Taxation: Computation of Taxable Income and Fringe Benefit

TAXATION

Contents
INTRODUCTION...........................................................................................................................2
TASK...............................................................................................................................................2
Question No 1 Taxable Income Computation:.......................................................................2
Question No 2 Computation of Taxable Value of Fringe Benefit:........................................5
CONCLUSON.................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Taxation simply means imposition of the tax on income earned by various groups such as
individual, companies, partnership firms etc. The purpose of taxation to generate revenue for the
government department so that they can meet out their expenditure towards the public welfare.
In this statement income tax has been calculated in different case scenario and also fringe
benefits to be computed using the multiple information.
TASK
Question No 1 Taxable Income Computation:
 Legal provisions with respect to Medicare levy and Medicare levy Surcharge:
Medicare levy is something which every taxpayer needs to pay irrespective of the fact
that whether these individuals hold the private health insurance facility or not. Medicare
levy will be imposed on the taxable income without any threshold limit but there is a
limit to impose such surcharge if income exceeded certain limit. The Medicare levy
surcharge are being imposed on the citizen of Australia whose earnings are being
exceeded beyond $ 90000 on every financial year but they don’t have private hospital
insurance. The purpose of levying such a surcharge to ensure that the individual who are
earning higher will take health insurance cover from the private hospital (Lang, Pistone,
and Spies, 2020). The limit for implementing the MLS is $90000 for singles and in case
of couples or families such limit will be extend to $180000. It means that if income
exceeded the above limit then MLS will be applicable on that and paid along with income
tax. The rate of MLS has been 1%, 1.25%, 1.50% respectively depending upon the
income of the individual. If a person wants to avoid MLS, then a valid hospital insurance
cover to avoid the same and it is necessary that such cover must be through registered
Australian health fund.
 The following are certain categories which are being exempted from the payment of MLS
mentioned below:
 Does not entitled for any medical benefits.
 Person is of Foreign resident for the purpose of taxation.
 Person who is blind permanently and also the pensioner.
 The person who has obtained sickness allowance from the centre link.