Taxation : Three Sources of Income

Describe about the Taxation for Three Sources of Income.

(a) According to the provisions and TR 98/1 of Australian Taxation System, assessable income includes three sources of income i.e. personal earnings from salaries, business earnings and capital profits[1]. However, there are exempted incomes that are not required to be included in the assessable income like government allowance, disability pensions and such other grants[2]. As cited under the income tax case law of the year 2016 under BTC 3150 for assessable income 18 Arthur Murray, an income received before the work is done then it shall not be included in the assessable income.

In the given situation, Mary Johnson, an Australian resident is liable to pay tax on incomes earned during the period 1.07.2015 to 30.04.2016 as per ITAA 97 on 30 June 2016. As per the rulings under ITAA 97, following transactions are assessable under section 6-5 ITAA 97 in the books of Mary for 30 June 2016:

Salary and commission income

Allowance on Entertainment

Interest received excluding withholding tax

Receipt of money for early retirement

Leave salary

Cash prize for winning a contest

However, withholding tax shall be deducted from the total tax liability. Additionally, payment received by Mary as a part of medical workers compensation shall not be included in assessable income under section 6-5 ITAA 97.


Computation of Assessable income in the books of Mary Johnson, for the year 30 June 2016 under section 6-5 ITAA 97[3]:


Amount $

Salary income from Prime Television (1/7/2015 to 30/04/2016)




Entertainment allowance


Interest received on account with ANZ Bank


Interest received (Note 1)


Receipt from an approved early retirement scheme


Receipt of leave salary


Cash prize on 31/01/2016


Receipt for a severe injury during the client visit as workers compensation from Prime Television


Total Assessable Income


Allowable Deductions:


There are no allowable deductions u/s 6-5 ITAA 97

Taxable Income u/s 4-15 ITAA 97


Table1: Assessable Income

(Source: Created by author)

Tax Payable for the year 30 June 2016

Taxable Income $

Tax rate on Income

Taxable amount $

1- 18,200


18,201- 37,000

19c for each $1 over $18,200


37,001- 80,000

$3,572 plus 32.5c for each $1 over $37,000


80,001 – 135,000

$17,547 plus 37c for each $1 over $80,000





Low Income Tax Offset



Add: Medicare Levy @2%



Less: Withholding Tax



Less: Withholding PAYG Tax



Less: Withholding Tax on long service leave



Total Tax payable



Table2: Tax Payable

(Source: Created by author)

Note 1: Receipt of interest from term deposit account from Queenstown, New Zealand was subjected to 15% withholding tax. Net amount received was $850 therefore; gross amount taxable would be $1000. Further, the withholding tax $150 shall be deducted from the amount of tax payable.

Note 2: Salary from Brisbane Lions as a recruiter officer, which was joined by Mary on 25 June 2016, has not been received during the current tax year 2016. Therefore, no tax treatment shall be done for the same.

Note 3: Since the taxable income of Mary in the current tax year 30 June 2016 is higher than $66,667, therefore tax offset as a low- income earner under ITAA97 is not available to claim as deduction[4].

Reference List

Dubin, Jeffrey A, The Causes And Consequences Of Income Tax Noncompliance (Springer Science+Business Media, LLC, 2012)

Gebauer, J. E. et al, “The Psychological Benefits Of Income Are Contingent On Individual-Level And Culture-Level Religiosity” (2012) 4 Social Psychological and Personality Science

Hoffman, William H, James E Smith and James H Boyd, Individual Income Taxes, 2013 (South-Western/Cengage Learning, 2013)

Weltman, Barbara and J. K Lasser, J.K. Lasser’s 1001 Deductions And Tax Breaks 2012 (John Wiley & Sons Inc., 2012) has been providing exceptional thesis help to students for the last eight years. We offer our thesis writing services for undergraduate, postgraduate as well as PhD levels. Only PhD qualified writers work on the student’s thesis. We ensure that each thesis is plagiarism-free and fully customizable.

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Boom Grades
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Classic English Literature
Awesome Job... you are the best!
Customer 452531, November 27th, 2021
English 101
perfect! thanks!
Customer 452543, December 1st, 2021
Religious studies
I recommend this service they always help. I got an A in this project thanks.
Customer 452507, October 5th, 2021
Great content.
Customer 452549, February 8th, 2022
Exercise Science
Thank you so much for your time.
Customer 452545, December 5th, 2021
Classic English Literature
Great Work as Usual. Thank you . I received an A on the paper!
Customer 452531, November 9th, 2021
English comp
Got a 94% thank you!
Customer 452509, June 27th, 2021
Classic English Literature
Absolutely LOVE the essay I received. I really appreciate it so much.
Customer 452529, October 25th, 2021
english comp
Thank you for all your hard time.
Customer 452509, June 27th, 2021
Public Health
Thank you so much !!
Customer 452589, November 28th, 2023
world civilization
Thank you for the quick response
Customer 452509, June 27th, 2021
Absolutely LOVE having help especially from the person who wrote this last one. THANK YOU
Customer 452529, November 19th, 2021
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat