Statute Details
- Title: Income Tax (Exemptions from Notification under Sections 10J(5) and 32A(4)) Rules 2022
- Act Code: ITA1947-S248-2022
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act 1947 (power conferred by section 7(1))
- Enacting Formula / Ministerial Authority: Made by the Minister for Finance
- Deemed Commencement: 16 November 2021
- Made Date: 28 March 2022
- Current Version: Current version as at 27 Mar 2026 (per the legislation portal status)
- Key Provisions:
- Rule 1: Citation and commencement
- Rule 2: Exemption of an individual from sections 10J(5) and 32A(4) of the Income Tax Act 1947
- Rule 3: Section 10J(5) does not apply to certain donations (perishable trading stock)
- Relevant Parent Provisions: Income Tax Act 1947, sections 10J(5) and 32A(4)
What Is This Legislation About?
The Income Tax (Exemptions from Notification under Sections 10J(5) and 32A(4)) Rules 2022 is a short set of subsidiary legislation that creates targeted exemptions from notification requirements found in the Income Tax Act 1947. In practical terms, it reduces administrative burdens for certain taxpayers by carving out specific situations where the statutory notification obligations do not apply.
Although the Rules are brief, they are legally significant because they modify how the Income Tax Act operates in relation to (i) individuals and (ii) donations of certain types of property—specifically, perishable trading stock. The Rules do not overhaul the tax system; instead, they adjust compliance obligations tied to particular statutory mechanisms in the parent Act.
For practitioners, the key takeaway is that the Rules provide relief from notification requirements under sections 10J(5) and 32A(4) of the Income Tax Act 1947 for individuals, and further narrow the scope of section 10J(5) by excluding donations of perishable trading stock from its operation.
What Are the Key Provisions?
Rule 1 (Citation and commencement) sets the formal identity of the instrument and its effective date. The Rules are cited as the “Income Tax (Exemptions from Notification under Sections 10J(5) and 32A(4)) Rules 2022” and are deemed to have come into operation on 16 November 2021. This “deemed” commencement matters for compliance and dispute timelines: taxpayers and advisers must treat the exemption as applying from that earlier date, even though the Rules were made later (28 March 2022).
Rule 2 (Exemption of individual from sections 10J(5) and 32A(4) of Act) is the core exemption. It provides that a person who is an individual is exempt from sections 10J(5) and 32A(4) of the Income Tax Act 1947. In plain language, if the notification obligations in those provisions would otherwise apply to a taxpayer who is an individual, the Rules remove that obligation entirely.
From a legal drafting perspective, this is a categorical exemption. It is not limited by type of income, amount, or transaction. The trigger is simply the taxpayer’s status as an “individual”. Accordingly, advisers should consider whether the relevant notification requirements in sections 10J(5) and 32A(4) are aimed at certain tax treatments or reporting events. Once the taxpayer is an individual, the notification requirement is switched off by operation of Rule 2.
Rule 3 (Section 10J(5) does not apply to certain donations) provides a further, transaction-specific carve-out. It states that section 10J(5) of the Act does not apply in a case where a person appropriates by way of a donation any trading stock that is perishable.
This provision is best understood as narrowing the scope of section 10J(5) in the context of donations. The language “appropriates by way of a donation” indicates a transfer or application of trading stock for charitable or other donation purposes, rather than a sale. The key qualifier is that the trading stock must be perishable. Therefore, even if section 10J(5) would ordinarily impose a notification requirement (or otherwise apply) to donations of trading stock, Rule 3 prevents section 10J(5) from applying when the donated stock is perishable.
For practitioners, the practical compliance question becomes: what counts as “perishable” trading stock? The Rules themselves do not define the term in the extract provided. In practice, “perishable” would typically be understood as goods that have a limited shelf life and are subject to spoilage or deterioration (for example, food items). Advisers should document the nature of the goods, their shelf-life characteristics, and any relevant product specifications or expiry information to support the classification.
It is also important to note the internal cross-reference: Rule 3 only addresses section 10J(5), not section 32A(4). Thus, while individuals are exempt from both sections under Rule 2, the donation-specific carve-out under Rule 3 is limited to section 10J(5). If a fact pattern engages both provisions, the analysis should be structured to apply Rule 2 first (if the taxpayer is an individual) and then consider whether Rule 3’s donation carve-out is relevant for section 10J(5).
How Is This Legislation Structured?
The Rules are structured as a short instrument with three rules:
Rule 1 covers citation and commencement (including the deemed operational date).
Rule 2 provides a general exemption for individuals from the notification requirements in sections 10J(5) and 32A(4) of the Income Tax Act 1947.
Rule 3 provides a narrower exemption from section 10J(5) where the relevant transaction involves donating perishable trading stock.
There are no schedules, forms, or procedural steps in the extract. The instrument is therefore primarily substantive—creating legal exemptions rather than prescribing administrative processes.
Who Does This Legislation Apply To?
Rule 2 applies to persons who are individuals. This includes natural persons (as opposed to companies, partnerships, or other entities). If an individual would otherwise be subject to notification obligations under sections 10J(5) and 32A(4), the Rules remove those obligations.
Rule 3 applies to “a person” (not limited to individuals) in the specific scenario where the person appropriates trading stock by way of donation and the trading stock is perishable. In other words, Rule 3 is transaction-based rather than taxpayer-type-based. It can therefore benefit corporate taxpayers and other non-individual persons, provided the donation involves perishable trading stock and the relevant statutory provision is section 10J(5).
Practitioners should also consider whether the parent provisions (sections 10J(5) and 32A(4)) impose notification obligations as a condition for a tax treatment (for example, deductions or exemptions). The Rules do not change the underlying tax treatment; they change whether notification is required in the specified circumstances.
Why Is This Legislation Important?
Although the Rules are concise, they can materially affect tax compliance workflows. Notification requirements are often operationally burdensome: they may require timely filings, internal approvals, and evidence gathering. By exempting individuals from sections 10J(5) and 32A(4), the Rules reduce the risk of inadvertent non-compliance for individual taxpayers and simplify advisory guidance.
Rule 3 is particularly relevant for businesses and organisations that donate goods. Donations of trading stock can be time-sensitive, especially where goods are perishable. A notification requirement that applies rigidly to all donations could create practical barriers—particularly where goods must be donated quickly to avoid spoilage. By excluding perishable trading stock donations from section 10J(5), the Rules support donation practices that align with the realities of supply chains and expiry timelines.
From an enforcement and dispute perspective, the exemptions can also affect penalty exposure and the interpretation of statutory compliance. If a taxpayer failed to notify under section 10J(5) or 32A(4), the availability of these Rules may provide a defence or a basis to argue that the notification obligation never arose. The deemed commencement date (16 November 2021) further means that taxpayers may be able to rely on the exemptions for events occurring from that date, subject to the facts and the applicability of the parent provisions.
For legal practitioners, the most useful approach is to treat these Rules as a targeted compliance modifier. When advising on donations of trading stock or on reporting obligations under the Income Tax Act, counsel should check whether the taxpayer is an individual (Rule 2) and whether the donated trading stock is perishable (Rule 3). This can determine whether notification is required, and therefore whether internal compliance steps must be taken.
Related Legislation
- Income Tax Act 1947 (especially sections 10J(5) and 32A(4))
- Income Tax Act 1947 (general provisions on tax administration and exemptions/deductions relevant to the notification framework)
Source Documents
This article provides an overview of the Income Tax (Exemptions from Notification under Sections 10J(5) and 32A(4)) Rules 2022 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.