Concerned With The Determination Of Net Taxâ€Myassignmenthelp.Com

Question: Discuss About The Concerned With The Determination Of Net Tax? Answer: Introducation The present case study is concerned with the determination of the net tax payable by Manpreet. As it is evident from the case study it is understood that Manpreet arrived in Australia as an overseas student enrolled in an academic course with a duration for more than six months in an Australian institute[1]. Any overseas student enrolled in a course having duration of no less than six months shall be considered as an Australian resident. To determine the taxable situation of Manpreet it is necessary to work out the residential status of an individual whether an individual is an Australian or overseas resident for the purpose of assessment. As evident from the case study Manpreet will be regarded as an Australian resident for assessment purpose since he is enrolled in a course which has the duration of more than six months in Australian institute[2]. Furthermore, Manpreet is a part time office assistant with an Australian organization for a monthly salary of $45,000. Manpreet also incurred expenditure related to educational purpose. As evident Manpreet incurs an expenditure of $18,000 which cannot be considered as allowable deductions. A person can claim allowable deductions for self-educational purpose if their study is linked with their employment or given an individual received a assessable bonded scholarship[3]. It should be understood that educational courses should have sufficient relation to the present job and Accounting; Improve the required skills or knowledge which a person requires in their current job If it is probably leading to an improvement in the income from their current employment A person will not be able to claim allowable deductions for the purpose of self-education for those courses which has no sufficient link with the present job even though it; Might have general association to it; or Offers a person with an opportunity for a new employment As defined under section 8-1 of the ITAA 1997 an expenditure is allowable as deductions if there is an adequate link between the expenditure and the revenue generating activities, such that its required aspect is associated with work and not private or domestic in nature[4]. As decided in Lunney v. FC of T; Hayley v. FC of T(1958) 100 CLR 478; (1958) for an expense to qualify the test under section 8-1 of the ITAA 1997 must own the necessary feature of an outgoing incurred in gaining the taxable income or comprise of an income generating expenditure[5]. The viewpoint is held up under Ronpibon Tin NL v. FC of T(1949) where the income should have the connection between the outgoing and assessable income because the outgoing is supplementary and significant in gaining a taxable income[6]. Hence, the expenses incurred by Manpreet will not be regarded deductions. It should be noted that deductions are not allowed for self-educations expenses if the matter of self-expenditure is designed to get a new job or present an opportunity of new income[7]. As defined under section 8-1 of the ITAA 1997 expenditure are regarded as allowable deductions if there is an adequate relations between the expenses and the income generating capacity, such that it has the necessary characteristics of work and it is does not have the nature of domestic or private[8]. One cannot consider adequate that expenses are perquisite in producing the taxable income. The expenditure should be important and incidental to the original activities that results in producing the assessable income[9]. Citing the reference of FC of T v. M I Roberts 92 ATC 4787 the federal court by imposing the principles of Maddalena permitted the mine manager to deduct the expenditure associated with the MBA. As stated under section 8-1 of the ITAA 1997 expenditure incurred by Manpreet on new mobile phone signify an important aspect in gaining the assessable income and Manpreet will be allowed to claim deductions for it[10]. Assumptions: Receipt of sum from India represents a income from trust and it will be considered for assessment under subsection 6AB(1) As the taxable income of Manpreet is lower than $37,000 hence the amounts if lowered by 1.5 cents for each amount of the dollar over $37,000. Hence, Manpreet can claim a low income tax offset of $212.5[11]. Since the total amount of taxable income of Manpreet is $8,609 therefore a Medicare Levy of 2 per cent is applicable to arrive at the taxable income[12]. Computation of Assessable Income Reference List: Barkoczy, Stephen. "Core Tax Legislation and Study Guide."OUP Catalogue(2017). Barkoczy, Stephen. "Foundations of Taxation Law 2016."OUP Catalogue(2016). Barrett, Jacqui, and Alessar Elsayed. "Deductibility of employer contributions to employee remuneration trusts-where are we at?."Governance Directions66.5 (2014): 307. James, Kieran. "The Australian Taxation Office perspective on work-related travel expense deductions for academics."International Journal of Critical Accounting8.5-6 (2016): 345-362. ROBIN, H.AUSTRALIAN TAXATION LAW 2017. OXFORD University Press, 2017. Russell, Tim. "Trust beneficiaries and exemptions from CGT: Reflections on the Oswal litigation."Taxation in Australia51.6 (2016): 296. Saad, Natrah. "Tax knowledge, tax complexity and tax compliance: Taxpayers view."Procedia-Social and Behavioral Sciences109 (2014): 1069-1075. Somers, Renuka, and Ashleigh Eynaud. "A matter of trusts: The ATO's proposed treatment of unpaid present entitlements: Part 1."Taxation in Australia50.2 (2015): 90. Tran-Nam, Binh, and Michael Walpole. "Tax disputes, litigation costs and access to tax justice."eJournal of Tax Research14.2 (2016): 319. Woellner, Robin, et al.Australian Taxation Law Select: legislation and commentary. CCH Australia, 2013. Low Income Earners(2017) Ato.gov.au https://www.ato.gov.au/Individuals/Income-and-deductions/Offsets-and-rebates/Low-income-earners/ Medicare Levy(2017) Ato.gov.au https://www.ato.gov.au/Individuals/Medicare-levy/ [1] Barkoczy, Stephen. "Foundations of Taxation Law 2016."OUP Catalogue(2016). [2] Saad, Natrah. "Tax knowledge, tax complexity and tax compliance: Taxpayers view."Procedia-Social and Behavioral Sciences109 (2014): 1069-1075. [3] Russell, Tim. "Trust beneficiaries and exemptions from CGT: Reflections on the Oswal litigation."Taxation in Australia51.6 (2016): 296. [4] Woellner, Robin, et al.Australian Taxation Law Select: legislation and commentary. CCH Australia, 2013. [5] Barrett, Jacqui, and Alessar Elsayed. "Deductibility of employer contributions to employee remuneration trusts-where are we at?."Governance Directions66.5 (2014): 307. [6] ROBIN, H.AUSTRALIAN TAXATION LAW 2017. OXFORD University Press, 2017. [7] Somers, Renuka, and Ashleigh Eynaud. "A matter of trusts: The ATO's proposed treatment of unpaid present entitlements: Part 1."Taxation in Australia50.2 (2015): 90. [8] Barkoczy, Stephen. "Core Tax Legislation and Study Guide."OUP Catalogue(2017). [9] Tran-Nam, Binh, and Michael Walpole. "Tax disputes, litigation costs and access to tax justice."eJournal of Tax Research14.2 (2016): 319. [10] James, Kieran. "The Australian Taxation Office perspective on work-related travel expense deductions for academics."International Journal of Critical Accounting8.5-6 (2016): 345-362. [11] Low Income Earners(2017) Ato.gov.au https://www.ato.gov.au/Individuals/Income-and-deductions/Offsets-and-rebates/Low-income-earners/ [12] Medicare Levy(2017) Ato.gov.au https://www.ato.gov.au/Individuals/Medicare-levy/