Manpreet's Taxable Income Calculation
Added on 2020-02-23
14 Pages2359 Words269 Views
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Running head: TAXATIONTaxationName of the studentName of the universityAuthor note
1TAXATIONTable of ContentsQUESTION 1.............................................................................................................................2Answer i.................................................................................................................................2Answer ii................................................................................................................................2Answer iii...............................................................................................................................3Answer iv...............................................................................................................................3Answer v................................................................................................................................4Answer vi...............................................................................................................................4Answer vii..............................................................................................................................4Answer viii.............................................................................................................................5Answer ix...............................................................................................................................6Answer x................................................................................................................................6QUESTION 2.............................................................................................................................7Computation of assessable income of Manpreet........................................................................9Reference..................................................................................................................................10
2TAXATIONQUESTION 1Answer i It is clearly mentioned under the Taxation ruling for TR 1999/6 that the rewards or thepoints received by the clients from the airline business organizations are not treated asincome under taxation. However, these rewards or points may attract the fringe benefit tax ifthe below mentioned conditions are satisfied –The rewards or the flight points are allocated to the customers under some specificarrangementThere exists a family relationship among the employer and employee or the rewardsand points received by the employees with regard to his employment1From the above discussion, it is clear that the reward for repeated flier of Webjetreceived from the large business entity by the employees with regard to their travel related towork that is paid by the company shall not be included under the taxable income, nor it shallbe taxed as the fringe benefit tax. Answer iiIf any person receives any compensation from the customer owing to the damages ofthe capital asset while providing service to that customer with that capital asset, the damagecompensation shall not be included under the assessable income for tax. However, to get thebenefit followings factors must be taken into account –The compensation amount received for the damage must be used for refurbishing thedamaged part of the asset. 1 Ato.Gov.Au/(2017) Ato.gov.au <https://www.ato.gov.au/>.
3TAXATIONThe asset shall be a depreciable asset and the forecasted depreciation must beaccounted for in the record with regard to the asset.The assets shall be in the nature of capital asset and shall be exclusively used for thebusiness purpose of the receiver2.Therefore, the compensation received for the damaged goods while providing servicesby the company that hires crane will not be included under the taxable income, provided theconditions mentioned above are fulfilled.Answer iiiAs per the ATO (Australian Taxation Office), any gifts received in for form of cash orkind by any individual are treated as part of the assessable income for taxation and notincluded under the non-assessable income or exempted income. With regard to the receipt ofbig gifts that can be transferred into cash or money and the cash gifts or gifts received in kindthat are offered to the employee, the sum of gifts are included under the taxable income of thereceiver. However, the small amount of gift is not included under the period when the tax ofthe person is calculated. Here in the given case, the supplier of alcohol offered free overseasholiday package to the night club manager. This gift will be considered and included underthe assessable income of the night club manager.Answer ivA per the ATO, the additional money raised that will be refunded to the member willnot be considered as income while computing the assessable income. In the given case,Canoe club raised money for purchase of additional canoes and eventually the additionalmonies were refunded to the member of the Canoe club3. This money will not be consideredas income while computing the assessable income under income tax as the extra money does2CPA Australia(2017) Cpaaustralia.com.au <https://www.cpaaustralia.com.au/>.
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