Income Tax Assessment Act 1997
No. 38, 1997
Compilation No. 266
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 12 volumes
Volume 1: | Chapter 1, Part 1‑1 to Chapter 2, Part 2‑5 sections 1‑1 to 36‑55 |
Volume 2: | Chapter 2, Part 2‑10 to Chapter 2, Part 2‑20 sections 40‑1 to 67‑30 |
Volume 3: | Chapter 2, Part 2‑25 to Chapter 3, Part 3‑1 sections 70‑1 to 121‑35 |
Volume 4: | Chapter 3, Part 3‑3 to Chapter 3, Part 3‑5 sections 122‑1 to 197‑85 |
Volume 5: | Chapter 3, Part 3‑6 to Chapter 3, Part 3‑10 sections 200‑1 to 253‑15 |
Volume 6: | Chapter 3, Part 3‑25 to Chapter 3, Part 3‑30 sections 275‑1 to 313‑85 |
Volume 7: | Chapter 3, Part 3‑32 to Chapter 3, Part 3‑50 sections 315‑1 to 421‑85 |
Volume 8: | Chapter 3, Part 3‑80 to Chapter 3, Part 3‑90 sections 615‑1 to 721‑40 |
Volume 9: | Chapter 3, Part 3‑95 to Chapter 4, Part 4‑5 sections 723‑1 to 880‑205 |
Volume 10: | Chapter 5, Part 5‑30 to Chapter 6, Part 6‑5 sections 900‑1 to 995‑1 |
Volume 11: | Endnotes 1 to 3 |
Volume 12: | Endnote 4 |
Each volume has its own contents
About this compilation
This compilation
This is a compilation of the Income Tax Assessment Act 1997 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
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Overview
The Income Tax Assessment Act 1997, as amended, is a comprehensive piece of legislation that governs the assessment and collection of income tax in Australia. Enacted by the Australian Parliament, the Act was introduced to address the complexities and ambiguities in the existing income tax framework, aiming to provide clear and consistent rules for taxpayers and the Australian Taxation Office (ATO) to follow. The Act consolidates and rewrites the income tax provisions previously found in the Income Tax Assessment Act 1936 in a more accessible and user-friendly format, while maintaining the substantive law. The policy objective of the Act is to ensure that income tax is levied and collected in a fair, efficient, and transparent manner, thereby contributing to the overall revenue of the government and facilitating economic stability and growth. The Act's structure, including its detailed guides, checklists, and explanatory notes, is designed to assist taxpayers in understanding their obligations and rights under the income tax system.
Scope and Application
The Income Tax Assessment Act 1997 (the Act) applies to individuals, companies, and certain other entities that are required to pay income tax in Australia. The Act covers a wide range of topics including the calculation of taxable income, assessable income, deductible losses, and tax offsets, among other matters. It applies to all entities within the Commonwealth of Australia, including its territories, and is administered by the Commissioner of Taxation. Certain exclusions and exemptions exist, such as for non-assessable non-exempt income, certain political contributions, and bribes or kickbacks. The Act's application may be extended or restricted by subordinate legislation, but the primary text outlines the broad parameters of its application. The Act also includes specific provisions regarding the deductibility of certain types of income and expenses, and the treatment of tax losses from prior years, which can be carried forward under certain conditions.
Key Provisions
- The Income Tax Assessment Act 1997, as amended, governs the taxation of income in Australia. It includes provisions for determining assessable income (sections 6-5 to 6-25), allowable deductions (sections 8-1 to 8-10), tax offsets (section 13-1), and the liability of various entities to pay tax (sections 9-1 to 9-5). The Act outlines how income tax is calculated, including the steps to determine taxable income and basic income tax liability, and the role of tax offsets in reducing the final tax payable. Additionally, it provides specific rules for certain types of income and deductions, such as those related to car expenses (Division 28), gifts and contributions (Division 30), and entertainment expenses (Division 32).
- Entities subject to the Act, including individuals, companies, and trustees of trusts, must comply with its provisions, which include the obligation to report all assessable income accurately, claim allowable deductions and tax offsets, and pay any resulting tax liability. This involves maintaining records and documentation to substantiate claims, such as substantiation for car expenses (section 28-120) and substantiation for gifts of property (section 30-212). Furthermore, entities must adhere to the rules regarding the deductibility of certain expenses, such as the prohibition on deducting entertainment expenses (section 32-5) and the specific conditions under which certain gifts or contributions may be deductible (Division 30).
- Breaches of the Act can result in both civil and criminal consequences. For example, the Act imposes penalties for failing to lodge tax returns on time (section 288-10) and for providing false or misleading statements (section 283-5). In cases of serious non-compliance, such as tax evasion, the penalties can be severe, including substantial fines and imprisonment (section 284-5). The Act also specifies penalties for other offences, such as failing to disclose foreign financial assets (section 260-25), which can include fines up to 100% of the tax shortfall (section 284-10). Additionally, the Act includes provisions for the disallowance of deductions and the imposition of interest on unpaid tax, further incentivising compliance.
- Area of Law
- Taxation Law
- Commercial Law
- Instrument
- Act
- Concepts
- Definitions & Interpretation
- Commencement Provisions
- Licensing & Registration
- Enforcement Mechanisms
- Penalties & Fines
- Tax Losses Carry Forward
- Tax Offsets