As per Income Tax Act 1995, income tax shall be paid by every person on all income, other than exempt income, derived by him in the preceding year and shall be calculated on the chargeable income of the person at a specified rate. Preceding year means the financial year before the assessment year. For instance, in Mauritius, the fiscal year runs from 1 July to 30 June.
Every person is denoted as any individual or company, who generated incomes within Mauritius or by Mauritians overseas. A person who is resident will be taxed on the worldwide income derived by him, in other words, on his Mauritius and foreign source of income remitted to Mauritius.
Provided that, in the case of a non-resident person, he will be taxed only on his Mauritius-source income.
The computation of income tax can be laid by the following steps:
• Calculate the Gross income deriving from all resources, excluding exempt income.
• Subtract all allowable deductions and exemptions.
• Apply the tax rates on the chargeable income.
In Mauritius, if an individual’s annual net income does not exceed MUR 650,000, the tax rate will be 10%. On the other hand, a tax rate of 15% will be levied if his net income exceeds MUR 650,000.
Under the Income Tax Act 1995, the gross income is defined as the aggregate amount of all income which includes employment income, pensions, income from a trade, rent, interest and foreign dividends. Exempt income is any
Allowable deductions include any expenditure that is wholly, exclusively and necessarily incurred in the production of income and reliefs that are consolidated under the income exemption threshold (IET). In the new budget 2018/19, a retired person whose annual emoluments does not exceed Mur 50,000 will also be eligible to enhanced IET.
The IET is available for residents only.
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