1.Introduction

Taxation is an important part of the country economics. Different country has its own items of taxation. This essay will mainly discuss about the Australian taxation. Australian has many forms of taxation. Both Individuals and companies in Australia are required by the government to pay taxes to all levels of government including: local, state, and federal governments. Income taxes are the most significant form of taxation in Australia. The purpose of taxes is to provide for public services and redistribution of economic wealth. There are two parts in this essay: the first one is the individual income tax and the taxation deduction. According to analysis these the problems and resolutions in these two parts, people can learn about the individual income tax and the taxation deduction of Australia. The essay will mention two acts: the Income Tax Assessment Acts,  1936, 1997 (as amended) [ITAA36 or ITAA97]

2.Main body

2.1. Part 1

(a) Income by ordinary concepts

1) There are several views of ordinary income. 

• Economic view is widely used in financial analysis. Here income is a gain, which is a change in wealth plus consumption. In this view, unrealized gain is also included. 
• Another view is accounting view where income equals revenue minus expense. But here the income equals is the same as profit from which deductions are subtracted. 
• What we will use in taxing is “income by ordinary 

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