Income Tax Act (No. 2) 1965

Legislation au C1965A00116 Not in force Act

Legislation content

Income Tax (No. 2)

No. 116 of 1965

An Act to amend the Income Tax Act 1965.

[Assented to 18 December, 1965]

BE it enacted by the Queen’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—

Short title and citation.

1.—(1.) This Act may be cited as the Income Tax Act (No. 2) 1965.

(2.) The Income Tax Act 1965 is in this Act referred to as the Principal Act.

(3.) The Principal Act, as amended by this Act, may be cited as the Income Tax Acts 1965.

Commencement.

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

Imposition of income tax.

3. Section 5 of the Principal Act is amended by omitting sub-section (3.) and inserting in its stead the following sub-sections:—

“(3.) Notwithstanding anything contained in this Act, but subject to the next succeeding sub-section, tax (other than further tax payable in accordance with section 94 of the Assessment Act) is not imposed upon a taxable income that does not exceed Two hundred and eight pounds derived by—

(a) a person other than a company;

(b) a company in the capacity of a trustee; or

(c) a non-profit company.

“(4.) The last preceding sub-section does not apply in relation to—

(a) a taxable income to which section 99a of the Assessment Act applies; or

(b) a taxable income of a superannuation fund to which section 121ca, section 121cb or section 121da of the Assessment Act applies.”.

Rates of tax payable by persons other than companies.

4. Section 6 of the Principal Act is amended by omitting sub-sections (4.) to (6.), inclusive, and inserting in their stead the following sub-sections:—


“(4.) The rate of further tax payable by a person in pursuance of sub-section (9.) of section 94 of the Assessment Act is as set out in the Fourth Schedule to this Act.

“(5.) Except as provided by the next three succeeding sub-sections, the rate of tax payable by a trustee is as set out in the Fifth Schedule to this Act.

“(6.) The rate of further tax payable by a trustee in pursuance of sub-section (11.) or sub-section (12.) of section 94 of the Assessment Act is as set out in the Fourth Schedule to this Act.

“(7.) The rate of tax payable by a trustee in respect of a taxable income to which section 99a of the Assessment Act applies is as set out in the Sixth Schedule to this Act.

“(8.) The rates of tax payable by a trustee of a superannuation fund are as set out in the Seventh Schedule to this Act.

“(9.) In this section, ‘tax’ does not include tax imposed in accordance with section 9 of this Act.”.

Amount of tax where taxable income does not exceed £214.

5. Section 7 of the Principal Act is amended by omitting the figure “(4.)” and inserting in its stead the figure “(5.)”.

Additional tax payable by persons other than companies.

6. Section 9 of the Principal Act is amended by omitting from sub-section (1.) the figure “(4.)” and inserting in its stead the figure “(5.)”.

Rates of tax payable by a company.

7. Section 11 of the Principal Act is amended by omitting from sub-section (1.) the word “Sixth” and inserting in its stead the word “Eighth”.

Elimination of small amounts.

8. Section 12 of the Principal Act is amended by omitting sub-section (1.) and inserting in its stead the following sub-section:—

“(1.) The provisions of this section apply in relation to—

(a) the amount of the tax (other than the further tax referred to in sub-sections (4.) and (6.) of section 6 of this Act) that a person would be liable to pay under the preceding provisions of this Act, before deducting any rebate or credit to which he is entitled; and

(b) the amount of the further tax that a person would be liable to pay in accordance with sub-section (4.) or sub-section (6.) of section 6 of this Act.”.

Fourth and Fifth Schedules.

9. The Fourth and Fifth Schedules to the Principal Act are repealed and the following Schedules inserted in their stead:—


“FOURTH SCHEDULE Section 6(4.), (6.).

Rate of Further Tax Payable in Pursuance of Sub-section (9.), (11.) or (12.) of Section 94 of the Assessment Act

The rate of further tax payable by a person in pursuance of sub-section (9.), (11.) or (12.) of section 94 of the Assessment Act is such rate per centum, if any, 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, that, but for sub-sections (4.) and (6.) of section 6 and section 8 of this Act and but for any rebate or credit to which he is entitled, would be payable by him, by an amount equal to one-hundredth of the amount of the taxable income of the person.

 

“FIFTH SCHEDULE Section 6(5.).

Rate of Tax Payable by a Trustee in Pursuance of Section 98 or Section 99 of the Assessment Act

The rate of tax in respect of the taxable income in respect of which a trustee is liable, in pursuance of either section 98 or section 99 of the Assessment Act, to be assessed and to pay tax is the rate that would be payable under the First, Second or Third Schedule, as the case requires, if one individual were liable to be assessed and to pay tax on that taxable income.

 

“SIXTH SCHEDULE Section 6(7.).

Rate of Tax Payable by a Trustee in Pursuance of Section 99a of the Assessment Act

The rate of tax in respect of the taxable income in respect of which a trustee is liable, in pursuance of section 99a of the Assessment Act, to be assessed and to pay tax is fifty per centum.

 

“SEVENTH SCHEDULE Section 6(8.).

Rates of Tax Payable by a Trustee of a Superannuation Fund

1. The rate of tax in respect of the taxable income of a superannuation fund in respect of which the trustee of the fund is liable, in pursuance of either section 121ca, section 121cb or section 121da of the Assessment Act, to be assessed and to pay tax is fifty per centum.

2. The rates of tax in respect of investment income of a superannuation fund of the year of income in respect of which the trustee of the fund is liable, in pursuance of section 121d of the Assessment Act, to be assessed and to pay tax are—

(a) for so much of that investment income as does not exceed Five thousand pounds —twenty-seven and one-half per centum; and

(b) for the remainder of that investment income—thirty-seven and one-half per centum.”.

Sixth Schedule.

10. The Sixth Schedule to the Principal Act is amended by omitting the word “SIXTH” and inserting in its stead the word “EIGHTH”.

 

Overview

The Income Tax (No. 2) Act 1965 was enacted to amend the Income Tax Act 1965, addressing the need to refine and update the income tax framework in Australia. The Act was introduced by the Queen’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, aiming to streamline and modernise the taxation system. The policy objective of this Act was to provide a more precise and efficient method of taxing incomes, particularly focusing on distinguishing between different entities and ensuring that tax rates and exemptions were accurately reflected. This legislation was crucial for maintaining an equitable and effective tax system, adjusting the rates and exemptions in response to economic conditions and legislative requirements of the time.

Scope and Application

The Income Tax (No. 2) Act 1965 amends the Income Tax Act 1965, altering various provisions related to the imposition and rates of income tax in Australia. This legislation applies to individuals, companies, trustees, and non-profit entities, setting forth specific tax rates and conditions under which certain income thresholds are exempt from taxation. Notably, the Act exempts taxable income not exceeding £208 from income tax for individuals, companies acting as trustees, and non-profit companies, unless the income is subject to specific sections of the Assessment Act. The Act's provisions are applicable nationally across Australia, as it operates under the Commonwealth jurisdiction. The Act also introduces new schedules to replace the repealed Fourth and Fifth Schedules, detailing the rates of further tax and the rates of tax payable by trustees, including those of superannuation funds. Additionally, the Act extends its application through subordinate instruments, which may provide further clarifications or adjustments to the tax rates and conditions stipulated in the principal Act.

Key Provisions

The Income Tax Act (No. 2) 1965 amends the Income Tax Act 1965 by introducing changes to the imposition of income tax, rates of tax payable by various entities, and the calculation of additional tax. Section 3 of the Act alters the threshold for tax imposition, exempting individuals, companies acting as trustees, and non-profit companies from tax on incomes up to £208, unless certain conditions apply (s. 3(3)). Section 4 revises the rates of tax payable by individuals and trustees, providing new rates in the Fourth and Fifth Schedules (s. 4). The rates for companies are adjusted in Section 7, with the Sixth Schedule now referred to as the Eighth Schedule (s. 7). The Act imposes specific obligations on taxpayers, trustees, and companies. Individuals and entities must ensure their taxable incomes are correctly calculated and reported to avoid exceeding the £208 threshold, unless exempt under specific provisions (s. 3(4)). Trustees and companies must adhere to the new tax rates specified in the amended schedules (ss. 4-7). Additionally, the Act mandates the application of these new rates to the specified incomes, ensuring compliance with the updated legislative framework (s. 8). Breaches of the Act may lead to civil and criminal consequences. Although the Act does not explicitly state penalties, non-compliance with tax obligations could result in penalties under the Assessment Act 1936, including fines and imprisonment for serious or repeated offences. The specific penalties would depend on the nature and extent of the breach, as outlined in the relevant tax legislation.

Legal classification tags

Area of Law
Taxation Law
Instrument
Act
Concepts
Commencement Provisions
Repeal & Amendment
Offence Provisions
Reporting & Disclosure Obligations
Regulatory Standards

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.