The article explores how preferential taxation can benefit individuals economically and socially. It explains that taxpayers can reduce their taxable income through the Tax Social Benefit. Residents and non-residents have different objects of taxation based on their status. The total taxable income is the basis for taxation, impacting household resources and local budgets significantly. Following recommendations can improve the effectiveness of Individual Income Tax and income distribution. The tax social benefit is calculated based on the subsistence minimum for an able-bodied person.