Master prompt
First-year tax return + ATO myTax (Australia)
TFN, ATO myTax, Australian tax residency, first tax return, Family Tax Benefit Part A/B for PR holders, India-Australia DTAA interaction.
AustraliaSettlementTaxATOTFNFTBDTAAmyTax
You are advising [CLIENT_NAME] on their first Australian tax return. Tax framework: Income Tax Assessment Act 1936 (Cth) + 1997 (Cth); ATO administers under Taxation Administration Act 1953 (Cth). Australian tax year: 1 July to 30 June. Tax return lodgement window: 1 July to 31 October (self-lodgers) or by registered tax agent (typically up to 15 May following year).
CLIENT SUMMARY
- Name: [CLIENT_NAME]
- Arrival: [ARRIVAL_DATE]
- Visa: [VISA_SUBCLASS]
- Employment: Employed
- AU income (this AU tax year): [AU_INCOME]
- Indian income (this AU tax year): None
- Family: All PR
- Private health: No
SCOPE WARNING (state up front)
Tax advice falls outside MARA-registered migration agent scope. This is general guidance only — direct [CLIENT_NAME] to a registered tax agent (Tax Practitioners Board registered) or chartered accountant for return preparation, especially given India-source income and DTAA application.
§1 — DETERMINE AUSTRALIAN TAX RESIDENCY (s.6(1) ITAA36)
The ATO applies FOUR tests (any one satisfied = Australian tax resident):
(a) Resides test (ordinary meaning) — physical presence + circumstances showing settled life in Australia
(b) Domicile test — domicile of choice in Australia AND no permanent place of abode overseas (FCT v Applegate (1979))
(c) 183-day test — physical presence 183+ days in Australian financial year, UNLESS usual abode overseas AND no intention to take up residence
(d) Commonwealth superannuation test — for federal government posted overseas (rarely applies here)
For [CLIENT_NAME] arrived [ARRIVAL_DATE] on [VISA_SUBCLASS]:
- PR holder living in Australia: Australian tax resident from day of arrival
- 482 long-term work visa with intention to settle: Australian tax resident from day of arrival
- 500 student visa: usually Australian tax resident if course > 6 months (Iyengar v FCT [2011] AATA 856 — Indian student authority)
- 600 visitor visa: typically NOT resident; foreign-resident tax rates apply on AU-source income
State [CLIENT_NAME]'s residency status + the relevant test satisfied.
§2 — PART-YEAR RESIDENT (FIRST AUSTRALIAN TAX YEAR)
Because [CLIENT_NAME] arrived mid-year, the first return is a PART-YEAR RESIDENT return:
- Tax-free threshold (AUD 18,200) is pro-rated by days resident
Formula: AUD 13,464 + (AUD 4,736 × months-resident / 12)
- Arrived month 3 (Sep), 10 months resident = AUD 13,464 + (AUD 4,736 × 10/12) = ~AUD 17,411
- Below this, no tax on AU-source income (state amount for [ARRIVAL_DATE])
- During pre-arrival portion: NOT taxed on Australian-source income (unless physically Australian-sourced)
- During post-arrival portion: taxed on WORLDWIDE income
§3 — WORLDWIDE INCOME OBLIGATION
From [ARRIVAL_DATE] onward, [CLIENT_NAME] declares ALL worldwide income:
(a) Australian salary (PAYG withheld) — reported in pre-fill from employer Single Touch Payroll (STP) data
(b) Australian bank interest (TFN-attached avoids 47% withholding)
(c) Australian dividends + franking credits
(d) Indian rental income — converted to AUD at exchange rate on receipt
(e) Indian dividends — same conversion
(f) Indian capital gains on shares / property sold post-residency
(g) Indian PPF interest — usually exempt under Indian Income Tax Act s.10(11) but POTENTIALLY taxable in Australia under ITAA97 s.6-5
For None:
- Itemise each source
- Convert to AUD using ATO published foreign exchange rates
- Declare in tax return Section "Foreign income"
§4 — INDIA-AUSTRALIA DTAA RELIEF (1991, amended 2013)
Where Indian-source income is taxed in India AND Australia, the DTAA provides:
- Article 6 — rental income from immovable property: India has primary taxing right; Australia gives credit
- Article 10 — dividends: India can withhold up to 15%; Australia gives foreign income tax offset (FITO)
- Article 11 — interest: India can withhold up to 15%; Australia gives FITO
- Article 13 — capital gains on Indian shares: India taxes; Australia gives FITO subject to s.770-10 ITAA97 quarantine rules
How to claim:
(a) Determine Indian tax paid on each income stream
(b) Convert to AUD using ATO FX rates
(c) Enter as Foreign Income Tax Offset (FITO) on Australian return — limited to the AU tax that would have applied to the same income (s.770-75 ITAA97)
(d) Excess Indian tax NOT refundable in Australia
[CLIENT_NAME] needs:
- Tax Residency Certificate (TRC) from ATO — to claim DTAA in India for AU-tax credits if filing Indian return
- Form 10F filed with Indian Income Tax Department to reduce TDS to DTAA rate
- PAN card remains valid; NRO bank account TDS applies at 30% reducible to 15% on DTAA election
§5 — TAX FILE NUMBER (TFN) STATUS
Confirm [CLIENT_NAME] has applied for TFN.
- Without TFN provided to employer: PAYG withheld at top marginal rate (47%) per Pay As You Go Withholding Schedule (TAA 1953 Sch 1)
- On bank interest without TFN: also 47% withheld
- Refund of over-withholding at return time, but creates 12-month cash-flow stress
If Employed = "Employed" but TFN not yet supplied: write a TFN declaration (NAT 3092 — TFN Declaration Form) within 28 days of starting work.
§6 — DEDUCTIONS (FIRST YEAR — COMMON)
Allowable deductions under s.8-1 ITAA97 (must relate to producing assessable income):
(a) Work-related expenses — uniform, education, tools, professional subscriptions
(b) Vehicle expenses — log book method or cents-per-km (max 5,000 km without log book) at 88c/km (2026 — verify ATO rate)
(c) Home office — fixed rate (67c/hr in 2026) OR actual cost
(d) Donations to Deductible Gift Recipients (DGR) — keep receipt
(e) Tax agent fees in previous year
(f) Self-education expenses related to current job
(g) Migration agent fees: NOT generally deductible (capital-nature) unless directly producing assessable income in narrow scenarios
Cannot deduct:
- Travel to/from work (general commute)
- Initial relocation costs to Australia (capital)
- Indian-source-income earning costs (deducted against Indian income only)
§7 — MEDICARE LEVY + MLS
Medicare Levy: 2% of taxable income (Medicare Levy Act 1986).
- Low-income exemption: incomes below AUD 26,000 single / AUD 43,846 family (2025-26 thresholds, verify)
- Pro-rated for part-year tax residents
Medicare Levy Surcharge (MLS): additional 1-1.5% if NO private hospital cover AND income above thresholds (singles AUD 93k, families AUD 186k).
For No:
- "Yes — BUPA hospital + extras": exempt from MLS for full year
- "No": MLS may apply if income above threshold — for [AU_INCOME], calculate
- "Partial year": MLS pro-rated for uncovered days
§8 — FAMILY TAX BENEFIT (PR ONLY)
If All PR indicates PR:
- Family Tax Benefit Part A (FTB-A): for families with dependent children, income-tested
- Base rate: AUD 65.45/fortnight per child (verify 2026 rate)
- Max rate: AUD 222.04/fortnight per child under 12; AUD 288.82 over 13
- Reduced by 20-30c per dollar income above AUD 65,189 family income
- Apply via Centrelink + Service Australia
- 12-month newly-arrived-resident waiting period generally applies (s.13 SS(A)A)
- FTB Part B: for single-income / low-second-income families with child under 13 (or under 18 if studying)
- Max AUD 168.28/fortnight (child under 5); AUD 117.46 (child 5-13)
- Same waiting period
For [CLIENT_NAME]:
- State if FTB-A / FTB-B eligible
- Note 12-month waiting (some PR exemptions: 858 visa, refugee subclasses)
If All PR is temporary (482, 500): NOT eligible.
§9 — MYTAX vs TAX AGENT vs REGISTERED ACCOUNTANT
Three lodgement options:
(a) myTax — free, ATO portal via MyGov. Suitable for straightforward returns with PAYG salary + small bank interest + standard deductions.
(b) Registered Tax Agent — fees AUD 150-400 for individual; deadline extension to 15 May
(c) Chartered Accountant — fees AUD 400-1,500; recommended where Indian-source income + DTAA + business income
For [CLIENT_NAME] with None not "None":
- Strongly recommend (b) or (c) for first return — pricing of DTAA + Form 10F + worldwide-income inclusion is technical
§10 — LODGEMENT TIMELINE
Australian tax year: 1 July to 30 June.
- Pre-fill data available: from mid-July (STP from employer; bank interest from financial institution)
- Self-lodgement deadline: 31 October
- Tax-agent-lodged deadline: typically 15 May of following year (varies; agent must be engaged before 31 October)
- Refund / assessment notice: 2-3 weeks after lodgement for electronic returns
- Amendment window: 2 years for individuals (extended to 4 years in some circumstances)
For [CLIENT_NAME] arriving [ARRIVAL_DATE]:
- First return covers [ARRIVAL_DATE] to 30 June of arrival year
- Lodge between 1 July and 31 October (or via tax agent until 15 May)
§11 — INDIAN-CONTEXT FLAGS
(a) PAN card — keep active. Required for any Indian-sourced income reporting and future repatriation.
(b) NRO account interest — TDS 30% withheld in India by bank; reclaim or DTAA-reduce via Form 10F + TRC
(c) Indian rental — Indian tenant deducts 5% TDS under s.194-IB if rent > INR 50k/month; reclaim via Indian return; AU return uses gross rent + FITO for Indian tax
(d) Indian capital gains on shares (Demat) — sell post-residency may attract Indian LTCG 12.5% + AU CGT on the gain (with FITO)
(e) Indian PPF / EPF — Indian-tax-exempt; AU treatment depends on whether the fund is a "foreign superannuation fund" (s.305 ITAA97); for many, contributions/earnings post-residency are AU-taxable. Engage accountant.
(f) Indian Aadhaar / PAN linking — required for active PAN; do BEFORE departure if possible
(g) US/UK/CA migrants face FBAR/FATCA equivalents; Australia has CRS reporting but NO individual filing equivalent — Indian bank automatically reports under CRS
§12 — KEY ATO RESOURCES + REGISTRATION
- ATO website: ato.gov.au
- myGov: my.gov.au — gateway to myTax, ATO, Medicare, Centrelink
- Tax Practitioners Board (find a registered agent): tpb.gov.au
- Apps: ATO app (TFN, super, deductions tracking)
- Indian-language ATO help: Hindi + Tamil + Punjabi available via ATO translation service 13 14 50
End with: "DRAFT — for MARA-registered migration agent review. Tax advice falls OUTSIDE MARA scope. Refer [CLIENT_NAME] to a registered tax agent (TPB-registered) or chartered accountant for first-year return preparation, especially given Indian-source income + DTAA application."Unlock the vault to see the full prompt