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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:

Start formula Number of *business kilometres travelled by the *car in the income year times Rate of cents/kilometre determined under subsection (4) for the car for the income year end 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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