Annotated Income Tax Act

• s. 2Tax payable by persons resident in Canada

Basic Rules

• s. 3Income for taxation year
• s. 4Income or loss from a source or from sources in a place

SUBDIVISION A — Income or Loss from an Office or Employment

• s. 5Income from office or employment
• s. 6Amounts to be included as income from office or employment
• s. 7Agreement to issue securities to employees
• s. 8Deductions allowed

SUBDIVISION B — Income or Loss from a Business or Property

• s. 9Income
• s. 10Valuation of inventory
• s. 10.1Mark-to-market election
• s. 11Proprietor of business
• s. 12Income inclusions
• s. 12.1Cash bonus on Canada Savings Bonds
• s. 12.2Amount to be included
• s. 12.3Inclusions
• s. 12.4Bad debt inclusion
• s. 12.5Definitions
• s. 12.6Definitions
• s. 12.7Hybrid mismatch arrangements — definitions
• s. 13Recaptured depreciation
• s. 14Inclusions
• s. 15Benefit conferred on shareholder
• s. 15.1Inclusions
• s. 15.2Inclusions
• s. 16Income and capital combined
• s. 16.1Leasing properties
• s. 17Amount owing by non-resident
• s. 17.1Deemed interest income — sections 15 and 212.3
• s. 18General limitations
• s. 18.1Definitions
• s. 18.2Definitions
• s. 18.21Group ratio — definitions
• s. 18.3Definitions
• s. 18.4Hybrid mismatch arrangements — definitions
• s. 19Limitation re advertising expense — newspapers
• s. 19.01Definitions
• s. 19.1Limitation re advertising expense on broadcasting undertaking
• s. 20Deductions permitted in computing income from business or property
• s. 20.01PHSP premiums
• s. 20.1Borrowed money used to earn income from property
• s. 20.2Interest — authorized foreign bank — interpretation
• s. 20.3Weak currency debt — interpretation
• s. 20.4Definitions
• s. 21Cost of borrowed money
• s. 22Sale of accounts receivable
• s. 23Sale of inventory
• s. 24Ceasing to carry on business
• s. 24.1Ceasing to carry on business
• s. 25Fiscal period of business disposed of by individual
• s. 26Banks — inclusions in income
• s. 27Application of Part I to Crown corporation
• s. 27.1Emissions allowances
• s. 28Farming or fishing business
• s. 29Disposition of animal of basic herd class
• s. 30Improving land for farming
• s. 31Restricted farm loss
• s. 32Insurance agents and brokers
• s. 32.1Employee benefit plan deductions
• s. 33.1Special Cases
• s. 34Special Cases
• s. 34.1Additional Business Income
• s. 34.2Definitions
• s. 34.3Definitions
• s. 35Prospectors and grubstakers
• s. 36Special Cases
• s. 37Scientific research and experimental development
• s. 37.1Special Cases
• s. 37.2Special Cases
• s. 37.3Special Cases

SUBDIVISION C — Taxable Capital Gains and Allowable Capital Losses

• s. 38Taxable capital gain and allowable capital loss
• s. 38.1Tax-deferred transaction — flow-through shares
• s. 38.2Allocation of gain re certain gifts
• s. 39Meaning of capital gain and capital loss
• s. 39.1Definitions
• s. 40General rules
• s. 41Taxable net gain from disposition of listed personal property
• s. 42Dispositions subject to warranty
• s. 43General rule for part dispositions
• s. 43.1Life estates in real property
• s. 44Exchanges of property
• s. 44.1Definitions
• s. 45Property with more than one use
• s. 46Personal-use property
• s. 47Identical properties
• s. 47.1Indexed Security Investment Plans
• s. 48Indexed Security Investment Plans
• s. 48.1Gain when small business corporation becomes public
• s. 49Granting of options
• s. 49.1No disposition where obligation satisfied
• s. 50Debts established to be bad debts and shares of bankrupt corporation
• s. 51Convertible property
• s. 51.1Conversion of debt obligation
• s. 52Cost of certain property the value of which included in income
• s. 53Adjustments to cost base
• s. 54Definitions
• s. 54.1Exception to principal residence rules
• s. 54.2Certain shares deemed to be capital property
• s. 55Definitions

SUBDIVISION D — Other Sources of Income

• s. 56Amounts to be included in income for year
• s. 56.1Support
• s. 56.2Reserve claimed for debt forgiveness
• s. 56.3Reserve claimed for debt forgiveness
• s. 56.4Definitions
• s. 57Certain superannuation or pension benefits
• s. 58Government annuities and like annuities
• s. 59Consideration for foreign resource property
• s. 59.1Involuntary disposition of resource property

SUBDIVISION E — Deductions in Computing Income

• s. 60Other deductions
• s. 60.001—
• s. 60.01Eligible amount
• s. 60.011Meaning of
• s. 60.02Definitions
• s. 60.021Additions to clause 60(l)(v)(B.2) for 2008
• s. 60.022Additions to clause 60(l)(v)(B.2) for 2015
• s. 60.03Definitions
• s. 60.1Support
• s. 60.11—
• s. 60.2Refund of undeducted past service AVCs
• s. 61Payment made as consideration for income-averaging annuity
• s. 61.1Where income-averaging annuity contract ceases to be such
• s. 61.2Reserve for debt forgiveness for resident individuals
• s. 61.3Deduction for insolvency with respect to resident corporations
• s. 61.4Reserve for debt forgiveness for corporations and others
• s. 62Moving expenses
• s. 63Child care expenses
• s. 64Disability supports deduction
• s. 64.01COVID-19 – disability supports deduction
• s. 64.1Individuals absent from Canada
• s. 65Allowance for oil or gas well, mine or timber limit
• s. 66Exploration and development expenses of principal-business corporations
• s. 66.1Amount to be included in income
• s. 66.2Amount to be included in income
• s. 66.21Definitions
• s. 66.3Exploration and development shares
• s. 66.4Recovery of costs
• s. 66.5Deduction from income
• s. 66.6Acquisition from tax-exempt
• s. 66.7Successor of Canadian exploration and development expenses
• s. 66.8Resource expenses of limited partner

SUBDIVISION F — Rules Relating to Computation of Income

• s. 67General limitation re expenses
• s. 67.1Expenses for food, etc.
• s. 67.2Interest on money borrowed for certain vehicles
• s. 67.3Limitation re cost of leasing passenger vehicle
• s. 67.4More than one owner or lessee
• s. 67.41More than one owner
• s. 67.5Non-deductibility of illegal payments
• s. 67.6Non-deductibility of fines and penalties
• s. 67.7Definitions
• s. 68Allocation of amounts in consideration for property, services or restrictive covenants
• s. 69Inadequate considerations
• s. 70Death of a taxpayer
• s. 72Reserves, etc., for year of death
• s. 73Inter vivos transfers by individuals
• s. 74.1Transfers and loans to spouse or common-law partner
• s. 74.2Gain or loss deemed that of lender or transferor
• s. 74.3Transfers or loans to a trust
• s. 74.4Definitions
• s. 74.5Transfers for fair market consideration
• s. 75Trusts
• s. 75.1Gain or loss deemed that of transferor
• s. 75.2Rules applicable with respect to “qualifying trust annuity”
• s. 76Security in satisfaction of income debt
• s. 76.1Non-resident moving debt from Canadian business
• s. 77—
• s. 78Unpaid amounts
• s. 79Definitions
• s. 79.1Definitions
• s. 80Definitions
• s. 80.01Definitions
• s. 80.02Definitions
• s. 80.03Definitions
• s. 80.04Definitions
• s. 80.1Expropriation assets acquired as compensation for, or as consideration for sale of, foreign property taken by or sold to foreign issuer
• s. 80.2Application
• s. 80.3Definitions
• s. 80.4Loans
• s. 80.5Deemed interest
• s. 80.6Synthetic disposition

SUBDIVISION G — Amounts Not Included in Computing Income

• s. 81Amounts not included in income

SUBDIVISION H — Corporations Resident in Canada and their Shareholders

• s. 82Taxable dividends received
• s. 83Qualifying dividends
• s. 84Deemed dividend
• s. 84.1Non-arm’s length sale of shares
• s. 84.2Computation of paid-up capital in respect of particular class of shares
• s. 85Transfer of property to corporation by shareholders
• s. 85.1Share for share exchange
• s. 86Exchange of shares by a shareholder in course of reorganization of capital
• s. 86.1Eligible distribution not included in income
• s. 87Amalgamations
• s. 88Winding-up
• s. 88.1Application
• s. 89Definitions

SUBDIVISION I — Shareholders of Corporations Not Resident in Canada

• s. 90Dividend from non-resident corporation
• s. 91Amounts to be included in respect of share of foreign affiliate
• s. 92Adjusted cost base of share of foreign affiliate
• s. 93Election re disposition of share of foreign affiliate
• s. 93.1Shares held by partnership
• s. 93.2Definitions
• s. 93.3Definition of
• s. 93.4Definitions
• s. 94Definitions
• s. 94.1Offshore investment fund property
• s. 94.2Investments in non-resident commercial trusts
• s. 95Definitions for this Subdivision

SUBDIVISION J — Partnerships and their Members

• s. 96General Rules
• s. 97Contribution of property to partnership
• s. 98Disposition of partnership property
• s. 98.1Residual interest in partnership
• s. 98.2Transfer of interest on death
• s. 99Fiscal period of terminated partnership
• s. 100Disposition of interest in partnership
• s. 101Disposition of farmland by partnership
• s. 102Definition of
• s. 103Agreement to share income, etc., so as to reduce or postpone tax otherwise payable

SUBDIVISION K — Trusts and their Beneficiaries

• s. 104Reference to trust or estate
• s. 105Benefits under trust
• s. 106Income interest in trust
• s. 107Disposition by taxpayer of capital interest
• s. 107.1Distribution by certain employment-related trusts
• s. 107.2Distribution by a retirement compensation arrangement
• s. 107.3Treatment of beneficiaries under qualifying environmental trusts
• s. 107.4Qualifying disposition
• s. 108Definitions

• s. 110Definitions
• s. 110.1Deduction for gifts

Lump-sum Payments

• s. 110.2Definitions
• s. 110.4—
• s. 110.5Additions for foreign tax deductions
• s. 110.6Definitions
• s. 110.61Capital gains deduction for qualifying business transfer – conditions
• s. 110.62Deduction for qualifying cooperative conversion — conditions
• s. 110.7Residing in prescribed zone
• s. 111Losses deductible
• s. 111.1Order of applying provisions
• s. 112Deduction of taxable dividends received by corporation resident in Canada
• s. 113Deduction in respect of dividend received from foreign affiliate
• s. 114Individual resident in Canada for only part of year
• s. 114.1—
• s. 114.2Deductions in separate returns

• s. 115Non-resident’s taxable income in Canada
• s. 115.1Competent authority agreements

Non-Residents with Canadian Investment Service Providers

• s. 115.2Definitions
• s. 116Disposition by non-resident person of certain property

SUBDIVISION A — Rules Applicable to Individuals

• s. 117Tax payable under this Part
• s. 117.1Annual adjustment
• s. 118Personal credits
• s. 118.01Definitions
• s. 118.02Definitions
• s. 118.03Annual Adjustment of Deductions and Other Amounts
• s. 118.031Annual Adjustment of Deductions and Other Amounts
• s. 118.04Definitions
• s. 118.041Definitions
• s. 118.05Definitions
• s. 118.06Definition of
• s. 118.07Definitions
• s. 118.1Definitions
• s. 118.2Medical expense credit
• s. 118.3Credit for mental or physical impairment
• s. 118.4Nature of impairment
• s. 118.5Tuition credit
• s. 118.6Definitions
• s. 118.61Unused tuition, textbook and education tax credits
• s. 118.62Credit for interest on student loan
• s. 118.7Credit for EI and QPIP premiums and CPP contributions
• s. 118.8Transfer of unused credits to spouse or common-law partner
• s. 118.81Tuition tax credit transferred
• s. 118.9Transfer to parent or grandparent
• s. 118.91Part-year residents
• s. 118.92Ordering of credits
• s. 118.93Credits in separate returns
• s. 118.94Tax payable by non-residents (credits restricted)
• s. 118.95Credits in year of bankruptcy
• s. 119Former resident — credit for tax paid
• s. 119.1Annual Adjustment of Deductions and Other Amounts
• s. 120Income not earned in a province
• s. 120.1Annual Adjustment of Deductions and Other Amounts
• s. 120.2Minimum tax carry-over
• s. 120.3CPP/QPP disability benefits for previous years
• s. 120.31Definitions
• s. 120.4Definitions
• s. 121Deduction for taxable dividends
• s. 122Tax payable by trust
• s. 122.1Definitions
• s. 122.2Tax on Split Income
• s. 122.3Overseas employment tax credit
• s. 122.5Definitions
• s. 122.51Definitions

SUBDIVISION A.1 — Canada Child Benefit

• s. 122.6Definitions
• s. 122.61Deemed overpayment
• s. 122.62Eligible individuals
• s. 122.63Agreement
• s. 122.64—

SUBDIVISION A.2 — Canada Workers Benefit

• s. 122.7Definitions
• s. 122.71Modification for purposes of provincial program
• s. 122.72Advance payment

SUBDIVISION A.3 — Climate Action Incentive

• s. 122.8Definitions

SUBDIVISION A.4 — School Supplies Tax Credit

• s. 122.9Definitions

SUBDIVISION A.5 — Canada Training Credit

• s. 122.91Claimed amount

SUBDIVISION A.6 — Multigenerational Home Renovation Tax Credit

• s. 122.92Definitions

SUBDIVISION A.7 — Personal Support Workers Tax Credit

• s. 122.93Definitions

SUBDIVISION B — Rules Applicable to Corporations

• s. 123Rate for corporations
• s. 123.1Corporation surtax
• s. 123.2—
• s. 123.3Refundable tax — CCPC or substantive CCPC
• s. 123.4Definitions
• s. 123.5Tax on personal services business income
• s. 123.6Definition
• s. 124Deduction from corporation tax
• s. 125Small business deduction
• s. 125.1Manufacturing and processing profits deductions
• s. 125.11Additional Tax on Banks and Life Insurers
• s. 125.2Definitions
• s. 125.21Part XIII tax  — eligible bank affiliate
• s. 125.3Deduction of Part I.3 tax
• s. 125.4Definitions
• s. 125.5Definitions
• s. 125.6Definitions
• s. 125.7Definitions

SUBDIVISION C — Rules Applicable to all Taxpayers

• s. 126Foreign tax deduction
• s. 126.1—
• s. 127Logging tax deduction
• s. 127.1Refundable investment tax credit
• s. 127.2Share-purchase tax credit
• s. 127.3Scientific research and experimental development tax credit
• s. 127.4Definitions
• s. 127.41Part XII.4 tax credit
• s. 127.42Definitions
• s. 127.421Definitions
• s. 127.43Definitions
• s. 127.44Definitions
• s. 127.45Definitions
• s. 127.46Definitions
• s. 127.47Definitions
• s. 127.48Definitions
• s. 127.49Definitions
• s. 127.491Definitions

• s. 127.5Obligation to pay minimum tax
• s. 127.51Minimum amount determined
• s. 127.52Adjusted taxable income determined
• s. 127.53—
• s. 127.531Basic minimum tax credit determined
• s. 127.54Definitions
• s. 127.55Application of s. 127.5

Bankruptcies

• s. 128Where corporation bankrupt

Changes in Residence

• s. 128.1Immigration
• s. 128.2Cross-border mergers
• s. 128.3Former resident — replaced shares

Private Corporations

• s. 129Dividend refund to private corporation

Investment Corporations

• s. 130Deduction from tax

Mortgage Investment Corporations

• s. 130.1Deduction from tax

Mutual Fund Corporations

• s. 131Election re capital gains dividend

Mutual Fund Trusts

• s. 132Capital gains refund to mutual fund trust
• s. 132.1Amounts designated by mutual fund trust
• s. 132.11Taxation year of mutual fund trust
• s. 132.2Definitions re qualifying exchange of mutual funds

Non-Resident-Owned Investment Corporations

• s. 133Computation of income
• s. 134Non-resident-owned corporation not a Canadian corporation, etc.
• s. 134.1NRO — transition
• s. 134.2Revocation

Patronage Dividends

• s. 135Deduction in computing income

Agricultural Cooperatives — Tax-deferred Patronage Dividends

• s. 135.1Definitions

Continuance of the Canadian Wheat Board

• s. 135.2Definitions

Cooperative Corporations

• s. 136Cooperative not private corporation

Credit Unions, Savings and Credit Unions and Deposit Insurance Corporations

• s. 137Payments pursuant to allocations in proportion to borrowing
• s. 137.1Amounts included in income of deposit insurance corporation
• s. 137.2Computation of income for 1975 and subsequent years

Insurance Corporations

• s. 138Insurance corporations
• s. 138.1Rules relating to segregated funds
• s. 138.2Qualifying transfer of funds
• s. 139Conversion of insurance corporations into mutual corporations

Demutualization of Insurance Corporations

• s. 139.1Definitions
• s. 139.2Mutual holding corporations
• s. 140Deductions in computing income
• s. 141Definitions
• s. 141.1Deemed not to be a private corporation
• s. 142—
• s. 142.1—

Financial Institutions

• s. 142.2Definitions
• s. 142.3Amounts to be included and deducted
• s. 142.4Definitions
• s. 142.5Income treatment for profits and losses
• s. 142.51Definitions
• s. 142.6Becoming or ceasing to be a financial institution
• s. 142.7Definitions
• s. 143Communal organizations
• s. 143.1Definitions

Cost of Tax Shelter Investments and Limited-recourse Debt in Respect of Gifting Arrangements

• s. 143.2Definitions

Expenditure — Limitations

• s. 143.3Definitions

Expenditure — Limit for Contingent Amount

• s. 143.4Definitions

Employees Profit Sharing Plans

• s. 144Definitions

Employee Life and Health Trust

• s. 144.1Definitions

Registered Supplementary Unemployment Benefit Plans

• s. 145Definitions

Registered Retirement Savings Plans

• s. 146Definitions

Home Buyers’ Plan

• s. 146.01Definitions

Lifelong Learning Plan

• s. 146.02Definitions

Registered Education Savings Plans

• s. 146.1Definitions

Tax-free Savings Accounts

• s. 146.2Definitions

Registered Retirement Income Funds

• s. 146.3Definitions

Registered Disability Savings Plan

• s. 146.4Definitions

Advanced Life Deferred Annuity

• s. 146.5Definitions

Tax-Free First Home Savings Account

• s. 146.6Definitions

Deferred Profit Sharing Plans

• s. 147Definitions

Registered Pension Plans

• s. 147.1Definitions
• s. 147.2Pension contributions deductible — employer contributions
• s. 147.3Transfer — money purchase to money purchase, RRSP or RRIF
• s. 147.4RPP annuity contract

Pooled Registered Pension Plans

• s. 147.5Definitions

Life Insurance Policies

• s. 148Amounts included in computing policyholder’s income

Eligible Funeral Arrangements

• s. 148.1Definitions

Miscellaneous Exemptions

• s. 149Miscellaneous exemptions
• s. 149.01—

Qualified Donees

• s. 149.1Definitions
• s. 149.2Material and insignificant interests

Returns

• s. 150Filing returns of income — general rule
• s. 150.1Definition of

Estimate of Tax

• s. 151Estimate of tax

Assessment

• s. 152Assessment

Payment of Tax

• s. 153Withholding
• s. 154Agreements providing for tax transfer payments
• s. 155Farmers and fishermen
• s. 156Other individuals
• s. 156.1Definitions
• s. 157Payment by corporation
• s. 157.1Instalment deferral for January, February and March 2002 - definitions
• s. 158Payment of remainder
• s. 159Person acting for another
• s. 160Tax liability re property transferred not at arm’s length · annotated
• s. 160.01Definitions
• s. 160.1Where excess refunded
• s. 160.2Joint and several liability in respect of amounts received out of or under RRSP
• s. 160.21Joint and several liability — registered disability savings plan
• s. 160.3Liability in respect of amounts received out of or under RCA trust
• s. 160.4Liability in respect of transfers by insolvent corporations

Electronic Payments

• s. 160.5Definitions

Interest

• s. 161General

Offset of Refund Interest and Arrears Interest

• s. 161.1Definitions
• s. 161.2Period where interest not payable

Small Amounts Owing

• s. 161.3Interest and penalty amounts of $25 or less
• s. 161.4Taxpayer

Penalties

• s. 162Failure to file return of income
• s. 163Repeated failure to report income
• s. 163.1Penalty for late or deficient instalments

Misrepresentation of a Tax Matter by a Third Party

• s. 163.2Definitions
• s. 163.3Definitions

Refunds

• s. 164Refunds
• s. 164.1—

Objections to Assessments

• s. 165Objections to assessment

General

• s. 166Irregularities
• s. 166.1Extension of time by Minister
• s. 166.2Extension of time by Tax Court
• s. 167Extension of time to appeal

Revocation of Registration of Certain Organizations and Associations

• s. 168Notice of intention to revoke registration
• s. 168.1Date of designation

• s. 169Appeal
• s. 170Notice to Deputy Minister
• s. 171Disposal of Appeal
• s. 172Appeal from refusal to register, revocation of registration, etc.
• s. 173References to Tax Court of Canada
• s. 174Common questions
• s. 175Institution of appeals
• s. 176—
• s. 179Hearings
• s. 179.1No reasonable grounds for appeal
• s. 180Appeals to Federal Court of Appeal

• s. 190.1Tax payable
• s. 190.11Taxable capital employed in Canada
• s. 190.12Taxable capital
• s. 190.13Capital
• s. 190.14Investment in related institutions
• s. 190.15Capital deduction
• s. 190.16—
• s. 190.17—

• s. 190.2Return
• s. 190.21Provisions applicable to Part
• s. 190.211Provisions applicable -- Crown corporations
• s. 190.22—
• s. 190.23—
• s. 190.24—

• s. 220Minister’s duty
• s. 221Regulations
• s. 221.01Providing information returns in electronic format
• s. 221.1Application of interest
• s. 221.2Re-appropriation of amounts

• s. 222Definitions
• s. 222.1Court costs
• s. 223Definition of
• s. 223.1Application of ss. 223(1) to (8) and (12)
• s. 224Garnishment
• s. 224.1Recovery by deduction or set-off
• s. 224.2Acquisition of debtor’s property
• s. 224.3Payment of moneys seized from tax debtor
• s. 225Seizure of goods, chattels or movable property
• s. 225.1Collection restrictions
• s. 225.2Definition of
• s. 226Taxpayer leaving Canada
• s. 227Withholding taxes
• s. 227.1Liability of directors for failure to deduct · annotated
• s. 228Applying payments under collection agreements
• s. 229.1Repeal of s. 229

• s. 230Records and books
• s. 230.1Records re monetary contributions -
• s. 231Definitions
• s. 231.1Information gathering
• s. 231.2Requirement to provide documents or information
• s. 231.3Search warrant
• s. 231.31Warrant under
• s. 231.32Things seized
• s. 231.4Inquiry
• s. 231.5Copies
• s. 231.6Definition of
• s. 231.7Compliance order
• s. 231.8Time period not to count
• s. 232Definitions
• s. 233Information return
• s. 233.1Definitions
• s. 233.2Definitions
• s. 233.3Definitions
• s. 233.4Reporting entity
• s. 233.5Due diligence exception
• s. 233.6Returns respecting distributions from non-resident trusts
• s. 233.7Exception for first-year residents
• s. 233.8Country-by-country report — definitions
• s. 234Ownership certificates
• s. 235Penalty for failing to file corporate returns
• s. 236Execution of documents by corporations
• s. 237Social Insurance Number
• s. 237.1Definitions
• s. 237.2Application of s. 237.1
• s. 237.3Definitions
• s. 237.4Definitions
• s. 237.5Definitions

• s. 238Offences and punishment
• s. 239Other offences and punishment
• s. 239.1Definitions
• s. 240Definition of
• s. 241Provision of information
• s. 242Officers, etc., of corporations
• s. 243Power to decrease punishment

• s. 244Information or complaint