An individual or an entity is required to pay tax depending on the amount of income or even profits they receive and this type of tax is commonly referred to as the personal tax. The amount of personal tax one is required to pay is determined by the rates imposed in the given state or country on the incomes and profits. These tax rates imposed are usually progressive where the amount of personal tax to be paid increases as the incomes and profits of the individual increases. The income used for calculation of personal tax for resident individuals in a given state or country is usually their total income less any activity that generates tax and other deductions imposed. The net gain obtained after sale of any property such as goods for sale that have been held is taken as part f the income that personal tax is imposed. For non-resident individuals in the country or state, personal tax is only imposed of income sources of certain activities carried within the region.
There are various principles that govern the personal tax systems and how it is imposed on individuals such as the taxpayers and rates, residents and non-residents, defining income, deductions allowed, business profits among others. Imposition of personal tax is done on individuals and entities that have not been legally identified as corporations and the rates depends on the slab where the income falls. The defining income where personal tax is charged may include the money they receive from services compensation, sale of property and goods, dividends, interest, royalties, rents, pensions, annuities among others. The only incomes exempted from personal tax includes those from superannuation and national payment plans after retirement.
Depending on how one receives income, it is important to make payments … Read More..Read More →