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. Personal tax is usually imposed in a progressive way where the amount of the personal tax increases as the incomes and profits of the individual increases. The total income less any activity that generates tax and other deductions imposed is the amount used to calculate the personal tax to be paid by resident individuals in the given state or country. Another income source that can be used to determine personal tax is the net gain obtained after sale of any property such as goods for sale. Personal tax is imposed on certain income sources non-residents obtain from activities carried out within the state or 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. Individuals and entities that have not been legally identified as corporations are usually imposed on personal tax where 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. There are those incomes that one is nor required to pat the personal income such as the superannuation income and national payment plans after retirement.
Depending on how one receives income, it is important to make payments of … Read More..Read More →