Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Act current to 2014-09-01 and last amended on 2014-06-27. Previous Versions

Income Tax Act

R.S.C., 1985, c. 1 (5th Supp.)

An Act respecting income taxes

Application provisions are not included in the consolidated text; see relevant amending Acts.

SHORT TITLE

Marginal note:Short Title

 This Act may be cited as the Income Tax Act.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S.C. 1952, c. 148, s. 1.

PART IINCOME TAX

Division ALiability for Tax

Marginal note:Tax payable by persons resident in Canada
  •  (1) An income tax shall be paid, as required by this Act, on the taxable income for each taxation year of every person resident in Canada at any time in the year.

  • Marginal note:Taxable income

    (2) The taxable income of a taxpayer for a taxation year is the taxpayer’s income for the year plus the additions and minus the deductions permitted by Division C.

  • Marginal note:Tax payable by non-resident persons

    (3) Where a person who is not taxable under subsection 2(1) for a taxation year

    • (a) was employed in Canada,

    • (b) carried on a business in Canada, or

    • (c) disposed of a taxable Canadian property,

    at any time in the year or a previous year, an income tax shall be paid, as required by this Act, on the person’s taxable income earned in Canada for the year determined in accordance with Division D.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1970-71-72, c. 63, s. 1 “2”;
  • 1984, c. 1, s.1;
  • 1985, c. 45, s. 1.

Division BComputation of Income

Basic Rules

Marginal note:Income for taxation year

 The income of a taxpayer for a taxation year for the purposes of this Part is the taxpayer’s income for the year determined by the following rules:

  • (a) determine the total of all amounts each of which is the taxpayer’s income for the year (other than a taxable capital gain from the disposition of a property) from a source inside or outside Canada, including, without restricting the generality of the foregoing, the taxpayer’s income for the year from each office, employment, business and property,

  • (b) determine the amount, if any, by which

    • (i) the total of

      • (A) all of the taxpayer’s taxable capital gains for the year from dispositions of property other than listed personal property, and

      • (B) the taxpayer’s taxable net gain for the year from dispositions of listed personal property,

    exceeds

    • (ii) the amount, if any, by which the taxpayer’s allowable capital losses for the year from dispositions of property other than listed personal property exceed the taxpayer’s allowable business investment losses for the year,

  • (c) determine the amount, if any, by which the total determined under paragraph (a) plus the amount determined under paragraph (b) exceeds the total of the deductions permitted by subdivision e in computing the taxpayer’s income for the year (except to the extent that those deductions, if any, have been taken into account in determining the total referred to in paragraph (a), and

  • (d) determine the amount, if any, by which the amount determined under paragraph (c) exceeds the total of all amounts each of which is the taxpayer’s loss for the year from an office, employment, business or property or the taxpayer’s allowable business investment loss for the year,

and for the purposes of this Part,

  • (e) where an amount is determined under paragraph (d) for the year in respect of the taxpayer, the taxpayer’s income for the year is the amount so determined, and

  • (f) in any other case, the taxpayer shall be deemed to have income for the year in an amount equal to zero.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 3;
  • 1994, c. 7, Sch. II, s. 1.