If I receive a return to work payment of $20,000 and it is classified under statory income. What difference would it make if this was classified under ordinary income?
If I receive a return to work payment of $20,000 and it is classified under statory income. What difference would it make if this was classified under ordinary income?
Ordinary income: it is the income which ordinarily acquired. For a person it can be wages and for business it will be income that is acquired from day to day activity. for example for business , profit earned is ordinary income.
Statutory Income: it is the income which is not taxable at ordinary rates. Instead it is taxable at specific rate. Further it is the income which is inserted by specific rule in income tax act. Statutory income is includible in assessable income and liable to tax. For example : Capital Gain tax, Lumpsum payment on termination etc is statutory income.
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