Income Tax Assessment Act 1997
You must pay income tax for each *financial year.
View history note
Hide history note4-10(2)
Your income tax is worked out by reference to your taxable income for the income year . The income year is the same as the *financial year, except in these cases:
(a) for a company, the income year is the previous financial year;
(b) if you have an accounting period that is not the same as the financial year, each such accounting period or, for a company, each previous accounting period is an income year.
Note 1:
The Commissioner can allow you to adopt an accounting period ending on a day other than 30 June. See section 18 of the Income Tax Assessment Act 1936 .
Note 2:
An accounting period ends, and a new accounting period starts, when a partnership becomes, or ceases to be, a VCLP, an ESVCLP, an AFOF or a VCMP. See section 18A of the Income Tax Assessment Act 1936 .
4-10(3)
Work out your income tax for the *financial year as follows:
| Income tax = (Taxable income × Rate) − Tax offsets |
Step 2.
Work out your basic income tax liability on your taxable income using:
See the Income Tax Rates Act 1986 and section 4-25 .
Step 3.
Work out your tax offsets for the income year. A tax offset reduces the amount of income tax you have to pay.
For the list of tax offsets, see section 13-1 .
Step 4.
Subtract your *tax offsets from your basic income tax liability. The result is how much income tax you owe for the *financial year.
Note 1:
Division 63 explains what happens if your tax offsets exceed your basic income tax liability. How the excess is treated depends on the type of tax offset.
Note 2:
Section 4-11 of the Income Tax (Transitional Provisions) Act 1997 (which is about the temporary budget repair levy) may increase the amount of income tax worked out under this section.
[ CCH Note: S 4-10(3) was amended by No 16 of 2011, s 3 and Sch 1 item 1, by substituting " Note 1 " for " Note " in the note at the end of the subsection. However, since Note 3 also appears at the end of s 4-10(3), " Note " has been renumbered as " Note 1 " and " Note 3 " has been renumbered to " Note 2 " , in line with an editorial change made by the Federal Register of Legislation under the Legislation Act 2003 to bring it into line with legislative drafting practice.]
4-10(3A)
(Repealed by No 58 of 2006 )
Income tax worked out on another basis
4-10(4)
For some entities, some or all of their income tax for the * financial year is worked out by reference to something other than taxable income for the income year.
See section 9-5 .
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