Income Tax Act 1975 (Cth)

INCOME TAX ACT 1975

No. 118 of 1975

An Act to impose a Tax upon Incomes.

BE IT ENACTED by the Queen, the Senate and the House of Representatives of Australia, as follows:—

Short title.

1. This Act may be cited as the Income Tax Act 1975.

Commencement.

2. This Act shall come into operation on the day on which it receives the Royal Assent.

Interpretation.

3. (1) In this Act, unless the contrary intention appears—

“Assessment Act” means the Income Tax Assessment Act 1936-1975;

“friendly society dispensary” means a friendly society dispensary to which Division 9a of Part III of the Assessment Act applies;

“investment income” has the same meaning as in Division 9b of Part III of the Assessment Act;

“non-profit company” means—

(a) a company that is not carried on for the purposes of profit or gain to its individual members and is, by the terms of the company’s constituent document, prohibited from making any distribution, whether in money, property or otherwise, to its members; or

(b) a friendly society dispensary;

“superannuation fund” means a provident, benefit, superannuation or retirement fund;

“tax” means income tax referred to in sub-section 5(1).

(2) In this Act, a reference to investment income, net income or taxable income shall be read as a reference to investment income, net income or taxable income, as the case may be, of the year of income.

Incorporation.

4.The Assessment Act is incorporated, and shall be read as one, with this Act.

Imposition of income tax.

5. (1) Income tax is imposed in accordance with this Act and at the rates declared in this Act.

(2) This Act does not impose tax payable in accordance with section 128b of the Assessment Act.

(3) This Act does not impose tax (other than further tax payable in pursuance of sub-section 94 (9), (11) or (12) of the Assessment Act or tax payable by a trustee of a superannuation fund in pursuance of section 121ca, 121cb or 121da of the Assessment Act)—

(a) upon—

(i) a taxable income derived by a person other than a company; or

(ii) the net income of a trust estate in respect of which the trustee is liable to be assessed and to pay tax under section 98 of the Assessment Act,

where that income does not exceed $1,040; or

(b) upon—

(i) a taxable income derived by a non-profit company; or

(ii) the net income of a trust estate in respect of which the trustee is liable to be assessed and to pay tax under section 99 of the Assessment Act,

where that income does not exceed $416.

Rates of tax payable by individuals and trustees.

6. (1) Except as otherwise provided by this Act, the rates of tax are as set out in Schedule 1.

(2) The rates of tax in respect of a taxable income to which Division 16 of Part III of the Assessment Act applies are as set out in Schedule 2.

 

(3) The rate of tax in respect of a taxable income in any case where section 59ab, 86 or 158d of the Assessment Act applies is as set out in Schedule 3.

(4) The rate of tax payable by a trustee in pursuance of section 98 or 99 of the Assessment Act is as set out in Schedule 4.

(5) The rate of tax payable by a trustee of a superannuation fund in respect of investment income of the fund in respect of which the trustee is liable, in pursuance of section 121d of the Assessment Act, to be assessed and to pay tax is 42.5 per centum.

(6) The rate of further tax payable by a person in pursuance of sub-section 94(9) of the Assessment Act is such amount (if any) per dollar as is ascertained by dividing an amount equal to one-half of the taxable income of the person, less the amount of tax (if any) imposed by this Act that, but for this sub-section and but for any rebate or credit to which the person is entitled (other than a rebate allowable by virtue of sub-section 159n(2), or an additional rebate allowable by virtue of paragraph 159n(3)(b), of the Assessment Act), would be payable by the person, by a number equal to the number of whole dollars in that taxable income.

(7) The rate of further tax payable by a trustee in pursuance of sub-section 94(11) or (12) of the Assessment Act is such amount (if any) per dollar as is ascertained by dividing an amount equal to one-half of the net income of the trust estate in respect of which the trustee is liable to be assessed and to pay tax under section 98 or 99 of that Act, less the amount of tax (if any) imposed by this Act that, but for this sub-section and but for any rebate or credit to which the trustee is entitled (other than a rebate allowable by virtue of sub-section 159n(2), or an additional rebate allowable by virtue of paragraph 159n(3)(b), of the Assessment Act), would be payable by the trustee in respect of that net income, by a number equal to the number of whole dollars in that net income.

(8) The rate of tax payable by a trustee in respect of the net income of the trust estate in respect of which the trustee is liable, in pursuance of section 99a of the Assessment Act, to be assessed and to pay tax is 50 per centum.

(9) The rate of tax payable by a trustee of a superannuation fund in respect of the taxable income of the fund in respect of which the trustee is liable, in pursuance of section 121ca, 121cb or 121da of the Assessment Act, to be assessed and to pay tax is 50 per centum.

Limitation of tax payable on certain incomes.

7. (1) Where the taxable income of a person does not exceed $1,492, the amount of tax payable by him under sub-section 6(1), (2) or (2) shall not exceed 66 per centum of the amount by which the taxable income exceeds $1,040 less any rebate or credit to which he is entitled.

(2) Where the net income of a trust estate in respect of which a trustee is liable to be assessed and to pay tax under section 98 of the Assessment Act does not exceed $1,492, the amount of tax payable by the trustee under sub-section 6(4) in respect of that net income shall not exceed 66 per centum of the amount by which that net income exceeds $1,040 less any rebate or credit to which the trustee is entitled.

(3) Where the net income of a trust estate in respect of which a trustee is liable to be assessed and to pay tax under section 99 of the Assessment Act does not exceed $748, the amount of tax payable by the trustee under sub-section 6(4) in respect of that net income shall not exceed 45 per centum of the amount by which that net income exceeds $416 less any rebate or credit to which the trustee is entitled.

Rates of tax payable by companies.

8. (1) The rates of tax payable by a company, other than a company in the capacity of a trustee, are as set out in Schedule 5.

(2) Where the taxable income of a non-profit company other than a friendly society dispensary does not exceed $1,830, the amount of tax payable by the company shall not exceed 55 per centum of the amount by which the taxable income exceeds $416 less any rebate or credit to which the company is entitled.

 

(3) Where the taxable income of a non-profit company that is a friendly society dispensary does not exceed $1,664, the amount of tax payable by the company shall not exceed 50 per centum of the amount by which the taxable income exceeds $416 less any rebate or credit to which the company is entitled.

Adjustment where amount to be paid by, or refunded to, taxpayer would not exceed 49 cents.

9. (1) This section applies for the purposes of the making of an assessment of tax under this Act (other than further tax payable in pursuance of sub-section 94(9) (11) or (12) of the Assessment Act) in respect of the income of a taxpayer of a year of income where, upon the making of the assessment and the serving of notice of the assessment upon the taxpayer, there would, but for this section, be a net amount of not more than 49 cents payable by the Commissioner to the taxpayer, or by the taxpayer to the Commissioner, under the law relating to income tax, after taking into account all liabilities of the taxpayer, and all rebates and credits allowable to the taxpayer, under that law.

(2) Where this section applies in relation to the making of an assessment—

(a) if the amount of not more than 49 cents would be an amount payable to the taxpayer—additional tax equal to that amount is imposed by this Act in respect of the income of the taxpayer of the year of income; and

(b) if the amount of not more than 49 cents would be an amount payable to the Commissioner—the amount that, but for this section, would be the amount of income tax imposed by this Act in respect of the income of the taxpayer of the year of income, before the allowance of any rebates to which the taxpayer is entitled, is reduced by so much of that amount of not more than 49 cents as does not exceed the amount calculated by deducting the amount of any such rebates from the sum of the amount that is to be so reduced and any amount of further tax payable by the taxpayer in respect of that year of income in pursuance of sub-section 94(9), (11) or (12) of the Assessment Act.

(3) A reference in this section to a liability of the taxpayer shall be read as including a reference to a liability in respect of income tax or provisional tax notified to the taxpayer by the Commissioner, notwithstanding that the amount of the liability has not become due and payable.

(4) For the purposes of any calculation under the law relating to income tax that depends upon the amount of tax paid or payable by, or assessed in respect of the income of, a taxpayer, the tax assessed and payable under an assessment in relation to which this section applies shall be deemed to be the tax that would have been so assessed and payable if this section had not applied.

Levy of tax.

10. The tax imposed by the preceding provisions of this Act is levied, and shall be paid, for the financial year that commenced on 1 July 1975 and, until the Parliament otherwise provides, for the next succeeding financial year.

Instalments of tax.

11.Instalments of tax are payable by a company, in accordance with the provisions of Division 1a of Part VI of the Assessment Act, in respect of income of the year of income that commenced on 1 July 1975.

Provisional tax.

12. Provisional tax is imposed and is payable, in accordance with the provisions of the Assessment Act, in respect of the income of the year of income that commenced on 1 July 1975.

Act to be deemed to be the Act declaring rates of income tax.

13. For the purposes of sub-sections 104(1), 160(3) and 221yb(3) of the Assessment Act, this Act shall be deemed to be the Act declaring the rates of income tax payable for the financial year that commenced on 1 July 1975.

 

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SCHEDULE 1 Sub-section 6(1)

GENERAL RATES OF TAX

The rate of tax in respect of each part of the taxable income specified in column 1 of the following table is the rate per centum set out in column 2 of that table opposite to the reference to that part of the taxable income:—

Column 1	Column 2
Rates
Parts of Taxable Income	per centum
The part of the taxable income that—
does not exceed $2,000.............................................................................................	20
exceeds $2,000 but does not exceed $5,000.............................................................	27
exceeds $5,000 but does not exceed $10,000...........................................................	35
exceeds $10,000 but does not exceed $15,000.........................................................	45
exceeds $15,000 but does not exceed $20,000.........................................................	55
exceeds $20,000 but does not exceed $25,000.........................................................	60
exceeds $25,000........................................................................................................	65

 

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SCHEDULE 2 Sub-section 6(2)

RATES OF TAX BY REFERENCE TO AN AVERAGE INCOME

In the case of a taxpayer to whose income Division 16 of Part III of the Assessment Act applies, the rates of tax are—

(a) for every $1 of so much of the taxable income as does not exceed $16,000—

 

SCHEDULE 2—continued

(i) the rate ascertained by determining the tax that would be payable if the rates set out in Schedule 1 were applied to a taxable income equal to his average income and dividing the resultant amount by a number equal to the number of whole dollars in that average income; or

(ii) 36 cents,

whichever is the less; and

(b) for every $1 of the remainder of the taxable income, the rate ascertained by deducting the amount of $5,760 from the tax that would be payable if the rates set out in Sched­ule 1 were applied to the total taxable income and dividing the resultant amount by a number equal to the number of whole dollars in that remainder.

 

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SCHEDULE 3 Sub-section 6(3)

RATE OF TAX BY REFERENCE TO A NOTIONAL INCOME

For every $1 of the taxable income of a taxpayer deriving a notional income, as specified by section 59ab, 86 or 158bof the Assessment Act, the rate of tax is the rate ascertained by dividing the tax that would be payable under Schedule 1 upon a taxable income equal to his notional income by a number equal to the number of whole dollars in that notional income.

 

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SCHEDULE 4 Sub-section 6(4)

RATE OF TAX PAYABLE BY A TRUSTEE IN PURSUANCE OF SECTION 98 OR 99 OF THE ASSESSMENT ACT

The rate of tax in respect of the net income of a trust estate in respect of which a trustee is liable, in pursuance of section 98 or 99 of the Assessment Act, to be assessed and to pay tax is the rate that would be payable under Schedule 1, 2 or 3, as the case requires, if one individual were liable to be assessed and to pay tax on that income as his taxable income.

 

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SCHEDULE 5 Section 8

RATES OF TAX PAYABLE BY A COMPANY OTHER THAN A COMPANY IN THE CAPACITY OF A TRUSTEE

1. The rate of tax in respect of the taxable income of a company not being—

(a) a private company; or

(b) a non-profit company that is a friendly society dispensary, is 42.5 per centum.

2. In the case of a company that is a private company, the rates of tax are—

(a) in respect of the taxable income—42.5 per centum; and

(b) in respect of the undistributed amount in respect of which the company is liable under section 104 of the Assessment Act to pay additional tax—50 per centum.

3. The rate of tax in respect of the taxable income of a non-profit company that is a friendly society dispensary is 37.5 per centum.