What does the exemption amount mean?

The tax exemption amount is also called "tax exemption point". The tax law stipulates the amount of tax-exempt objects. Regardless of the amount of the object to be taxed, the exempted amount is not taxed, and only the rest is taxed. According to the provisions of individual income tax, if the income from investment, translation, patent right transfer, patent license, non-patented technology provision and transfer is less than 4,000 yuan each time, the expenses of 800 yuan will be reduced by more than 4,000 yuan, and the expenses will be reduced by 20%, and then the balance will be taxed at a rate of 20%. The amount of expenses deducted here is also the exemption amount.

The tax-free amount deducted from the taxable object amount. The purpose of stipulating the exemption amount is to take care of the minimum needs of taxpayers and make the tax burden more reasonable and fair. If there is a tax exemption amount, the tax exemption amount shall be deducted from the total taxable object of the taxpayer at the time of taxation, and then the taxable amount shall be calculated at the prescribed tax rate for the part exceeding the tax exemption amount.

The tax-free amount deducted from the taxable object amount. The purpose of stipulating the exemption amount is to take care of the minimum needs of taxpayers and make the tax burden more reasonable and fair. If there is a tax exemption amount, the tax exemption amount shall be deducted from the total taxable object of the taxpayer at the time of taxation, and then the taxable amount shall be calculated at the prescribed tax rate for the part exceeding the tax exemption amount.

legal ground

Article 2 of the Individual Income Tax Law imposes individual income tax on the following personal income:

(1) Income from wages and salaries;

(2) Income from remuneration for labor services;

(3) Income from remuneration;

(4) Income from royalties;

(5) Operating income;

(6) Income from interest, dividends and bonuses;

(7) Income from property lease;

(8) Income from property transfer;

(9) Accidental income.

Individual residents who obtain income from items 1 to 4 of the preceding paragraph (hereinafter referred to as comprehensive income) shall calculate individual income tax according to the tax year; Non-resident individuals who obtain income from items 1 to 4 of the preceding paragraph shall calculate individual income tax on a monthly or itemized basis. Taxpayers who obtain income from items 5 to 9 of the preceding paragraph shall calculate individual income tax separately in accordance with the provisions of this law.