Give a definition and explain the following terms in relation to the administrative aspect of preparing an individual tax return

1. Tax documentation
2. Tax collection
3. PAYG Withholding
4. Assessment
5. Tax Obligation

Solutions

Expert Solution

a.Tax Documentation: ITR filling process involves the requirements of various documents.Having all the documents required to file Income Tax return(ITR) can make this process easier. Tax documents help

to provide written evidence of your income and expenses
to help the tax agent in preparing your return
resolve the issues related to disputes in assessments.
to avoid exposure to penalties.

Following are the documents that should be collected before filing of ITR

Asset aquisition or disposal documents.
Interest certificates from banks and post office.
Tax deductible gifts, donations and contriutions
Govt benefits and pensions
Tax Saving Investment Proofs
Documentary proofs to claim deductions

b. Tax Collection:

Tax collection is the process followed by the government for collecting money from people and businesses who are required to pay taxes as per the applicable law and the amount of tax that government gets from this activity

c.PAYG Witholding: Pay as you go (PAYG) is a withholding tax which requires you to pay incremental amounts of your business’s income to the ATO. These payments accumulate towards the expected end of year income tax liability. Before you file your ITR, it is important to finalise your PAYG installments. This will ensure that your income tax assessment takes into account the contributions you have paid throughout the year.

d. Assessment: Once the Taxpayer has filled his ITR, the income tax department will then analyse the details provided in ITR filed by taxpayer,this examination and analysis of details submitted by taxpayer is known as assessment.

e.Tax Obligation: It means any amount of tax owing by a person to tax collecting authority.Itis the duty of taxpayer to all the applicable taxes,interests and penalities he is liable for.

ekkarill92 answered 2 years ago

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