Year of Assessment
'Year of Assessment' (YA) refers to the year in which income tax is calculated and charged. Each YA begins on 1 January and ends on 31 December.
Example, YA 2015 refers to the tax period 1 Jan 2015 to 31 Dec 2015.
'Basis period' refers to the period of income relevant to the YA. The basis year for a YA is the year preceding that YA.
Example, The basis period for YA 2015 is 1 January 2014 to 31 December 2014.
If you receive business income, the basis period may be different if your accounts are made up to a date other than 31 December.
Mr Tan has employment income from 1 January to 31 December 2014. This income is earned in the basis period from 1 January to 31 December 2014 and hence, it will be assessed in the Year of Assessment 2015.
Mr Lee is a sole-proprietor. The financial year for his business ends on 31 Mar 2014. His business income is earned in the basis period from 1 Apr 2013 to 31 Mar 2014 and hence, it will be assessed in the Year of Assessment 2015.
Notice of Assessment (NOA)
'Notice of Assessment' refers to your tax bill. It shows the types of income and amount of income subject to tax, calculates the tax amount you need to pay and shows the deductions given, as well as the credit balance to be refunded to you.
Find out more about how to read your tax bill.
'Assessable income' is your total income after deducting allowable expenses and approved donations. Total income includes:
a) trade income ;
b) employment income and; or
c) other income such as rental income.
Example, 'Employment' income shown is the net amount after deducting your employment expenses. 'Property' income shown is the net rental income after deducting your rental expenses.
'Personal reliefs' are the deductions which help you to save tax. Find out more about reliefs.
'Chargeable income' is your 'assessable income' after deducting 'personal reliefs'.
A typical tax computation looks like this: