Income Tax Assessment Act 1936
No. 27, 1936
Compilation No. 192
Compilation date: 1 July 2026
Includes amendments: Act No. 17, 2025, Act No. 57, 2025, Act No. 49, 2026 and Act No. 58, 2026
This compilation is in 7 volumes
Volume 1: | Part I to Part III, Division 3 |
| sections 1 to 82KZO |
Volume 2: | Part III, Divisions 3A to 9C |
| sections 82LA to 121L |
Volume 3: | Part III, Division 10E to Part VA, Division 8 |
| sections 124ZM to 204 |
Volume 4: | Part VIIB to Part X, Division 11 |
| sections 251R to 468 |
Volume 5: | Schedules |
Volume 6: | Endnotes 1 to 4 |
Volume 7: | Endnote 5 |
Each volume has its own contents
About this compilation
This compilation
This is a compilation of the Income Tax Assessment Act 1936 that shows the text of the law as amended and in force on 1 July 2026 (the compilation date).
The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the compiled law. The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au).
Application, saving and transitional provisions
If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see the endnotes.
Presentational changes
The Legislation Act 2003 provides for First Parliamentary Counsel to make presentational changes to a compilation. Presentational changes are applied to give a more consistent look and feel to legislation published on the Register, and enable the user to more easily navigate those documents.
Modifications
If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. Any modifications affecting the law are accessible on the Register.
Self‑repealing provisions
If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.
Contents
Part I—Preliminary
1 Short title
6 Interpretation
6AB Foreign income and foreign tax
6B Income beneficially derived
6BA Taxation treatment of certain shares
6C Source of royalty income derived by a non‑resident
6CA Source of natural resource income derived by a non‑resident
6D Some tax offsets under the 1997 Assessment Act are treated as credits
6F Dual resident investment company
6H Recognised small credit unions, recognised medium credit unions and recognised large credit unions
7B Application of the Criminal Code
Part II—Administration
8 Commissioner
14 Annual report
Part III—Liability to taxation
Division
Overview
The Income Tax Assessment Act 1936, No. 27, was enacted to consolidate and amend the law relating to the imposition, assessment, and collection of income tax in Australia. This Act, as amended, provides a comprehensive framework for the administration of income tax, addressing various aspects of income taxation including the definition of assessable income, deductions, and the treatment of foreign income and certain benefits. The Act is administered by the Australian Taxation Office (ATO) and is subject to the oversight of the Australian Parliament. The policy objectives of the Act include ensuring that income tax is applied fairly and consistently, preventing tax avoidance and evasion, and providing for the equitable distribution of tax revenue to fund public services and infrastructure. The Act's amendments over the years reflect changes in economic conditions, business practices, and legislative priorities, aiming to maintain the effectiveness and integrity of the tax system.
Scope and Application
The Income Tax Assessment Act 1936 applies to all taxpayers, including individuals, companies, partnerships, and trustees of estates, who are subject to the Australian income tax system. It outlines the rules and regulations governing the assessment, collection, and administration of income tax. The Act applies to all income derived by taxpayers within Australia, as well as foreign income derived by Australian residents. The Act is administered by the Commissioner of Taxation and has a Commonwealth jurisdiction. Certain entities and individuals are exempt from specific provisions under the Act, such as certain State and Territory bodies, and certain income streams, including dividends, foreign income, and benefits received under certain tax avoidance schemes. The Act also allows for the application of subordinate instruments, which can extend or restrict its application, providing flexibility in addressing emerging tax issues and ensuring the effectiveness of the income tax system.
Key Provisions
- The Income Tax Assessment Act 1936, as compiled on 1 July 2026, includes several key provisions that dictate the taxation rules for individuals and entities. Section 6 provides that income derived from foreign sources by non-residents is taxable in Australia. Section 23AA to 23AI exempt certain income derived from foreign sources by non-residents from Australian taxation. Section 21A to 21G detail the assessable income, including income from dividends, bonuses, and various benefits, while Section 51AAA to 52 ensure that certain deductions are not allowable, such as those related to non-cash business benefits or property held for personal use. The Act also includes specific exemptions for certain bodies like credit unions and State/Territory bodies, as outlined in Sections 23G to 23L.
- The Act imposes obligations on taxpayers to accurately report their income and claim allowable deductions. Section 25A mandates that taxpayers must include all assessable income in their returns, while Section 82KJ to 82KL prohibits deductions for certain pre-paid outgoings and recouped expenditure that are part of tax avoidance schemes. Section 24AK to 24AS require specific reporting and exemptions for certain types of income and expenditures, such as those related to scientific research or Defence Force members serving overseas.
- Breaches of the Act can result in significant consequences. Section 328 imposes penalties for providing false or misleading information to the Commissioner, with penalties escalating based on the intent behind the false information. Section 328A specifies penalties for failing to lodge tax returns or providing incomplete or inaccurate returns. Criminal penalties may apply for serious breaches, including imprisonment, as outlined in Chapter 2 of the Criminal Code. Additionally, Section 82KH to 82KL address the disallowance of deductions and tax benefits for expenditures incurred as part of tax avoidance schemes, with potential amendments to assessments if circumstances change.
- In summary, the Income Tax Assessment Act 1936 sets clear rules for the assessment and collection of income tax, imposes specific reporting and compliance requirements on taxpayers, and provides for penalties and amendments to assessments for breaches or changes in circumstances.
- Area of Law
- Taxation Law
- Instrument
- Act
- Concepts
- Definitions & Interpretation
- Assessable Income
- Deductions
- Tax Offsets
- Compliance Obligations
- Regulatory Standards