Tax on carbon credit transfers treats carbon-credit receipts as separately taxable with a flat-rate levy and no deductions. Income from transfer of carbon credits is taxed under a two-part mechanism: tax on the carbon-credit income at a flat rate and the tax on the remaining total income after excluding that carbon-credit income. No deduction for any expenditure or allowance is permitted in computing the taxable amount of income from transfer of carbon credits. 'Carbon credit' for one unit is defined as a UNFCCC-validated reduction of one tonne of carbon dioxide or equivalent gases tradeable at prevailing market price.