any balance owing is due on or before April 30. Outstanding balances remittedafter April 30 may be subject to interest charges; regardless of whether thetaxpayer's filing due date is April 30 or June 15.The amount of income tax that an individual must pay is based on the amount of their taxable income (income earned less allowed expenses) for the tax year.Personal income tax may be collected through various means:1.
Deduction at source - where income tax is deducted directly from anindividual's pay and sent to the CRA.2.
Instalment payments - where an individual must pay his or her estimatedtaxes during the year instead of waiting to settle up at the end of the year.3.
payment on filing - payments made with the income tax return4.
arrears payments - payments made after the return is filedEmployers may also deduct Canada Pension Plan/Quebec Pension Plan(CPP/QPP) contributions, Employment Insurance (EI) and Provincial ParentalInsurance (PPIP) premiums from their employees' gross pay. Employers thensend these deductions to the taxing authority.Individuals who have overpaid taxes or had excess tax deducted at source willreceive a refund from the CRA upon filing their annual tax return.Generally, personal income tax returns for a particular year must be filed withCRA on or before April 30 of the following year.
An individual taxpayer must report his or her total income for the year. Certaindeductions are allowed in determining net income, such as deductions for contributions to Registered Retirement Savings Plans, union and professionaldues, child care expenses, and business investment losses. Net income is usedfor determining several income-tested social benefits provided by the federaland provincial/territorial governments. Further deductions are allowed indetermining taxable income, such as capital losses, half of capital gainsincluded in income, and a special deduction for residents of northern Canada.Deductions permit certain amounts to be excluded from taxation altogether.Tax payable before credits is determined using four tax brackets and tax rates. Non-refundable tax credits are then deducted from tax payable before credits for various items such as a basic personal amount, dependents, Canada/QuebecPension Plan contributions, Employment Insurance premiums, disabilities,tuition and education and medical expenses. These credits are calculated bymultiplying the credit amount (e.g., the basic personal amount of $10,100 in2009) by the lowest tax rate. This mechanism is designed to provide equal benefit to taxpayers regardless of the rate at which they pay tax.A non-refundable tax credit for charitable donations is calculated at the lowesttax rate for the first $200 in a year, and at the highest tax rate for the portion inexcess of $200. This tax credit is designed to encourage more generouscharitable giving.