Question

What is a deduction and what generally determines whether or not a deduction is allowable? 300–350 words. ACCORDING TO ATO AUSTRALIA

Answer 1

Answer:-

Deduction is an allowable expense from Gross Income to arrive at Taxable Income.Deduction reduces the tax liability of an Assessee.

Determining whether a deduction is allowed or not depends on the law of Country.According to ATO Australia,a person can directly claim deduction of expenses that directly relate to earning that Income.If that money is reimbursed back,you cannot claim deduction of the same.For example,an employee can claim expenses like laundry,telephon t, overtime meals,travel,etc.that were in realtion to work.However,personal expenses are not allowed as deduction.

An Assessee can also claim deductions of gifts,donations,cost of managing tax affairs,interest,dividends,etc.