Commercial arithmetic II lesson on income tax
Answer Text: Commercial arithmetic II lesson on income tax:Taxes on personal income is income tax. Gross income is the total amount of money due to the individual at the end of the month or the year.Gross income = salary + allowances / benefits. Taxable income is the amount on which tax is levied. This is the gross income less any special benefits on which taxes are not levied. Such benefits include refunds for expenses incurred while one is on official duty. In order to calculate the income tax that one has to pay, we convert the taxable income into Kenya pounds K£ per annum or per month as dictated by the by the table of rates given. Relief:-Every employee in Kenya is entitled to an automatic personal tax relief of sh.12672 p.a (sh.1056 per month)-An employee with a life insurance policy on his life, that of his wife or child, may make a tax claim on the premiums paid towards the policy at sh.3 per pound subject to a maximum claim of sh .3000 per month.
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