Hello good people,
I have been confused regarding these term time and again. Is there anyone who could clarify these? I would really appreciate if you could help me with the calculation steps as well.
**Net Income
**Adjusted Income
**Net Adjusted Income
Thank you.
ACCA Forums
TXConfused with some terms
Hi Imubin51,
The two terms Net income and Net adjusted Income (ANI) are two terms related to the ordinary income tax calculation. The term Adjusted income belongs according to my current knowledge to the calculation of pensions and you would use it for the determination of the annual allowances. (Please someone correct me if I am wrong right now)
Certainly for those two terms you would calculate the outcome in this way:
All your income sources like
Non savings income + Savings income + Dividend income = Total Profit - Trading Loss = Net income
Net adjusted income is something you would determine in order to figure out if the person will be eligible for a Personal allowance and if so how much!
Net Income - Personal pension contributions (Gross) - Gift aid contributions (Gross) = Net adjusted Income
For a self employed person Adjusted income is usually simply Net income!
Otherwise it would be Net income - (or + I am right now not 100% sure) Pension contributions.
Hope this helps.
Got it. Thank you so much.
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