INCOME TAX ASSESSMENT ACT 1997 - SECT 4.15 How to work out your taxable income

Commonwealth Consolidated Acts

How to work out your taxable income

(1) Work out your taxable income for the income year like this:

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 deduct in a later income year: see Division 36.

(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 same business test	Subdivision 165‑B
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 carries passengers, freight or mail shipped in Australia	section 129 of the Income Tax Assessment Act 1936
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/FHSA 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.