Plain meaning
The main federal statute governing income tax in Canada.
Also called
ITA
Key points
- Income Tax Act is used to classify or measure income for tax reporting and benefit calculations.
- The amount may be calculated differently depending on whether the issue is taxable income, net income, total income, or a specific income source.
- CRA and benefit programs often use income figures from the assessed tax return rather than informal estimates.
- A change to the reported amount can affect tax payable, instalments, credits, benefit payments, and later reassessments.
Why it comes up
Most federal rules for personal income tax, corporate income tax, trusts, deductions, credits, and anti-avoidance are found in or linked to the Income Tax Act.