Commonwealth Numbered Regulations - Explanatory Statements

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INCOME TAX REGULATIONS (AMENDMENT) 1996 NO. 38

EXPLANATORY STATEMENT

STATUTORY RULES 1996 No. 38

Issued by the Authority of the Assistant Treasurer

Income Tax Assessment Act 1936

Income Tax Regulations (Amendment)

These Regulations amend the Income Tax Regulations by inserting a new Part 10 at the end of Schedule 6.

Section 3-2 in Schedule 2A of the Act enables a taxpayer to elect an arbitrary basis of deduction under that section in relation to a car that is owned or leased by the taxpayer and used for the purpose of producing assessable income, where the number of kilometres travelled for that purpose that is claimed for is not more than 5,000 in a year of income.

The deduction allowable under section 3-2 in Schedule 2A is equal to the number of business kilometres multiplied by the rate of cents per kilometre prescribed by regulation applicable to the car's engine type and size, expressed in cubic centimetres.

The regulations prescribe car expense deduction rates for the purposes of section 3-2 in Schedule 2A of the Act that are to apply for the year of income commencing 1 July 1995.

The regulations will also be used to calculate the taxable value of a number of fringe benefits that relate to motor vehicles (such as remote area holiday travel) provided in the fringe benefits tax year ending 31 March 1996.

The Regulations commenced on gazettal.


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