Section 63 — Income Tax Assessment Act 1936: Bad debts

Where a debt in respect of the whole or a part of a payment that has, or will, become liable to be made under a qualifying security within the meaning of Division 16E is written off as a bad debt by a taxpayer during a year of income, then, for the purposes of paragraph 25-35(1)(a) of the Income Tax Assessment Act 1997, there is taken to have been included in the taxpayer’s assessable income of a year of income so much of the debt as equals the amount (if any) ascertained in accordance with the formula A – B, where: A is the amount (if any) or the sum of the amounts (if any) included in the assessable income of the taxpayer of any year or years of income under section 159GQ that is or are attributable to the payment or to the part of the payment, as the case requires; and B is the amount (if any) or the sum of the amounts (if any) allowable as a deduction or deductions from the assessable income of the taxpayer of any year or years of income under section 159GQ that is or are attributable to the payment or to the part of the payment, as the case requires.