Ch.3- Q.3.1 - How is taxable income is calculated?
The solution (in the book) says:
Income earned
+ Income in kind
+ Gross investment income
- Tax-free income
- Tax-free expenditure
- Allowance.
My question is: Why TDS on investment income is not shown as a deduction from gross income? The book states: "For tax purposes, the grossed up equivalent (i.e. inv. income) is included as taxable income, and the TDS can be offset against the person's tax liability."
2nd: Should the above calculation include means-tested benefits? Why?
Please Help.
Last edited by a moderator: Aug 10, 2008