AustraliaTax Deductions Details


Deductions towards Self education expenses in Australia Income Tax


Australia Income Tax payers who are Permanent residents of Australia or individuals holding Australia PR visa can claim deductions for self-education expenses as per the Australia Income tax.


The primary conditions which must be satisfied for claiming deductions under the head are as follows:

  • When the self-education is relative to the current work activities as an employee of an organization.

  • The course must have sufficient connection to the current work activities and maintain and improve the specific knowledge required in the current work

  • The course must result in, or must likely result to increase of an individual’s income in the current work activity.

  • When an individual receives a taxable bond scholarship during his course of employment in Australia and is employed by a scholarship provider.

Expenses allowed as deduction under the head self-education expenses as per the Australia Income Tax Law are as follows:-

Permanent residents and individuals holding Australia PR visa can claim deductions


Expenses in category A, B, C, D are allowed as deductions where expenses in category E are not allowed as deductions.


The formula for calculating the self- education expenses is:-


Total claim estimate = A − [$250 − (C+D+E expenses)]+B+C+D


Note: - If the total of (C+D+E expenses) is greater than $250 it is reduced to 0, not a negative amount.


Low Value Pool Deductions in Australia Income Tax:


Individuals who are permanent residents of Australia or Australia PR holders are allowed to claim deductions for low value pool as per the Australia Income Tax law.


Now, pooling in simpler terms mean to reduce the value of the asset and record such assets at a lower cost in the financial statements and low value pool assets are low cost assets which cost less than $1000.


So, low value pool deduction means claiming deduction for the decline in the value of the asset.


As per Australia Income Tax law, Australia Income taxpayers need to fulfill three primary conditions in order to claim low value pool deductions, which are as follows:-

  • An individual tax payer be it a permanent resident of Australia or a foreign citizen working in Australia, can have only one low value pool.

  • Once an individual chooses to allocate low cost asset to a low value pool, he must allocate to the pool all other low cost assets he holds in the current year.

  • Assets pooled should be used in the work as an employee or to gain rental income.

Assets which cannot be included in the low value pool for claiming deductions as per Australia Income Tax Law are as below.

  • Assets in which deductions have been claimed using prime cost method.

  • Assets costing less than $300 where in an immediate deduction of the total amount can be claimed.

  • Horticultural plants are not considered as assets, so cannot be claimed in low value pool deductions

  • A portable electronic device which is primarily in use for employment, if the employer provided it, paid for it or reimbursed it at any cost cannot be claimed in low value pool

Deductions for cost of managing tax affairs in Australia Income Tax:


Australia Citizens and permanent residents of Australia can claim a deduction for expenses incurred for managing the tax affairs. Some of the expenses are:-

  • Cost incurred for preparing and lodging of income tax returns and activity statements.

  • Cost incurred for travelling purposes which is extensible to the travel cost incurred for attending the meetings with the tax consultants.

  • Litigation costs (including cost incurred in the court and administrative costs including tribunal fees, solicitor, barrister and other legal costs.

  • Cost incurred for obtaining a valuation certificate needed for any gift or donation made or any cost on deduction for entering into a conservation covenant.

  • Any interest charge which is imposed by any government body which affiliates in respect of Australia Income Tax.

Apart from the above expenses, Deductions can also be claimed under Australia Income Tax Law for specific expenses relating to preparing and lodging the tax return and activity statements.


Some of these expenses are:-

  • Cost on buying any tax reference material.

  • Expenses incurred on any tax return preparation courses.

  • Expenses incurred for filling the tax return by a registered tax agent.

  • Expenses incurred if any on obtaining a tax return advice from any registered tax agent or a barrister.

  • Cost incurred on dealing with the Australia Taxation office in respect of any tax related matters.

  • Expenses incurred on purchasing any software, which is used by the company for lodging the tax return.

Deductions towards personal Superannuation funds in Australia Income Tax:


Individuals who are permanent residents of Australia or hold an Australia PR visa can claim deductions for their contributions made towards superannuation funds and retirement savings account identified by the Australian Government as per the Australia Income Tax law.


Deductions under the head can only be claimed by individuals who have derived their income from the following listed sources:-

  • Salary and Wages

  • A personal business (for example, people who are self-employed contractors or freelancers)

  • Investments (including interest, dividend, rent and capital gains)

  • Government pensions or allowances

  • Partnership and trust distributions

  • Any foreign source of Income in any nature. E.g. Interest, rent, etc.

As per the provisions of Australia Income Tax Law, the primary conditions which need to be fulfilled in order to claim deductions for contributions towards superannuation funds are:

  • An individual must provide a valid notice of intent to his super fund or retirement saving s bank account in order to claim deductions.

The notice of intent can be served in the following manner to the Australia Income Tax office:-

  • Filling up the claim form provided by the fund management authority

  • By writing to the fund, stating the individuals wish to claim tax deductions for any personal super contributions made towards the superannuation funds or any funds of that nature as recognized by the Australian Government from time to time.

  • The amount which an individual claims as a deduction will be counted in an individual’s concessional contribution cap, which has a maximum limit of $25,000 for all ages.

In case, an individual exceeds the concessional cap, he or she can split the contribution with their spouse and increase the threshold limits.


Deductions for tools and Equipment’s in Australia Income tax:


Permanent residents of Australia or individuals holding an Australia PR visa who are liable to pay Australia Income Tax can claim deductions on the total cost incurred in purchasing tools and equipments and save Australia Income Tax.


Such tools and equipments purchased should directly contribute towards increasing the income capacity of an individual.


Now, there can be a scenario when the tools or equipments purchased are being used for both personal and work purposes. In such cases, the claim amount should be apportioned to the extent of the tools or equipments usage for work related activities.


The deductions for such tools and equipment are which are used for claiming deductions are as follows:-

  • Items which do not cost more than $300 or less, an immediate deduction can be claimed for their cost.

  • Items which cost more than $300, the part of deduction can be claimed for the decline in the value of the asset.

Examples of tools, equipment and assets:

· Calculators

· Computers and software

· Desk, chairs and lamps

· Filing cabinets and bookshelves

· Hand tools or power tools

· Protective items such as hard hats, safety glasses, sunglasses, sunscreens and cosmetics containing sun protection

· Professional libraries

· Safety equipments

· Technical instruments


As per Australia Income Tax law, deductions can also be claimed for the cost of repairing and insuring tools and equipments and also on the interest paid for any amount borrowed on purchase of such tools and equipments.


To know whether you are liable to pay Australia Income Tax click Here

To know about the Australia Income Tax slabs, click Here

To know ways how to save Australia Income Tax click Here

To know about the future Income tax slabs in Australia click Here

To know about international taxation implications for foreign citizens click Here

Recent Posts

See All

Taxable Incomes in Australia

Let us understand, the incomes which are clubbed together for calculating the Gross Total Income (Income before allowing deductions as per the Income Tax law of the Australian Government). We first ne

Australia International Taxation

Australia International Taxation cases changes under various scenarios where permanent residents of Australia or individuals holding Australia PR visa are subjected to Australia Income Tax. Some of th

Offsets and Rebates in Australia Income Tax

Permanent residents of Australia or individuals holding an Australia PR visa can claim deductions for various expenses as notified in the Australian Income Tax law. Apart from the above deductions, th

Lucas Worldwide (Lucas Group)

Location : Gayathri Nest Apartments, Telecom Nagar, Gachibowli, Hyderabad,

India : 500032

 + 91-970-531-1112

 + 91-970-427-2619

  reachus@lucasworldwide.in

© 2015 - 2019 by Lucas Think Team

  • Google+ Social Icon
  • LinkedIn Social Icon