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Question 1

Enumerate Gross Income

CGIRDAPP

Answer 1

(1) Compensation for services in whatever form paid, including, but not limited to fees, salaries, wages, commissions, and similar items;

(2) Gross income derived from the conduct of trade or business or the exercise of a profession;

(3) Gains derived from dealings in property;

(4) Interests;

(5) Rents;

(6) Royalties;

(7) Dividends;

(8) Annuities;

(9) Prizes and winnings;

(10) Pensions; and

(11) Partner’s distributive share from the net income of the general professional partnership.

note
- may include Treasures & gambling gains

Question 2

What are EXCLUDED from Gross Income?

Answer 2

LAGCRIM

sec. 32 NIRC

1. Life insurance
2. Amount received by Insured as Return of Premium
3. Gifts, Bequests, and Devises
4. Compensation for Injuries/Sickness
5. Income exempt under a treaty
6. Retirement benefits, pensions, gratuities, etc.
7. Misc.

Question 3

what are the allowable deductions (AD)? for NET INCOME

ExIn TaLoBa ChaRe Pen Dep Dep

Answer 3

EIT LBC RPDD, also known as itemized deductions

Expenses
Interest
Taxes

Losses
Bad Debts
Charitable contributations

research & dev’t
pensions
depreciations
depletion

these are items allwoed by law to be deducted from GI to arrive at NI subject to tax

note
1. not applicable to compensation earners