Taxation Presentation: Allowable Deductions and Tax Planning

This presentation provides an overview of tax allowable deductions available to taxpayers, focusing on relevant legislation such as the Income Tax Assessment Act 1936 and the Income Tax Act 1997. It offers advice on specific issues related to individuals, addressing topics like expenses incurred in producing assessable income, car expenses, capital allowances, and the deductibility of expenses with both personal and business components. The presentation also touches on the definition of trading stock and concludes that expenses incurred for business purposes are generally tax-deductible. References to key rulings and legal issues further support the analysis. Desklib provides students access to a wide range of solved assignments and study resources.

TAXATION

INTRODUCTION
The presentation focuses on tax
allowable deduction that are
available to tax payer.
The presentation provides advice to
John Smith and Viktor.

LEGISLATION
The laws governing the issues of
deduction are:
Income Tax Assessment Act 1936,
Income Tax Act 1997.
Taxation Ruling;
Case and legal issues

SECTION 8-1
The section 8-1 of the ITAA provides that expenses
incurred producing Assessable Income is allowed as
deduction.

The expenses will be deductible subject to
the keeping go proper records.
It is clearly stated that in case the
service is being rendered from a
premise owned by the assesse
then, that person as deduction
can claim the cost required for
running it.
Adam Smith Issue

VIKTOR ISSUE CAR
EXPENSES
The section 28-10 states that this Division
is only applicable in case of individual or
partnership.
The loss or outgoing that is related to the
operation of the car or decline in the value
of car is referred to as car expenses as per
section 28-13 of ITAA 97.

CAPITAL ALLOWANCE
The Division 40 of the ITAA 97 provides that a taxpayer is allowed
to claim deduction for decline in value of depreciable assets.
The section 40-30 of the ITAA 97 states that a depreciating asset is
that which has limited useful life.
It is provided in section 40-25 that the taxpayer can claim the
decline in value of assets that was held by the taxpayer during the
year

EXPENSES FOR PRODUCING ASSESSABLE INCOME
The expenses that are of personal nature are not allowable
expenses.
In case an expenses is combination of personal and
business purpose then the portion of expenses that relates
to the business is allowed as deduction

STOCK IN HAND
The Taxation Ruling IT/2670 in Para 3 provides the meaning of
trading stock in hand.
It states that for section 28 of the act it is not necessary that the
goods should be physically delivered to the tax payer

CONCLUSION
Therefore based on the above presentation it
can be concluded that expenses that are
incurred for business is allowed as taxation.

REFERENCE
Butler, K. C. (2016). Multinational Finance: Evaluating the
Opportunities, Costs, and Risks of Multinational Operations.
John Wiley & Sons.
Zhuang, J., Vandenberg, P., & Huang, Y. (Eds.). (2015).
Managing the Middle-Income Transition: Challenges Facing
the People s Republic of China. Edward Elgar Publishing.