Definition ∞ The Income Tax Act refers to the principal legislation governing income taxation within a specific jurisdiction. This legal framework defines taxable income, allowable deductions, and tax rates for individuals and corporations. It provides the statutory basis for assessing and collecting income taxes. Compliance with its provisions is mandatory for all taxpayers.
Context ∞ The Income Tax Act in many jurisdictions is being re-evaluated to address the tax implications of digital assets and cryptocurrency transactions. Key debates surround the classification of cryptocurrencies for tax purposes, such as whether they are property, currency, or securities. Future developments will likely include amendments to the Act or the issuance of specific regulations to clarify the taxation of digital asset activities.
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