The Income Tax Act does not define:

• A. Taxable income, gross pensionable/taxable income and net taxable income
• B. Tax payable
• C. Deductions for pension contributions
• D. Net pay

Answer: (A)

The key idea here is that not every common payroll term has a statutory dictionary definition in the Income Tax Act. Taxable income, gross pensionable/taxable income, and net taxable income are not given formal definitions in the Act. Instead, they are concepts built from the Act’s rules: you start with total income and apply the allowable deductions and exemptions to arrive at taxable income, and the accompanying notions like gross pensionable or net taxable income are practical, calculation-based terms used in payroll contexts rather than fixed statutory definitions. In contrast, other concepts involved in calculating tax and pension-related deductions, such as tax payable and how pension contributions are treated under the Act, have statutory treatment and definitions. Therefore, the statement that the Income Tax Act does not define those three terms is the best choice.