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

Act current to 2014-06-12 and last amended on 2014-01-01. Previous Versions

Marginal note:Basic exemption
  •  (1) An individual’s basic exemption for a taxation year is

    • (a) $40,000, in the case of an individual other than a trust;

    • (b) $40,000, in the case of a testamentary trust or an inter vivos trust described in subsection 122(2); and

    • (c) in any other case, nil.

  • Marginal note:Multiple trusts

    (2) Notwithstanding paragraph 127.53(1)(b), where more than one trust described in that paragraph arose as a consequence of contributions to the trusts by an individual and those trusts have filed with the Minister in prescribed form an agreement whereby, for the purpose of this Division, they allocate an amount to one or more of them for a taxation year and the total of the amounts so allocated does not exceed $40,000, the basic exemption for the year of each of the trusts is the amount so allocated to it.

  • Marginal note:Failure to file agreement

    (3) Notwithstanding paragraph 127.53(1)(b), where more than one trust described in that paragraph arose as a consequence of contributions to the trusts by an individual and no agreement as contemplated by subsection 127.53(2) has been filed with the Minister before the expiration of 30 days after notice in writing has been forwarded by the Minister to any of the trusts that such an agreement is required for the purpose of an assessment of tax under this Part, the Minister may, for the purpose of this Division, allocate an amount to one or more of the trusts for a taxation year, the total of all of which amounts does not exceed $40,000, and the basic exemption for the year of each of the trusts is the amount so allocated to it.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1986, c. 55, s. 50.
Marginal note:Basic minimum tax credit determined

 An individual’s basic minimum tax credit for a taxation year is the total of all amounts each of which is

  • (a) an amount deducted under any of subsections 118(1), (2) and (10), sections 118.01 to 118.06, subsection 118.3(1), sections 118.5 to 118.7 and 119 and subsection 127(1) in computing the individual’s tax payable for the year under this Part; or

  • (b) the amount that was claimed under section 118.1 or 118.2 in computing the individual’s tax payable for the year under this Part, determined without reference to this Division, to the extent that the amount claimed does not exceed the maximum amount deductible under that section in computing the individual’s tax payable for the year under this Part, determined without reference to this Division.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 127.531;
  • 2006, c. 4, s. 76;
  • 2007, c. 2, s. 35;
  • 2009, c. 31, s. 14;
  • 2011, c. 24, s. 41.
Marginal note:Definitions
  •  (1) In this section,

    “foreign income”

    « impôts payés à l’étranger »

    “foreign income” of an individual for a taxation year means the total of

    • (a) the individual’s incomes for the year from businesses carried on by the individual in countries other than Canada, and

    • (b) the individual’s incomes for the year from sources in countries other than Canada in respect of which the individual has paid non-business-income taxes, within the meaning assigned by subsection 126(7), to governments of countries other than Canada;

    “foreign taxes”

    « revenu de source étrangère »

    “foreign taxes” of an individual for a taxation year means the total of the business-income taxes, within the meaning assigned by subsection 126(7), paid by the individual for the year in respect of businesses carried on by the individual in countries other than Canada and 2/3 of the non-business-income taxes, within the meaning assigned by that subsection, paid by the individual for the year to the governments of countries other than Canada.

  • Marginal note:Foreign tax credit

    (2) For the purposes of section 127.5, an individual’s special foreign tax credit for a taxation year is the greater of

    • (a) the total of all amounts deductible under section 126 from the individual’s tax for the year, and

    • (b) the lesser of

      • (i) the individual’s foreign taxes for the year, and

      • (ii) the amount determined by the formula

        A × B

        where

        A 
        is the appropriate percentage for the taxation year, and
        B 
        is the individual’s foreign income for the year.
  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 127.54;
  • 2001, c. 17, s. 120;
  • 2006, c. 4, s. 77.