A comparative analysis with

New Zealand, Australia and

India


By
Tamanna Prajapati
TAXATION OF
INDIVIDUALS
GEOGRAPHICAL OVERVIEW
History of Income tax
Who is liable to pay tax?
Proof required for filing tax
Income tax structure- Individual & Minor
Income you must declare
Conclusion

SUMMARY
NEW ZEALAND AUSTRALIA INDIA
The Income
Assessment Act of
1891 introduced New
Zealands first income
tax and the principle
of progression into
New Zealands
taxation system.

The top marginal rate
of income tax was
reduced from 66% to
33%.
Queensland
introduced income
tax in 1902 by the
Income Tax Act of
1902.

During the 1980s,
the top marginal
rate of income tax
was only 21%.


Income tax was
introduced in 1860,
abolished in 1873 and
reintroduced in 1886.

Income tax levels in
India were very high
during 1950-1980, in
1970-71 there were 11
tax slabs with highest
tax rate being 93.5%.
HISTORY OF INCOME TAX


NEW ZEALAND AUSTRALIA INDIA
As per the Tax
Administration Act
1994, Interpretation
section-
Taxpayer means a
person who
(a) is liable to perform, or
to comply with, a tax
obligation; or
(b) may take a tax
position whether as
principal, or as an agent
or employee or officer of
another person, or
otherwise.

As per the Income
Tax Assessment
Act 1936-
"taxpayer" means
a person deriving
income or
deriving profits or
gains of a capital
nature.

As per the Income Tax
Act 1961-
an "Assesse" means a
person by whom any tax
or any other sum of
money (i.e. penalty or
interest) is payable
under the Act.

WHO IS LIABLE TO PAY TAX

NEW ZEALAND AUSTRALIA INDIA
Taxation in New Zealand is
collected at a national
level by the Inland Revenue
Department (IRD) on behalf
of the Government of New
Zealand.

In New Zealand, it is not
compulsory for every
individual (e.g. baby, child)
to have an IRD number, but
if you or your children are
earning income you have
to pay tax. If you do not
have an IRD number, tax
will be deducted at a no-
declaration rate.

Income tax is collected by
the Australian Taxation
Office for the
Government of Australia.

People apply for tax file
number (TFN). Before you
start work, or soon after,
you may need to get a
tax file number (TFN)
individuals form (NAT
1432).

Income Tax Department
functions under
the Department of
Revenue in Ministry of
Finance. It is responsible for
administering and collecting
direct tax.

It is mandatory to have a
Permanent Account Number
(PAN). Permanent Account
Number (PAN) is a ten-digit
alphanumeric number,
issued in the form of a
laminated card, by an
Assessing Officer of the
Income Tax Department.
PROOF FOR FILING TAX RETURN
NEW ZEALAND AUSTRALIA INDIA
INCOME TAX STRUCTURE

The personal tax years runs
from 1 April to 31 March

The financial year runs from
1 July to 30 June
The financial tax year runs from
1 April to 31 March

NEW ZEALAND AUSTRALIA INDIA
A minor is a natural person
resident in New Zealand
who is under 16 years of age

Children's tax exempt income:
From 1 April 2012 the tax credit
for children was withdrawn and
replaced with a limited income
exemption for children.
The main change was that
employers and scheduler
payment payers are now
required to deduct tax from
the payments they make to
children regardless of their level
of income.
Under the new limited income
exemption, a school child does
not need to pay tax on income
of less than $2,340 which would
not ordinarily be taxed before
they were paid.



A minor is a person who
is under 18 years of age.
MINOR INCOME

Taxable
income
Tax on this
income
$0 $417 Nil
$417 $1,307 65c for each
$1 over $416
$1,308 and
over
45% of total
income
A minor is a person who is
under 18 years of age.

Taxability of income of a
minor is concerned, up to
Rs.1,500 any income earned
by a minor is exempt. In case
income earned is more than
Rs 1,500 then the income is
clubbed with the parent
whose income is higher and
it will be continued to be
clubbed with the same
parent


NEW ZEALAND AUSTRALIA INDIA
1) Salary and Wages
2) Business and Self-
Employed Income
3) Income from
Investments
4) Rental Income
5) Overseas Income


1) Employment
income
2) Business,
partnership and trust
income
3) Investment income
4) Capital gains
5) Foreign Income
6) Other Income


1) Income from salaries
2) Profits and gains of
business or profession
3) Income from house
property
4) Capital gains
5) Income from other
sources



INCOME YOU MUST DECLARE
NEW ZEALAND AUSTRALIA INDIA
Salary and Wages

What is PAYE?
PAYE is the tax your employer
deducts from your salary and
wages.
If your income is from salary,
wages, benefits or taxable
pensions, your tax will
automatically be deducted
under the PAYE (pay as you
earn) system.
If you don't complete a tax
code declaration, your tax
will be deducted at the
no-notification rate of 45
cents in each dollar.

Employment income

Salary and wages
Salaries and wages are
payments made:
under an employment
contract
As remuneration for
services.

Salary and wages income
includes:
salary and wages
commissions
bonuses
income from part-time
or casual work
parental leave pay
amounts for lost salary or
wages paid.
Income from salaries

All income received as salary
under employer-employee
relationship is taxed under this
head, on due or receipt basis,
whichever arises earlier.

Salary comprises of 5
components namely:
Basic Salary
Fees, Commission and Bonus
Allowances
Perquisites
Retirement Benefits.

1) SALARY INCOME

NEW ZEALAND AUSTRALIA INDIA
Income chargeable as
income under this head
xxx
Less: Expenses deductible
under this head
(xx)
Business, partnership and
trust income
The net income you receive
from carrying on a business is
assessable income and you
need to declare it on your tax
return.
You may receive income as a:
sole trader (self-employed)
partner in a partnership
beneficiary of a trust
Director or employee of a
company.

2) BUSINESS INCOME
The computation of income under
the head "Profits and Gains of
Business or Profession" depends on:
If regular books of accounts are
not maintained,
However, if regular books of
accounts have been maintained
and profit and loss account has
been prepared,
Net Profit as per profit and loss account xxx
Add : Inadmissible expenses debited to
profit and loss account
xx
Add: Deemed incomes not credited to
profit and loss account
xx
Less: Deductible expenses not debited
to profit and loss account
(xx)
Less: Incomes chargeable under other
heads credited to Profit & Loss A/c
(xx)
Profits and Gains of
business or profession

Business and Self-
Employed Income
Business with no
employees, turnover of
less than $60,000 and
unregistered for GST:
A final income tax rate of 14%
for businesses that are not
traders and 7% for businesses
that trade in goods (such as
retailers) will be paid on
business turnover.

NEW ZEALAND AUSTRALIA INDIA
Portfolio investment entity
(PIE)
A portfolio investment entity
(PIE) is a type of entity that
invests the contributions from
investors in different types of
investments. PIEs came into
existence on 1 October 2007.

Notified foreign investors
(NFI)
There is also a new class of
investor, a notified foreign
investor. A non-resident who
holds an investment in a foreign
investment PIE may notify the PIE
that they wish to be treated as
a notified foreign investor.

You must show investment
income on your tax return,
including:
interest, including children's
savings accounts and life
insurance bonuses
dividends you are paid as a
shareholder
Income or credits you
receive from any trust
investment product.

In India, Investment Income
comes under Income from
other sources.
Example: Dividends
3) INVESTMENT INCOME
NEW ZEALAND AUSTRALIA INDIA
Generally, any income
that you receive from
renting out property will
be liable for income tax,
so you must include it in
your tax return.
Even if you have
determined that you are
no longer a resident for
New Zealand tax
purposes, you will still be
required to pay tax on
any income that you
derive that has a New
Zealand source.
You must declare the
full amount of any rent
and rent-related
payments that you
receive, or become
entitled to, when you
rent out your property -
whether paid to you or
your agent.
If you receive rent-
related payments in
the form of goods and
services, you must
work out and declare
their monetary value.

Income under this head is
taxable if the assesse is
the owner of a property
consisting of building or
land appurtenant thereto
and is not used by him for
his business or professional
purpose.
An individual is eligible to
claim any one property as
Self-occupied if it is used
for own residential
purpose.
4) RENTAL INCOME
Income from House property
NEW ZEALAND AUSTRALIA INDIA
There is no separate
tax on capital gains -
a gain is treated as
part of your total
income and taxed
accordingly.
It includes gains from
selling real estate,
shares and managed
fund investments.
Short Term Capital
Gain (STCG):
If the Asset is held for less
than 36 Months
Long Term Capital
Gain (LTCG):
If the Asset is held for
more than 36 Months
It includes real estate,
equity shares, bonds,
jewellery, paintings,
art(under section 2(14)
of the I.T. Act, 1961).
5) CAPITAL GAINS
New Zealand has no
general capital gains
tax.
There is no Capital
gains tax on New
Zealand investments
but it applies to
foreign debt and
equity investments.

What is Capital gains?
If you sell an asset and make profit you make a capital gain.
NEW ZEALAND AUSTRALIA INDIA
If you're a New
Zealand resident for
tax purposes, you are
taxed on your
worldwide income,
so you must declare
any foreign income
in your income tax
return.

If you're an Australian
resident for tax
purposes, you are
taxed on your
worldwide income,
so you must declare
any foreign income
in your income tax
return.

If youre a citizen of
India who leaves India
for employment
purposes, and stays
outside India for more
than 182 days, then
such Income earned
outside India will not
be taxable in that
year.
6) FOREIGN INCOME
NEW ZEALAND AUSTRALIA INDIA
New Zealand being a
developed country
has a relatively
simple tax system
when compared to
other countries.
New Zealand
receives a higher
proportion of its
income taxes from
taxing personal
income tax.
Australia tax system
is improving and will
continue to
improve in the next
10-20 years.
55% of the
population in
Australia pay their
Income tax.
Taxation is Non-
Productive & of
complex nature.
Only 2%-3% of the
population pays their
Income tax.
CONCLUSION