Income Tax Act
Sections and provisions with full text and the judgments that cite each one.
Section 1 — Short Title
This Act may be cited as the Income Tax Act .
Section 2 — Tax payable by persons resident in Canada
An income tax shall be paid, as required by this Act, on the taxable income for each taxation year of every person resident in Canada at any time in the year. The taxable income of a taxpayer for a…
Section 3 — Income for taxation year
The income of a taxpayer for a taxation year for the purposes of this Part is the taxpayer’s income for the year determined by the following rules: determine the total of all amounts each of which is…
Section 4 — Income or loss from a source or from sources in a place
For the purposes of this Act, a taxpayer’s income or loss for a taxation year from an office, employment, business, property or other source, or from sources in a particular place, is the taxpayer’s…
Section 5 — Income from office or employment
Subject to this Part, a taxpayer’s income for a taxation year from an office or employment is the salary, wages and other remuneration, including gratuities, received by the taxpayer in the year. A…
Section 6 — Amounts to be included as income from office or employment
There shall be included in computing the income of a taxpayer for a taxation year as income from an office or employment such of the following amounts as are applicable the value of board, lodging…
Section 7 — Agreement to issue securities to employees
Subject to subsection (1.1), where a particular qualifying person has agreed to sell or issue securities of the particular qualifying person (or of a qualifying person with which the particular…
Section 8 — Deductions allowed
In computing a taxpayer’s income for a taxation year from an office or employment, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the…
Section 9 — Income
Subject to this Part, a taxpayer’s income for a taxation year from a business or property is the taxpayer’s profit from that business or property for the year. Subject to section 31, a taxpayer’s…
Section 10 — Valuation of inventory
For the purpose of computing a taxpayer’s income for a taxation year from a business that is not an adventure or concern in the nature of trade, property described in an inventory shall be valued at…
Section 10.1 — Mark-to-market election
Subsection (4) applies to a taxpayer in respect of a taxation year and subsequent taxation years if the taxpayer elects to have subsection (4) apply to the taxpayer and has filed that election in…
Section 11 — Proprietor of business
Subject to section 34.1, if an individual is a proprietor of a business, the individual’s income from the business for a taxation year is deemed to be the individual’s income from the business for…
Section 12 — Income inclusions
There shall be included in computing the income of a taxpayer for a taxation year as income from a business or property such of the following amounts as are applicable any amount received by the…
Section 12.1 — Cash bonus on Canada Savings Bonds
Notwithstanding any other provision of this Act, where in a taxation year a taxpayer receives an amount from the Government of Canada in respect of a Canada Savings Bond as a cash bonus that the…
Section 12.2 — Amount to be included
Where in a taxation year a taxpayer holds an interest, last acquired after 1989, in a life insurance policy that is not an exempt policy, a prescribed annuity contract, and a contract under which the…
Section 12.3
[Repealed, 2013, c. 34, s. 174]
Section 12.4 — Bad debt inclusion
Where, in a taxation year, a taxpayer disposes of a property that was a property described in an inventory of the taxpayer and in the year or a preceding taxation year an amount has been deducted…
Section 12.5 — Definitions
The definitions in this section apply for the purposes of this section and section 20.4. base year of an insurer means the insurer’s taxation year that immediately precedes its transition year. (…
Section 12.6 — Definitions
The definitions in section 18.3 apply in this section. Subsection (3) applies for a taxation year of an entity in respect of a security of the entity if the security becomes, at a particular time in…
Section 12.7 — Hybrid mismatch arrangements — definitions
The definitions in subsection 18.4(1) apply in this section. Subsection (3) applies in respect of a payment of which a taxpayer is a recipient if the payment arises under a hybrid mismatch…
Section 13 — Recaptured depreciation
If, at the end of a taxation year, the total of the amounts determined for E to K in the definition undepreciated capital cost in subsection (21) in respect of a taxpayer’s depreciable property of a…
Section 14
[Repealed, 2016, c. 12, s. 4]
Section 15 — Benefit conferred on shareholder
If, at any time, a benefit is conferred by a corporation on a shareholder of the corporation, on a member of a partnership that is a shareholder of the corporation or on a contemplated shareholder of…
Section 15.1
[Repealed, 2023, c. 26, s. 7]
Section 15.2
[Repealed, 2023, c. 26, s. 7]
Section 16 — Income and capital combined
Where, under a contract or other arrangement, an amount can reasonably be regarded as being in part interest or other amount of an income nature and in part an amount of a capital nature, the…
Section 16.1 — Leasing properties
Where a taxpayer (in this section referred to as the “lessee”) leases tangible property, or for civil law corporeal property, that is not prescribed property and that would, if the lessee acquired…
Section 17 — Amount owing by non-resident
If this subsection applies to a corporation resident in Canada in respect of an amount owing to the corporation (in this subsection referred to as the “debt”), the corporation shall include in…
Section 17.1 — Deemed interest income — sections 15 and 212.3
Subject to subsection (2), if — at any time in a taxation year of a corporation resident in Canada (in this section referred to as the “CRIC”) or in a fiscal period of a qualifying Canadian…
Section 18 — General limitations
In computing the income of a taxpayer from a business or property no deduction shall be made in respect of an outlay or expense except to the extent that it was made or incurred by the taxpayer for…
Section 18.1 — Definitions
The definitions in this subsection apply in this section. matchable expenditure of a taxpayer means the amount of an expenditure that is made by the taxpayer to acquire a right to receive production,…
Section 18.2 — Definitions
The following definitions apply in this section and section 18.21. absorbed capacity of a taxpayer for a taxation year means the lesser of the taxpayer’s cumulative unused excess capacity for the…
Section 18.21 — Group ratio — definitions
The following definitions apply in this section. acceptable accounting standards means International Financial Reporting Standards and the generally accepted accounting principles of Canada;…
Section 18.3 — Definitions
The following definitions apply in this section. entity has the same meaning as in subsection 122.1(1). ( entité ) equity value has the same meaning as in subsection 122.1(1). ( valeur des capitaux…
Section 18.4 — Hybrid mismatch arrangements — definitions
The following definitions apply in this section and paragraph 20(1)(yy). Canadian ordinary income , of a taxpayer for a taxation year in respect of a payment, means an amount that is if the taxpayer…
Section 19 — Limitation re advertising expense — newspapers
In computing income, no deduction shall be made in respect of an otherwise deductible outlay or expense of a taxpayer for advertising space in an issue of a newspaper for an advertisement directed…
Section 19.01 — Definitions
The definitions in this subsection apply in this section. advertisement directed at the Canadian market has the same meaning as the expression directed at the Canadian market in section 2 of the…
Section 19.1 — Limitation re advertising expense on broadcasting undertaking
Subject to subsection 19.1(2), in computing income, no deduction shall be made in respect of an otherwise deductible outlay or expense of a taxpayer made or incurred after September 21, 1976 for an…
Section 20 — Deductions permitted in computing income from business or property
Notwithstanding paragraphs 18(1)(a), 18(1)(b) and 18(1)(h), in computing a taxpayer’s income for a taxation year from a business or property, there may be deducted such of the following amounts as…
Section 20.01 — PHSP premiums
Notwithstanding paragraphs 18(1)(a) and (h) and subject to subsection (2), there may be deducted in computing an individual’s income for a taxation year from a business carried on by the individual…
Section 20.1 — Borrowed money used to earn income from property
Where at any time after 1993 borrowed money ceases to be used by a taxpayer for the purpose of earning income from a capital property (other than real or immovable property or depreciable property),…
Section 20.2 — Interest — authorized foreign bank — interpretation
The following definitions apply in this section. branch advance of an authorized foreign bank means an amount allocated or provided by, or on behalf of, the bank to, or for the benefit of, its…
Section 20.3 — Weak currency debt — interpretation
The definitions in this subsection apply in this section. exchange date in respect of a debt of a taxpayer that is at any time a weak currency debt means, if the debt is incurred or assumed by the…
Section 20.4 — Definitions
The definitions in section 12.5 apply for the purposes of this section. There shall be deducted in computing an insurer’s income for its transition year from an insurance business carried on by it in…
Section 21 — Cost of borrowed money
Where in a taxation year a taxpayer has acquired depreciable property, if the taxpayer elects under this subsection in the taxpayer’s return of income under this Part for the year, in computing the…
Section 22 — Sale of accounts receivable
Where a person who has been carrying on a business has, in a taxation year, sold all or substantially all the property used in carrying on the business, including the debts that have been or will be…
Section 23 — Sale of inventory
Where, on or after disposing of or ceasing to carry on a business or a part of a business, a taxpayer has sold all or any part of the property that was included in the inventory of the business, the…
Section 24
[Repealed, 2016, c. 12, s. 8] If, at any time, an individual ceases to carry on a business and the individual’s spouse or common-law partner, or a corporation controlled directly or indirectly in any…
Section 24.1
[Repealed, 1996, c. 21, s. 6(1)]
Section 25 — Fiscal period of business disposed of by individual
Where an individual was the proprietor of a business and disposed of it during a fiscal period of the business, the fiscal period may, if the individual so elects and subsection 249.1(4) does not…