Item 10 - Gross interest

Click this link for the Item 10 - Gross interest income information on the ATO website.

Do NOT include at this item or anywhere else in the tax return any interest earned on a First Home Saver Account. The taxpayer does not have to pay tax on this FHSA interest it is non-assessable non-exempt and therefore tax-free.

Use the Interest income worksheet (int) to record the individual transactions and then share some or all of them with a joint account holder. These transactions may be entered in dollars and cents. Tax will total the entries and round them on integration to label L and at the same time integrate any TFN withheld amount to label M. Refer to Interest Income worksheet (int) – individuals.

From the Interest Income worksheet (int) there is a Quick access point to the Interest deductions worksheet (idd).

Alternatively, you may use the Pre-fill report from the Tax Agent's Portal to complete this item. Doing so will avoid the necessity to share this income with another taxpayer as the Pre-fill report contains only the taxpayer's share of that income.

Deductions relating to interest income should be entered at D7 and if they exceed $4,999 should be entered in the Interest and Dividend Schedule (BJ) and lodged with the return.

Label L - Gross Interest

This is the total amount of gross interest received by the taxpayer from Australian sources, such as a bank, credit union, building society, government securities, debentures, notes and deposits or children's accounts, the ATO (early payment interest credit) or any other source in Australia. If the taxpayer had a joint account and quoted a TFN, show their share of the interest here.

For information on the ATO website about non-residents withholding tax click this link Special circumstances and glossary.

Label M - TFN amounts withheld from gross interest

This is the total amount of tax withheld for failure to quote a TFN. If the Interest income worksheet (int) is not used, key the amount to be included in assessable income. Show only the taxpayer's share of jointly held interest bearing accounts. The total amount of tax withheld cannot be more than 50% of the total interest amount.

CCH References

10-470 Interest