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Explanatory Notes to the Legislative Proposals and Draft Regulations Relating to Income Tax

February 2004


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Table of Contents


Clause in Legislation

Section of the Income Tax Act

Topic


Preface.
Part I - General.
2 6

Employment Income

5 12

Income Inclusions

7 14

Eligible Capital Property

10 18

Prohibited Deductions

12 20

Deductions

18 44

Exchanges of Property

19 44.1

Capital Gains Deferral - Eligible Small Business Investments

20 53

Adjustments to Cost Base

24 56

Other Sources of Income

24.1 56.4

Restricted Covenants

25 60

Deductions in Computing Income

30.1 68

Allocation of Amounts in Consideration for Property, Services or Restrictive Covenants

31.1 70

Death of a Taxpayer

31.2 72

Election by Legal Representative and Transferee re Reserve

32 73

Inter Vivos Transfers by Individuals

32.1 82

Compensation Payments Deductible by Individuals

32.2 84

Deemed Dividend

33 85

Transfer of Property to Corporation by Shareholders

36 88

Winding-up of a Corporation

38.1 94

Application of Certain Provisions to Trusts Not Resident in Canada

42 104

Trusts and Their Beneficiaries

42.1 106

Proceeds of Disposition of Income Interest

43 107

Interests in Trusts

43.1 107.1

Distribution by Employee Trust, Employee Benefit Plan or Similar Trust

43.2 107.2

Distribution by a Retirement Compensation Arrangement

44 107.4

Qualifying Disposition

45 108

Taxation of Trusts and Their Beneficiaries

47 110.1

Charitable Donations Deduction

48 110.6

Lifetime Capital Gains Exemption

50.1 118

Personal Tax Credits

51 118.1

Charitable Donations Tax Credit

52 118.2

Medical Expense Tax Credit

59 120.4

Tax on Split Income

61 125

Small Business Deduction

62 125.1

Manufacturing and Processing Profits Deduction

62.1 125.11

Resource Income

63 125.4

Canadian Film or Video Production Tax Credit

64 126

Foreign Tax Credit

66 127

Deductions in Computing Tax

67 127.4

Labour-Sponsored Venture Capital Corporations

69.1 128.1

Returning Trust Beneficiary

70 129

Private Corporations - "refundable dividend tax on hand"

70.1 132

Definition "mutual fund trust"

72 132.2

Mutual Fund Qualifying Exchanges

73 134.1

Non-resident-owned Investment Corporations - Transition

77 138

Insurance Corporations

78 142.6

Mark-to-Market Rules

80.1 143.2

Limited Recourse Deb in Respect of a Gift or Monetary Contribution

83 146.1

Registered Education Savings Plans - Conditions for Registration

84 146.3

Registered Retirement Income Funds

87 149

Exemptions - Municipalities and Other Governmental Public Bodies

88 149.1

Charities

107.1 200

Distribution Deemed Disposition

108.1 204.9

Transfers Between Plans

109 Part XI

Tax in Respect of Certain Property Acquired by Trusts, etc.

110 Part XII.2

Definitions and Application

114 212

Taxation of Non-Residents

114.1 214

Deemed Payments

115.1 220

Security for Tax on Distributions of Taxable Canadian Property to Non-resident Beneficiaries

116.1 237.1

Tax Shelters

118 248

Interpretation

121 256

Acquisition of Control of a Corporation

123 260

Securities Lending Arrangements


Part II - Foreign Affiliates.
128 17

Amount Owing by Non-resident

129 42

Consideration for Warranties, Covenants or ther Obligations

130 88

Winding-up of a Corporation

131 92

Adjusted Cost Base of Share of Foreign Affiliate

132 93

Disposition of Shares of Foreign Affiliate

133 95

Foreign Affiliates

134 248

Definitions


Draft Regulations 

Appendix A.

Pensions and Qualified Limited Partnerships

Appendix B.

Insurers

Appendix C.

Foreign Affiliates

Appendix D.

Prescribed Properties and Permanent Establishments

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