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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1A.(Repealed by No 80 of 2007 ) 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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