Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) Compare:
(a) the amount (the income tax you would pay at the comparison rate ) worked out using the formula:
(b) the amount of income tax that you would pay on your * basic taxable income for the * current year at * basic rates.
Note: You must disregard some provisions of this Act in working out amounts of income tax for the purposes of this subsection: see subsection (5).
(2) You are entitled to a * tax offset equal to the * averaging adjustment worked out under Subdivision 392 - C if the income tax you would pay at the comparison rate is less than the amount of income tax you would pay at * basic rates.
Extra income tax
(3) You must pay extra income tax on the * averaging component of your * basic taxable income if the income tax you would pay at the comparison rate is more than the amount of income tax you would pay at * basic rates.
Note 1: Section 12A of the Income Tax Rates Act 1986 sets the rate at which you must pay extra income tax on the averaging component of your basic taxable income.
Note 2: It does so in such a way that, generally, the extra income tax you must pay equals the averaging adjustment worked out under Subdivision 392 - C.
Meaning of basic rates
(4) The basic rates at which you would pay income tax are:
(a) if you are a resident taxpayer as defined in the Income Tax Rates Act 1986 --the rates of income tax in paragraph (1)(b) of Part I of Schedule 7 to that Act, taking into account the way it would apply with any changes to your tax - free threshold under section 20 of that Act; or
(b) if you are a non - resident taxpayer as defined in the Income Tax Rates Act 1986 --the rates of income tax in paragraph 1(b) of Part II of Schedule 7 to that Act.
Disregard certain provisions in working out amounts
(5) Work out the amount of income tax mentioned in paragraph (1)(b) as if:
(a) the following provisions did not apply:
(i) this Division;
(ii) section 94 (Partner not having control and disposal of share in partnership income) of the Income Tax Assessment Act 1936 ;
(iii) Division 6AA (Income of certain children) of Part III of the Income Tax Assessment Act 1936 ;
(iv) Part VIIB (Medicare levy) of the Income Tax Assessment Act 1936 ; and
(b) you were not entitled to any rebate or credit under the Income Tax Assessment Act 1936 or to any * tax offset under this Act.
No adjustment
(6) This Division does not affect your income tax for the * current year if the income tax you would pay at the * comparison rate equals the amount of income tax you would pay at * basic rates.
Note: The 2 amounts will be equal if: