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

Act current to 2017-12-11 and last amended on 2017-07-01. Previous Versions

Marginal note:Ordering of credits

 In computing an individual’s tax payable under this Part, the following provisions shall be applied in the following order: subsections 118(1) and (2), section 118.7, subsections 118(3) and (10) and sections 118.01, 118.02, 118.04, 118.041, 118.05, 118.06, 118.07, 118.3, 118.61, 118.5, 118.9, 118.8, 118.2, 118.1, 118.62 and 121.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 118.92;
  • 1998, c. 19, s. 31;
  • 1999, c. 22, s. 41;
  • 2006, c. 4, s. 68;
  • 2007, c. 2, s. 29;
  • 2009, c. 31, s. 10;
  • 2011, c. 24, s. 34;
  • 2014, c. 20, s. 15, c. 39, s. 36;
  • 2015, c. 36, ss. 9, 31;
  • 2016, c. 7, s. 22.
Marginal note:Credits in separate returns

 If a separate return of income with respect to a taxpayer is filed under subsection 70(2), 104(23) or 150(4) for a particular period and another return of income under this Part with respect to the taxpayer is filed for a period ending in the calendar year in which the particular period ends, for the purpose of computing the tax payable under this Part by the taxpayer in those returns, the total of all deductions claimed in all those returns under any of subsections 118(3) and (10) and sections 118.01 to 118.7 and 118.9 shall not exceed the total that could be deducted under those provisions for the year with respect to the taxpayer if no separate returns were filed under any of subsections 70(2), 104(23) and 150(4).

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 118.93;
  • 2006, c. 4, s. 68;
  • 2007, c. 2, s. 29.
Marginal note:Tax payable by non-residents (credits restricted)

 Sections 118 to 118.07 and 118.2, subsections 118.3(2) and (3) and sections 118.8 and 118.9 do not apply for the purpose of computing the tax payable under this Part for a taxation year by an individual who at no time in the year is resident in Canada unless all or substantially all the individual’s income for the year is included in computing the individual’s taxable income earned in Canada 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. 118.94;
  • 1994, c. 7, Sch. II, s. 96;
  • 2006, c. 4, s. 68;
  • 2007, c. 2, s. 29;
  • 2009, c. 31, s. 11;
  • 2011, c. 24, s. 35;
  • 2014, c. 20, s. 16;
  • 2016, c. 7, s. 23.
Marginal note:Credits in year of bankruptcy

 Notwithstanding sections 118 to 118.9, for the purpose of computing an individual’s tax payable under this Part for a taxation year that ends in a calendar year in which the individual becomes bankrupt, the individual shall be allowed only

  • (a) such of the deductions as the individual is entitled to under any of subsections 118(3) and (10) and sections 118.01 to 118.2, 118.5, 118.62 and 118.7, as can reasonably be considered wholly applicable to the taxation year, and

  • (b) such part of the deductions as the individual is entitled to under any of sections 118 (other than subsections 118(3) and (10)), 118.3, 118.8 and 118.9 as can reasonably be considered applicable to the taxation year,

except that the total of the amounts so deductible for all taxation years of the individual in the calendar year under any of those provisions shall not exceed the amount that would have been deductible under that provision in respect of the calendar year if the individual had not become bankrupt.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1998, c. 19, s. 136;
  • 1999, c. 22, s. 42;
  • 2006, c. 4, s. 69;
  • 2007, c. 2, s. 30;
  • 2009, c. 31, s. 12;
  • 2016, c. 7, s. 24.
Marginal note:Former resident — credit for tax paid

 If at any particular time an individual was deemed by subsection 128.1(4) to have disposed of a capital property that was a taxable Canadian property of the individual throughout the period that began at the particular time and that ends at the first time, after the particular time, at which the individual disposes of the property, there may be deducted in computing the individual’s tax payable under this Part for the taxation year that includes the particular time the lesser of

  • (a) that proportion of the individual’s tax for the year otherwise payable under this Part (within the meaning assigned by paragraph (a) of the definition tax for the year otherwise payable under this Part in subsection 126(7)) that

    • (i) the individual’s taxable capital gain from the disposition of the property at the particular time

    is of

    • (ii) the amount determined under paragraph 114(a) in respect of the individual for the year, and

  • (b) that proportion of the individual’s tax payable under Part XIII in respect of dividends received during the period by the individual in respect of the property and amounts deemed under Part XIII to have been paid during the period to the individual as dividends from corporations resident in Canada, to the extent that the amounts can reasonably be considered to relate to the property, that

    • (i) the amount by which the individual’s loss from the disposition of the property at the end of the period is reduced by subsection 40(3.7)

    is of

    • (ii) the total amount of those dividends.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 119;
  • 2001, c. 17, s. 102.

 [Repealed, 2016, c. 7, s. 25]

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2015, c. 36, s. 32;
  • 2016, c. 7, s. 25.
Marginal note:Income not earned in a province
  •  (1) There shall be added to the tax otherwise payable under this Part by an individual for a taxation year the amount that bears the same relation to 48% of the tax otherwise payable under this Part by the individual for the year that

    • (a) the individual’s income for the year, other than the individual’s income earned in the year in a province,

    bears to

    • (b) the individual’s income for the year.

  • Marginal note:Amount deemed paid in prescribed manner

    (2) Each individual is deemed to have paid, in prescribed manner and on prescribed dates, on account of the individual’s tax under this Part for a taxation year an amount that bears the same relation to 3% of the tax otherwise payable under this Part by the individual for the year that

    • (a) the individual’s income earned in the year in a province that, on January 1, 1973, was a province providing schooling allowances within the meaning of the Youth Allowances Act, chapter Y-1 of the Revised Statutes of Canada, 1970,

    bears to

    • (b) the individual’s income for the year.

  • (2.1) [Repealed, 2001, c. 17, s. 103]

  • Marginal note:Amount deemed paid

    (2.2) An individual is deemed to have paid on the last day of a taxation year, on account of the individual’s tax under this Part for the year, an amount equal to the individual’s income tax payable for the year to an Aboriginal government pursuant to a law of that government made in accordance with a tax sharing agreement between that government and the Government of Canada.

  • Definition of the individual’s income for the year

    (3) For the purpose of this section, the individual’s income for the year means

    • (a) if section 114 applies to the individual in respect of the year, the amount determined under paragraph 114(a) in respect of the individual for the year;

    • (b) if the individual was non-resident throughout the year, the individual’s taxable income earned in Canada for the year determined without reference to paragraphs 115(1)(d) to (f);

    • (c) in the case of an individual who is a specified individual in relation to the year, the individual’s income for the year computed without reference to paragraph 20(1)(ww); and

    • (d) in the case of a SIFT trust, the amount, if any, by which its income for the year determined without reference to this paragraph exceeds its taxable SIFT trust distributions (as defined in subsection 122(3)) for the year.

  • Marginal note:Definitions

    (4) In this section,

    income earned in the year in a province

    income earned in the year in a province means amounts determined under rules prescribed for the purpose of regulations made on the recommendation of the Minister of Finance; (revenu gagné au cours de l’année dans une province)

    tax otherwise payable under this Part

    tax otherwise payable under this Part by an individual for a taxation year means the total of

    • (a) the greater of

      • (i) the individual”s minimum amount for the year determined under section 127.51, and

      • (ii) the amount that, but for this section, would be the individual’s tax payable under this Part for the year if this Part were read without reference to

        • (A) subsection 117(2.1), section 119, subsection 120.4(2) and sections 126, 127, 127.4 and 127.41, and

        • (B) where the individual is a specified individual in relation to the year, section 121 in its application to dividends included in computing the individual’s split income for the year, and

    • (b) where the individual is a specified individual in relation to the year, the amount, if any, by which

      • (i) the highest individual percentage for the year multiplied by the individual’s split income for the year

      exceeds

      • (ii) the total of all amounts each of which is an amount that may be deducted under section 121 and that can reasonably be considered to be in respect of a dividend included in computing the individual’s split income for the year. (impôt qu’il est par ailleurs tenu de payer en vertu de la présente partie ou impôt payable par ailleurs en vertu de la présente partie)

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 120;
  • 1999, c. 22, s. 43;
  • 2000, c. 19, s. 27;
  • 2001, c. 17, s. 103;
  • 2007, c. 29, s. 11, c. 35, s. 40;
  • 2016, c. 11, s. 3.
 
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