ASSESSABLE INCOME Meaning and
Definition
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Assessable income refers to the total income earned by an individual or entity that is subject to taxation by the government. It is the amount on which the tax liability of an individual or entity is calculated. Assessable income includes various types of income such as wages, salaries, tips, commissions, rental income, dividends, interest earned, capital gains, and any other form of monetary compensation received.
The assessment of income for taxation purposes is usually done by the tax authority or the relevant government agency. They evaluate and determine the assessable income based on the applicable tax laws, regulations, and guidelines. The assessment process involves examining the financial records, documents, and declarations provided by the individual or entity.
In certain cases, some deductions or exemptions may be applied to assessable income, depending on the specific tax jurisdiction and the nature of the income. However, it is important to note that not all types of income are assessable, as certain types of income may be exempted or excluded from taxation.
Assessable income plays a crucial role in determining the tax liability of an individual or entity. It serves as the basis for calculating the applicable tax rates or brackets, which determine the amount of tax that needs to be paid. Therefore, accurately determining and reporting assessable income is vital to ensure compliance with tax laws, avoid penalties or fines for underreporting, and maintain good financial standing with the tax authorities.
Common Misspellings for ASSESSABLE INCOME
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Etymology of ASSESSABLE INCOME
The word "assessable income" is a term used in taxation and refers to the income that is subject to assessment or evaluation for tax purposes. The term can be traced back to the roots of its two components:
1. Assess: The word "assess" comes from the Old French term "assesser", which means "to set a value on" or "to tax". It can be further traced to the Latin word "assessare", meaning "to fix a tax upon". The concept of assessing income for taxation purposes has been present for centuries, and the term "assess" captures this idea of evaluating or determining the value of income.
2. Income: The term "income" has its roots in the Latin word "incommodum", meaning "gain" or "profit". In Middle English, it evolved into "incomen" and later became "income".
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