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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 1 - INTRODUCTION AND CORE PROVISIONS  

PART 1-3 - CORE PROVISIONS  

Division 4 - How to work out the income tax payable on your taxable income  

SECTION 4-15  How to work out your taxable income  

4-15(1)  

 ITAA 36
Work out your taxable income for the income year like this:
Taxable income = Assessable income - Deductions

Method statement

Step 1. 

Add up all your assessable income for the income year.

To find out about your assessable income, see Division 6.


Step 2. 

Add up your deductions for the income year.

To find out what you can deduct, see Division 8.


Step 3. 

Subtract your deductions from your assessable income (unless they exceed it). The result is your taxable income. (If the deductions equal or exceed the assessable income, you don't have a taxable income.)

Note:

If the deductions exceed the assessable income, you may have a tax loss which you may be able to utilise in that or a later income year: see Division 36.

4-15(2)  

 View history reference ITAA 36
There are cases where taxable income is worked out in a special way:
ItemFor this case ...See:
1.A company does not maintain continuity of ownership and control during the income year and does not satisfy the same business testSubdivision 165-B
.......... 
1A.(Repealed by No 80 of 2007) 
.......... 
1B.An entity is a *member of a *consolidated group at any time in the income yearPart 3-90
.......... 
2.A company becomes a PDF (pooled development fund) during the income year, and the PDF component for the income year is a nil amountsection 124ZTA of the Income Tax Assessment Act 1936
.......... 
3.A shipowner or charterer:
· has its principal place of business outside Australia; and
section 129 of the Income Tax Assessment Act 1936
 · carries passengers, freight or mail shipped in Australia 
.......... 
4.An insurer who is a foreign resident enters into insurance contracts connected with Australiasections 142 and 143 of the Income Tax Assessment Act 1936
.......... 
5.The Commissioner makes a default or special assessment of taxable incomesections 167 and 168 of the Income Tax Assessment Act 1936
.......... 
6.The Commissioner makes a determination of the amount of taxable income to prevent double taxation in certain treaty casessection 24 of the International Tax Agreements Act 1953

Note:

A life insurance company can have a taxable income of the complying superannuation class and/or a taxable income of the ordinary class for the purposes of working out its income tax for an income year: see Subdivision 320-D.


 



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