Chapter 1 - Introduction

Question 1

What are the purposes of divisions A-E of the Income Tax Act?

Answer 1

A - Defines liability for tax
B - Computation of income for tax purposes
C - Computation of taxable income
D - Computation of taxable income of non-residents
E - Computation of tax payable

Question 2

What are the purposes of subdivisions a-e under division B of the Income Tax Act?

Answer 2

a - employment income
b - business and property income
c - capital gains and losses
d - other income
e - other deductions

Question 3

How is net income determined?

Answer 3

Division B allows you to compute income from employment, business, capital gains, and other sources

Question 4

How is taxable income determined?

Answer 4

By taking net income from division B and making appropriate deductions under division C

Question 5

How is tax payable determined?

Answer 5

By taking taxable income from division C and applying appropriate tax credits under division E