A Brief Note On Income Tax Assessment Act

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Question - 1 According to Income tax assessment act (ITAA) 1997, if an individual is Australian resident, he is entitled to pay taxes from all sources throughout the world under s6-5(2) & s6-10(4). Tax is executed on basis of 3 categories i.e., Income from Personal exertion (Wages), business (Profit from firm) and property (Rent). Tax imposed in all these income are transferred to the Federal Government which looks after it. In this scenario, Suzette had purchased a farm earlier 25 years ago wherein she was exempted to pay CGT (Capital Gain Tax), as CGT was implemented from 20 September 1985. She sold this farm on 1 July 2010. Here the income she earned by selling the farm comes under CGT. With an intention to retire to New South Wales…show more content…
This involves isolated transactions, selling units again and again is not a normal business process. This case comes under Whitefords Beach, which involves isolated transactions. Lastly, End of December 2013 she sold the units, she is titled to pay Income tax on profits. With the proceeds she purchased a land again which is vacant land which is a capital asset in turn nothing to do with income tax implication as it comes under CGT . She is also entitled to get credits from tax implications from purchase of building material, labour cost and transportation expenses to the property and connecting all the utilities connection in regard to the property. The registers have to be maintained in case the Australian Taxation Office (ATO) may verify the authorisation in case of calculation shows are accurate . QUESTION – 2 A type of tax imposed on capital gains incurred by individuals and corporations. When a person buys or sells the capital asset for a price higher than the purchase price, it leads to capital gain which are profits that an investor realizes. CGT are only generated when an asset is realized, not while it is held with an investor. Gains are regime as a form of statutory income under Income Tax Assessment Act (ITAA) 1997. Disposal of Property (Subdivision 104-A) CGT event A1 occurs when a person disposes a CGT asset as per s 104-10(1) of ITAA 1997. Disposal occurs
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