceedings in order to fight against the winding up of the company will beconsidered as deductible expenses (Taylor and Richardson 2013).4.Section 8-1 of the ITAA 1997 states that for producing any business income, anyexpenses that is suffered by the lawyer shall be considered as a deductible expense.

3Answer to Question 2:Input credit of GST regarding purchases made by the company shall be permitted ifonly the requisite proof in respect of such purchase is kept by the company. A business that isoperating for earning any income have the right to claim input credit on purchasing an asset ifthe payment is made inclusive of GST.Issue:An amount of $1,650,000 including GST has been spent by Big Bank Limited inadvertisement process. Now the issue is that the Bank want to ensure that whether the amountof $1,650,000 which the bank incurred for advertisement purpose will be permitted to takeinput credit or not.Rules:As mentioned in Chapter 2 of the Goods and Service Tax Act, an expenditure that isexperienced by the business in its regular course will be allowed to receive input credit of taxprovided such expense must be inclusive of GST.

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