Sources of Income Employment Office Net Income from trade/profession Total Net Income Less: Allowable Travelling Expenses Personal allowances Assessable Income Less: Allowable Deductions Chargeable Income Tax on Chargeable Income (Chargeable Income x Prevailing Tax Rate) Less: Tax Credits Double Taxation Relief Income Tax Liability Less prepavment: $ EA XXX Xxx Xxx Xxx Xxx Xxx XXX XXX Xxx Xxx XXX XXX
John was a civil servant with the Trinidad & Tobago (T&T) Government for over 30 years and retired 5 years ago. He is in receipt of a monthly pension. John also received a lump sum on retirement and invested part of this in a small retail business in downtown San Fernando. He retails designer clothing and perfumes and manages to make a modest profit, after deduction of business expenses. John invested the remainder of his pension lump sum in the Unit Trust Corporation of Trinidad and Tobago and is in receipt of monthly dividends. John receives a monthly pension of $6,000. The retail business has a financial year- end of 31 December and in the fiscal year 2011 he made a taxable profit of $100,000. In the fiscal year 2011 in T&T there is a personal allowance of $60,000 and the rate of Income tax is 25%. John no longer qualifies for any of the other deductions available to individuals and receives his pension after deduction of tax under the P.A.Y.E. system. In 2011, John received $5,000 in dividends from his Unit Trust Investment. Using the following format below, compute John Henry’s Income Tax liability for the fiscal year 2011.
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