Taxation Law

First case relates to transactions pertaining to an individual entity

Nicholas being a resident of Toowoomba , is categorized as an `Individual ' entity for the purpose of Income tax as per Income Tax Assessment Act , 1936 The above legislation first categorizes the `entity ' in its section 470 as follows "entity " means any of the following (a ) a company (b ) a partnership (c ) a person in the capacity of trustee

any other person

Income tax is assessable on the basis of entity and Nicholas as a person , coming under the above category (d ) is assessable

as an University Teacher , whose income in all probability will be above taxable level of income (CCA ,2009

He has done accounting work with Royal Hotel on part time basis and has received compensation of 28 ,000 for his work . This work was done within Australia and it has no basis to be called an exempt income or non- assessable income . Being an entity for Income tax , this figure becomes assessable income , because it comes under the category of ordinary income and statutory income as per Section 4-10 of Income Tax Assessment Act , 1997 (Peterhenderson , 2009

The next question is whether to include 2 ,700 being the value of holiday provided to him by Royal Hotel . This figure has to be taken notionally as a fringe benefit and will come under the category of external residual fringe benefit . The taxable value of external residual fringe benefit is equal to the arm 's length purchase price less the...