Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (49 of 2026)

Schedule 4   Standard deduction for work-related expenses

Part 1   Amendment of the Income Tax Assessment Act 1997

Income Tax Assessment Act 1997

7   After section 40-291

Insert:

40-291A Fixed reduction for certain assets used to produce assessable labour income

(1) Instead of a reduction under section 40-290 or 40-291, you may reduce, by a fixed amount, the amount (the balancing adjustment amount ) included in your assessable income, or the amount you can deduct, under section 40-285 for a *depreciating asset if:

(a) the depreciating asset has been used at any time for the purpose of gaining or producing your *assessable labour income; and

(b) you have deducted an amount under section 25-130 for an income year (whether the income year in which the *balancing adjustment event that gave rise to the balancing adjustment amount occurred or another income year); and

(c) the *effective life of the depreciating asset overlaps, wholly or partly, with that income year.

(2) The amount of the reduction is 50% of the balancing adjustment amount.