Income Defined - gained derived from labor, capital, or both including the profit derived from the sale or exchange of capital asset.
Income distinguished from
1. Revenue- this term includes all funds or income derived by the government from taxes and other sources. Income is to private entities as revenue is to government.
2. Capital- Income refers to the flow of wealth during a definite period of time, while capital is the fund or a property existing at one distinct point of time.
3. Receipts- consist of capital and income and therefore is broader in scope that income.
Tax Base- a taxpayer’s taxable income for the taxable year.
Taxable Income- the amount of income upon which the tax rate prescribed by law is applied to get the income tax due, depending on the kind of taxpayer.
- Means the pertinent items of gross income specified in the NIRC, less the deductions and/ or personal and additional exemptions if any authorized for such types of income by the NIRC.
Net income must be computed with respect to a fixed period, which for individual taxpayers is a calendar year or a period of 12 consecutive months ending December 31 of every year. Corporations however, may file their income tax returns on a fiscal year basis, or for a period of 12 consecutive months ending on the last day of any month other than December.
Requisites for income to be taxable
1. there must be gain or profit
2. the gain must be received or realized
3. the gain must not be excluded by law or treaty from taxation. Income need not be in cash, it is sufficient that it may be appraised in terms of money.
Income distinguished from
1. Revenue- this term includes all funds or income derived by the government from taxes and other sources. Income is to private entities as revenue is to government.
2. Capital- Income refers to the flow of wealth during a definite period of time, while capital is the fund or a property existing at one distinct point of time.
3. Receipts- consist of capital and income and therefore is broader in scope that income.
Tax Base- a taxpayer’s taxable income for the taxable year.
Taxable Income- the amount of income upon which the tax rate prescribed by law is applied to get the income tax due, depending on the kind of taxpayer.
- Means the pertinent items of gross income specified in the NIRC, less the deductions and/ or personal and additional exemptions if any authorized for such types of income by the NIRC.
Net income must be computed with respect to a fixed period, which for individual taxpayers is a calendar year or a period of 12 consecutive months ending December 31 of every year. Corporations however, may file their income tax returns on a fiscal year basis, or for a period of 12 consecutive months ending on the last day of any month other than December.
Requisites for income to be taxable
1. there must be gain or profit
2. the gain must be received or realized
3. the gain must not be excluded by law or treaty from taxation. Income need not be in cash, it is sufficient that it may be appraised in terms of money.
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Tax Advisor
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