Question

Assignment Problem One - 1 (Application of General Tax Principles) Many of the provisions of the Income Tax Act are written in very general terms. For example, ITA 18 lists a number of general characteristics that must apply before a particular expense can be deducted in the computation of business income. Required: Indicate the situations in which such generally worded provisions of the Income Tax Act will be overridden.

Answer 1

There are three types of provisions in an act,

One is general provision: which would apply for all cases, similar to what is explained in the question.

Second is special provision: which would apply only in specific cases which fulfill the criteria under that provision.

Third are overriding provisions: which would override any other provision (general or special) under the act.

Thus there would be other provisions which would override genera provision as explained above.