Income Tax Assessment Act 1997
Work out your taxable income for the income year like this:
| Taxable income = Assessable income − Deductions |
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 .
Hide history note
View history noteS 4-15(1) amended by No 88 of 2013, s 3 and Sch 6 item 3, by substituting " utilise in that or " for " deduct in " in the note, effective 29 June 2013.
4-15(2)
There are cases where taxable income is worked out in a special way:
| Item | For this case … | See: |
| 1. | A company does not maintain continuity of ownership and control during the income year and does not satisfy the business continuity test | Subdivision 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 | (Repealed by No 80 of 2007 ) | |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 year | Part 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 amount | section 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 Australia | sections 142 and 143 of the Income Tax Assessment Act 1936 |
| 5. | The Commissioner makes a default or special assessment of taxable income | sections 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 cases | section 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 .
S 4-15(2) amended by No 7 of 2019, s 3 and Sch 1 item 33, by substituting " business continuity test " for " same business test " in table item 1, effective 1 April 2019 and applicable in relation to income years starting on or after 1 July 2015.
S 4-15(2) amended by No 70 of 2015, s 3 and Sch 1 item 189, by substituting " superannuation " for " superannuation/FHSA " in the note, effective 1 July 2015.
S 4-15(2) amended by No 45 of 2008, s 3 and Sch 6 item 2, by substituting " complying superannuation/FHSA class " for " complying superannuation class " in the note, effective 26 June 2008.
S 4-15(2) amended by No 143 of 2007 , s 3 and Sch 1 item 128, by inserting item 6 at the end of the table, applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under Div 770 heading .
S 4-15(2) amended by No 80 of 2007 , s 3 and Sch 3 item 109, by repealing table item 1A, applicable in relation to the 2007-08 income year and later income years. Item 1A formerly read:
1A. ... An entity becomes an *STS taxpayer for an income year ... Division 328
S 4-15(2) amended by No 147 of 2005, No 41 of 2005, No 68 of 2002 and No 78 of 2001.
S 4-15 amended by No 83 of 2004.
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