Income Tax Regulations (Amendment)

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STATUTORY RULES.

1940. No. .

REGULATIONS UNDER THE INCOME TAX ASSESSMENT ACT 1936-1940.*

I, THE GOVERNOR-GENERAL in and over the Commonwealth of Australia, acting with the advice of the Federal Executive Council, hereby make the following Regulations under the Income Tax Assessment Act 1936-1940.

Dated this sixteenth day of December, 1940.

Governor-General.

By His Excellency’s Command,

Treasurer.

Amendments of Income Tax Regulations.†

Parts.

1. Regulation 2 of the Income Tax Regulations is amended by inserting after the words “Part VI.—Collection and Recovery of Tax.” the words “Part VIa.—Deductions from Salaries or Wages of Employees.”.

Returns by persons other than companies.

2. Regulation 10 of the Income Tax Regulations is amended by inserting in paragraph (d), after the item “Deductions claimed in respect of children;”, the item ‘, Deduction claimed in respect of mother;”.

Returns by companies.

3. Regulation 11 of the Income Tax Regulations is amended by omitting from, sub-paragraph (iii) of paragraph (c) of sub-regulation (2.) the words “Two hundred and fifty pounds” (wherever occurring) and inserting in their stead the words “Two hundred pounds.”.

How tax may be paid.

4. Regulation 44 of the Income Tax Regulations is amended—

(a) by omitting from paragraph (a) the words “or cheques” and inserting in their stead the words “cheques or tax stamps”; and

(b) by inserting in paragraph (b), after the word “sent”, the words”, or tax stamps”.

* Notified in the Commonwealth Gazette on , 1940.

† Statutory Rules 1936, No. 96, as amended by Statutory Rules 1936, Nos. 6 and 42, and 1940, No. 138.

7475.—15/9.12.1940.—Price 3d.

5. After Part VI. of the Income Tax Regulations the following Part is inserted:—

“Part VIa.—Deductions from Salaries or Wages of Employees.

Rates of deductions where no dependants.

“54a.—(1.) Where the salary or wages payable to an employee, in respect of any week or part thereof, exceeds Three pounds seventeen shillings, the rates at which the employer shall make deductions, for the purposes of section 221c of the Act, from every pound or part of a pound in excess of Ten shillings, shall be—

(a) where the salary or wages exceeds Three pounds seventeen shillings but does not exceed Four pounds ten shillings—sixpence;

(b) where the salary or wages exceeds Four pounds ten shillings but does not exceed Five pounds ten shillings—one shilling;

(c) where the salary or wages exceeds Five pounds ten shillings but does not exceed Six pounds ten shillings—one shilling and sixpence;

(d) where the salary or wages exceeds Six pounds ten shillings but does not exceed Seven pounds ten shillings—two shillings;

(e) where the salary or wages exceeds Seven pounds ten shillings but does not exceed Nine pounds ten shillings—two shillings and sixpence;

(f) where the salary or wages exceeds Nine pounds ten shillings but does not exceed Eleven pounds ten shillings—three shillings;

(g) where the salary or wages exceeds Eleven pounds ten shillings but does not exceed Seventeen pounds ten shillings— three shillings and sixpence;

(h) where the salary or wages exceeds Seventeen pounds ten shillings but does not exceed Eighteen pounds ten shillings—four shillings and sixpence; and

(i) where the salary or wages exceeds Eighteen pounds ten shillings—five shillings.

Rate of deductions where employee has dependants.

“54b.—(1.) Notwithstanding anything contained, in the last preceding regulation, where an employee furnishes to his employer, in a form approved by the Commissioner or the Deputy Commissioner and in the manner prescribed by these Regulations, a declaration that, on the first day of July immediately preceding the date or dates on which deductions are to be made, he was wholly maintaining one or more dependent persons, the rate of deductions shall, in the case of that employee, be such rate as will cause the total amount deducted in pursuance of section 221c of the Act from the salary or wages, paid to him in respect of a week or part thereof, to be five shillings less in respect of each such dependent person than that total amount would be if the deductions were made at the rate prescribed by the last preceding regulation.

“(2.) For the purposes of this regulation “dependent person” means a person to whom, in respect of the employee, paragraph (a) (b), or (ba) of section 79 of the Act applies.

Manner in which declaration to be furnished.

“54c. An employee furnishing a declaration for the purposes of the last preceding regulation shall complete and sign, in duplicate, the form approved by the Commissioner or Deputy Commissioner and shall furnish both copies, one marked “original” and the other marked “duplicate”, to the employer.

Employer to forward duplicate to Deputy Commissioner.

“54d. Within thirty days of receiving a declaration furnished to him in accordance with the last preceding regulation, an employer shall sign and forward the copy marked “duplicate” to the Deputy Commissioner for the State in which the declaration is furnished.

Penalty: Twenty pounds.”.

By Authority: L. F. Johnston, Commonwealth Government Printer, Canberra.

Overview

The Statutory Rules 1940, No. 96, made under the Income Tax Assessment Act 1936-1940, address the need to update the Income Tax Regulations to reflect changes in the tax system and administrative practices. Enacted by the Governor-General in Council, these regulations amend the Income Tax Regulations to introduce new procedures for deductions from employees' salaries and wages, modify the amount of tax that companies can pay, and update the methods by which tax can be paid. The policy objective behind these amendments is to ensure that the tax regulations remain current and effective in line with the evolving requirements of the income tax system. The regulations aim to streamline tax collection and ensure compliance by updating various procedural aspects of the tax code.

Scope and Application

The Statutory Rules 1940 No. 194, under the Income Tax Assessment Act 1936-1940, introduce amendments to the Income Tax Regulations concerning deductions from the salaries or wages of employees, returns by individuals and companies, and the methods by which tax may be paid. These regulations apply to all employers and employees within the Commonwealth of Australia, and to companies registered under the relevant federal laws. They establish specific rates of deductions for various income brackets and provide a mechanism for employees to declare dependents to receive a reduced deduction rate. Additionally, the regulations amend existing rules regarding tax returns and payment methods, allowing for the use of tax stamps in addition to cheques. The scope of these regulations is extended through subordinate instruments which may further define the application and implementation of these rules.

Key Provisions

The main provisions of these regulations, as outlined in the legislative instrument, include amendments to several regulations under the Income Tax Assessment Act 1936-1940. Firstly, Regulation 2 has been amended by introducing a new Part VIa, which deals with deductions from the salaries or wages of employees (sections 54a-54d). Secondly, Regulation 10 has been amended to include a new item related to deductions claimed in respect of a mother (subsection 10(1)(d)). Thirdly, Regulation 11 has been amended by reducing the threshold amount from Two hundred and fifty pounds to Two hundred pounds (subsection 11(2)(c)(iii)). Lastly, Regulation 44 has been amended to allow for tax payments to be made via cheques or tax stamps (subsections 44(a) and 44(b)). These regulations impose specific obligations on employers, employees, and other relevant parties. Employers must adhere to the new rates of deductions outlined in Part VIa of Regulation 2, depending on the employee's salary or wage and whether they have dependents to maintain. Employers are also required to forward the duplicate copy of the employee's declaration to the Deputy Commissioner within thirty days of receiving it. Employees must provide their employer with a declaration form, approved by the Commissioner or Deputy Commissioner, if they have dependents and wish to reduce the amount of tax deducted from their salary or wages. Failure to comply with these requirements may result in penalties or consequences under the Income Tax Assessment Act 1936-1940. The regulations establish certain penalties and consequences for non-compliance. Employers who fail to forward the duplicate copy of the employee's declaration to the Deputy Commissioner within thirty days may be subject to a penalty of Twenty pounds (subsection 54d). Additionally, any breach of the provisions outlined in these regulations may result in civil or criminal consequences under the Income Tax Assessment Act 1936-1940. The maximum penalties for such breaches depend on the nature and severity of the offence, as determined by the relevant courts. It is important for all parties involved to adhere to these regulations to avoid any potential penalties or consequences.

Area of Law: Taxation Law
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Offence Provisions; Reporting & Disclosure Obligations

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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.

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