CMFAS M9 Tax, Nomination, Wills & Trusts question: layered computation of an individual's tax

CMFAS M9Tax, Nomination, Wills & Trusts

In the layered computation of an individual's tax, 'statutory income' (s35) refers to:

A The full income from each source for the year preceding the Year of Assessment
B Total income from all sources after deducting approved donations
C Chargeable income, after deducting all personal reliefs for the year
D Income left after allowable expenses and the S$80,000 relief cap

Show the answer and explanation

Answer: A. The full income from each source for the year preceding the Year of Assessment

Statutory income (s35) is the full income from each source for the year preceding the Year of Assessment. It sits at the top of the three layers, before allowable expenses/donations (giving assessable income) and personal reliefs (giving chargeable income) are deducted.

Common mistake

Statutory income is the starting, un-reduced figure — do not confuse it with assessable or chargeable income, which come after deductions.

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