These are my notes for Taxation 3 that I used and recommend to someone who is studying taxation 3. These notes specifically focus on gross income, and they also include a section of the act and case laws applicable to each case relevant. Good luck on your journey of Taxation. Enjoy.
Gross Income
Section 1 define gross income as follow:
Resident: Gross income is the total amount in cash or otherwise received by or
accrued to or on behalf of a resident during any year of assessment excluding receipts
or accruals of capital nature.
Non-resident: Gross income is the total amount in cash or otherwise received by or
accrued to or on behalf of such non-resident from source with the republic during
any year of assessment excluding receipts or accrual of capital nature.
There are specific inclusion of amounts to gross income and and some of them includes
receipts or accrual of capital nature, see section 1 paragraph a to n of gross income
definition. In most cases, if receipts or accruals are of capital nature, portion of income
will be included in taxable income as capital gain tax.
Most of gross income terms (e.g those highlighted above) are explained and interpreted
by court cases and will be used to explained some gross income terms that are
important and highlighted above.
Resident – section 1 definition.
The definition of resident include both natural persons and persons other than natural
person (companies, special trust and more). A detailed explanation of resident will be
covered in resident module, this module will only focus on gross income.
Amount in cash or otherwise
Lategan- the word amount must be given a wider meaning and include not only money
but value of whatever property earned by taxpayer which has monetary value.
Brummeria Renaissance- (interest free loan), a benefit that has monetary value is
included in gross income. It doesn’t necessary have to be convertible to money, it only
need to have a monetary value attached to it.
Received by or accrued to
An amount must either be received by or it must accrue to a taxpayer during a year of
assessment to
be included in the taxpayer’s gross income for that year. If a taxpayer did not receive an
amount or if
an amount did not accrue to the taxpayer, the amount is not gross income and therefore not
subject
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