Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 28.25

How to calculate your deduction

             (1)  To calculate your deduction using the "cents per kilometre" method, use this formula:

             (2)  But you can use this formula for the first 5,000 * business kilometres only. If the * car travelled more than 5,000 business kilometres, you must discard the kilometres in excess of 5,000.

Example:    If the car travelled 5,085 business kilometres, you could claim for 5,000, and would lose the extra 85.

             (3)  Business kilometres are kilometres the * car travelled in the course of:

                     (a)  producing your assessable income; or

                     (b)  your * travel between workplaces.

You calculate the number of business kilometres by making a reasonable estimate.

             (4)  For the purposes of subsection (1), the Commissioner may, by legislative instrument, determine rates of cents per kilometre for cars for an income year.

             (5)  In determining a rate, the Commissioner must have regard to the average operating costs for the cars to be covered by that rate.

Note:          Examples of operating costs include fixed costs such as registration, insurance and depreciation, and variable costs such as fuel and maintenance.



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