INCOME TAXATION
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Transcript of INCOME TAXATION
Concept of Income
By: Armia P. Leonardo
Income amount of wealth accumulated
plus savings and the value of the personal consumption .
“income” refers to all earning derived from service rendered (labor), from capital (business or investment).
Return on Capital• Sale = income• Sale must exceed its related
cost• Gain – a profit in excess of
capital as a result of exchange transactions.
Distinctions between Income and other terms
CapitalCapital Income
original investment or fund used in order to generate earnings which is called income. Wealth
Service of wealth
Illustration
CapitalIncome
Another Illustration
Capital
Income
RevenueRevenue Income
funds accruing to the treasury of the government derived from tax, donation, grants and any other source.
refers to the earnings of individual persons, partnership, corporation or estate and trust whether or not subject to tax.
ReceiptsReceipts Income
cash collected over a business period. may include capital as well as its earning
amount after excluding capital invested , cost of good sold and other deductions allowed by law .
Nontaxable Income • Should be excluded by
law or treaty from taxation .
Taxable Income
• Amount of income which the tax rate prescribed by law.
To God be the Glory!
03-22-15