INCOME TAX EXEMPTIONS

New Zealand Times, Volume XXXVIII, Issue 8738, 21 May 1914, Page 5

INCOME TAX EXEMPTIONS

DEPARTMENTAL EXPLANATION OF THE POSITION. There has, apparently, been a great sToal of misunderstanding regarding Iho effect of tho Land and Income J'ax Act, which was passed during last cession of Parliament. This amending Act provided for an increase in tho exemption of income by a concession in regard to children under the iigo of sixteen years. To a “Times’' representative yesterday, tho DeputyCommissioner of Taxes (Mr D. G. Clark) gave an explanation of tho Act and its operations. Mr Clark first pointed out that there was a qualifying clause in the amending Act, providing that tho section authorising deductions in regard to children “shall not apply to the assessment of income tax for the year commencing April Ist, 1913.” In the forms for income returns which have lately been issued, taxpayers are asked to furnish claims for deductions on account of children. The deputy, commissioner explained that the exemption will bo allowed in the assessment of taxes for the current year, 191-1-15, which is based on the income derived during tho past financial yeai ended March 31st last. Tho concession is restricted to chil. dren under sixteen years of age, and no taxpayer can secure tho exemption for more than fxvo children. No distinction was made in tho Act regarding children born during the financial year in which tho income is earned. Replying to a question on this point, Mr Clark stated that a deduction will bo allowed for a. child born at any time during the financial year, oven if tho child wore born on March 31st of tho year in which the income is earned. No deduction is allowable, however, in the case of a child born subsequent to March 31st, but prior to the date by which the returns have to be made, any claim in this circumstance being ineffective until the next assessment. The exemption is £25 for each child up to five children, sc that tho parents of a family of five children whose income does’ not exceed £125 will be exempt from taxatie a.