Income Tax (Individuals) Act 1985

Legislation au C2004A03163 Not in force Act

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Income Tax (Individuals) Act 1985

No. 124 of 1985

 

 

An Act to impose a tax upon incomes, other than incomes of companies, corporate unit trusts, superannuation funds and certain other trusts

[Assented to 28 October 1985]

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

Short title

1. This Act may be cited as the Income Tax (Individuals) Act 1985.

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;

“corporate unit trust” means a unit trust that is a corporate unit trust within the meaning of Division 6b of Part III of the Assessment Act;


“ineligible approved deposit fund” means an ineligible approved deposit fund within the meaning of Division 9b of Part III of the Assessment Act;

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

(2) In this Act, a reference to taxable income shall be read as a reference to taxable income 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 relevant rates declared by the Income Tax (Rates) Act 1982.

(2) This Act does not impose tax payable by—

(a) a company (other than a company in the capacity of a trustee);

(b) a person in the capacity of a trustee of a superannuation fund;

(c) a person in the capacity of a trustee of a corporate unit trust;

(d) a person in the capacity of a trustee of an ineligible approved deposit fund; or

(e) a person in the capacity of a trustee of a trust estate, being a person who is liable to be assessed and to pay tax under sub-section 98 (3) of the Assessment Act.

(3) This Act does not impose tax payable in accordance with section 121h, 126, 128b, 128n, 128t, 128v, 136a or 159c of the Assessment Act.

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

6. (1) This section applies for the purposes of the making of an assessment of tax (other than further tax payable in pursuance of subsection 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 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 lax 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

7. The tax imposed by sub-section 5 (1) is levied, and shall be paid, for the financial year that commenced on 1 July 1985 and, until the Parliament otherwise provides, for the next succeeding financial year.

Provisional tax

8. 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 1985.

Act to be deemed to be the Act imposing income tax

9. For the purposes of sub-section 221yb (3) of the Assessment Act, this Act shall be deemed to be the Act imposing income tax upon taxable income of the financial year that commenced on 1 July 1985.

[Minister’s second reading speech made in—

House of Representative on 19 September 1985

Senate on 15 October 1985]

Overview

The Income Tax (Individuals) Act 1985 was enacted by the Australian Parliament to impose income tax on individual taxpayers, excluding entities such as companies, corporate unit trusts, superannuation funds, and certain other trusts. The Act provides for the imposition of income tax at rates declared by the Income Tax (Rates) Act 1982 and ensures that the Income Tax Assessment Act 1936 is incorporated with this Act. The primary policy objective of the Act is to establish a clear framework for the assessment and collection of income tax from individuals, thereby contributing to the Commonwealth's revenue. Additionally, the Act includes provisions to adjust tax amounts that would otherwise be less than 49 cents, ensuring administrative efficiency and fairness in the tax collection process.

Scope and Application

The Income Tax (Individuals) Act 1985 applies to individuals who are subject to income tax, excluding entities such as companies, corporate unit trusts, superannuation funds, and certain other trusts. The Act imposes income tax on these individuals in accordance with the rates declared by the Income Tax (Rates) Act 1982, and it operates in conjunction with the Income Tax Assessment Act 1936, which is incorporated into this Act. The Act also applies to provisional tax, which is imposed and payable in accordance with the provisions of the Assessment Act. This legislation has a Commonwealth reach and applies to individuals throughout Australia. Certain exclusions are specified, such as individuals in the capacity of a trustee of specified funds or those liable to tax under certain sections of the Assessment Act. The Act also includes a provision for an adjustment where the amount to be paid or refunded to a taxpayer would not exceed 49 cents, ensuring that negligible amounts of tax do not result in excessive administrative burden or negligible financial impact on taxpayers. The scope and application of the Act can be further defined or modified through subordinate instruments issued under its authority.

Key Provisions

The Income Tax (Individuals) Act 1985 (sections 5 and 7) imposes income tax on individual taxpayers at the rates declared by the Income Tax (Rates) Act 1982 for the financial year that commenced on 1 July 1985 and for the next succeeding financial year. This Act does not impose tax on companies (other than companies in the capacity of a trustee), trustees of superannuation funds, corporate unit trusts, ineligible approved deposit funds, or trustees of certain trust estates (section 5(2)). The Act also incorporates the Income Tax Assessment Act 1936 (section 4) and provides for adjustments where the amount payable or refundable would not exceed 49 cents (section 6). In such cases, a small additional tax is imposed or the tax payable is reduced by the amount not exceeding 49 cents. The obligations of individual taxpayers under this Act include ensuring that they are assessed for and pay income tax at the relevant rates for the specified financial years. Taxpayers must comply with the provisions of the Assessment Act, which governs the calculation and payment of income tax. This includes lodging income tax returns, providing necessary documentation, and making provisional tax payments as required. The Commissioner of Taxation is responsible for administering the Act and ensuring that taxpayers fulfill their obligations. Breach of the obligations imposed by the Income Tax (Individuals) Act 1985 can result in various civil and criminal consequences. Failure to comply with the Act can lead to penalties, fines, and interest on unpaid tax. The Assessment Act specifies the maximum penalties for non-compliance, which can include fines of up to $1,100 and imprisonment for up to 12 months for serious offences. Additionally, taxpayers who deliberately attempt to evade tax can face more severe penalties, including fines of up to $27,500 and imprisonment for up to five years. These penalties reflect the seriousness with which the law treats non-compliance and the importance of adhering to tax obligations.

Legal classification tags

Area of Law
Taxation Law
Instrument
Act
Concepts
Definitions & Interpretation
Commencement Provisions
Imposition of income tax
Adjustment where amount to be paid by, or refunded to, taxpayer would not exceed 49 cents
Levy of tax

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.