You must lodge an Australian tax return for FY 2025-26 if any of the following apply:

• Your taxable income exceeded AUD 18,200 as an Australian tax resident
• You are a non-resident with any Australian-source income (no threshold — first dollar is taxable)
• PAYG tax was withheld from your salary and you want a refund
• You earned investment income — bank interest, dividends, rent, or capital gains
• You worked in Australia on any visa — temporary, permanent, or working holiday
• You have left Australia but earned income here during FY 2025-26
• The ATO sent you a notice to lodge
• You have a HELP/HECS debt — repayment thresholds are income-dependent

If none of these apply — income below $18,200, no tax withheld, no investment income — you may be exempt. But do not simply ignore the ATO. File a “non-lodgement advice” through myGov to formally notify the ATO that you are not required to lodge. Ignoring the requirement when you actually had income is what generates default assessments and penalties.

Before anything else, determine your Australian tax residency status. This is not your visa category. A person on a temporary 482 visa living and working in Sydney is almost certainly an Australian tax resident. A person on a permanent visa who has returned to India and genuinely resettled there may be a non-resident. The ATO looks at facts, not documents.

The ATO’s Four Residency Tests

Resides Test (primary): Are you actually living in Australia? Your physical presence, where your family is, whether you have set up a home, your employment — all considered. This is the test that catches most Indians who assume their temporary visa makes them a non-resident.

Domicile Test: Is Australia your domicile — your permanent home — unless your permanent place of abode is abroad?

183-Day Test: Did you spend 183 or more days in Australia during the year? If yes, you are likely a resident unless your usual home is overseas and you had no intention of taking up residence.

Superannuation Test: Applies only to Commonwealth government employees — rarely relevant for Indian migrants.

Australian Resident Tax Rates

Add: 2% Medicare Levy for most residents. The 16% rate in the second bracket is a Stage 3 tax cut — it replaced the old 19% rate from July 1, 2024. It continues for FY 2025-26. Note also the Low Income Tax Offset (LITO) of up to $700 which reduces tax further for incomes below ~$66,000.

Non-Resident Tax Rates

No Medicare Levy. No tax-free threshold. No LITO. The previous blog version of this article stated the non-resident rate as 32.5% — that is outdated. The Stage 3 tax cuts changed the non-resident rate from 32.5% to 30% effective from July 1, 2024. It remains 30% for FY 2025-26.

Step 1 — Set Up myGov and Link ATO

Go to my.gov.au. Create an account using your email address. Link your ATO record — you will need your Tax File Number (TFN), date of birth, and either your bank account BSB/number or a previous ATO correspondence reference number. Once linked, you can access myTax — the ATO’s free, pre-filled online lodgement tool. Pre-filling becomes available from mid-July once employers finalise their payroll submissions.

Step 2 — Confirm Your TFN

Your Tax File Number is your permanent Australian tax identifier — it stays with you regardless of which employer you work for, which visa you hold, or whether you leave and return. If you have lost it: check your myGov account, a previous Notice of Assessment, or any ATO correspondence. You can also call ATO on 13 28 61 with identity documents ready. Without a TFN, employers are legally required to withhold tax at 47% — the top rate. If this happened, you will see it in your Income Statement and can recover the over-withheld amount through your return.

Step 3 — Gather All Income

Do not rely only on the ATO’s pre-fill — it is a starting point, not a complete picture. You are responsible for declaring all income from all sources. The pre-fill draws from employer Income Statements, some bank interest, managed fund distributions, and government payments. It does not automatically capture: rental income from investment properties, Indian income if you are a resident, ABN income from side work, or income from foreign shares.

Income sources to check and declare:

• Salary and wages — from all Australian employers in FY 2025-26
• Australian bank interest — from every account, including offset accounts
• Dividends — Australian shares (check franking credit entitlements separately)
• Rental income — Australian investment properties, gross rental received
• Capital gains — property, shares, managed funds, crypto sold during the year
• ABN / freelance income — if you did any independent contracting
• Foreign income — Indian rent, NRO/NRE interest, Indian dividends (residents only)

Step 4 — Claim Every Deduction You Are Entitled To

This is where most NRIs leave money behind. The ATO allows deductions for expenses you incurred in earning your assessable income. The key categories:

Work-from-home expenses: If you worked from home during the year, you can claim using the fixed rate method — $0.70 per hour (the current ATO rate for FY 2025-26, updated from the earlier 67c). You need a record of hours worked at home, but not individual receipts for each utility. Alternatively, the actual cost method allows you to claim the actual proportion of home internet, electricity, and phone costs — but requires detailed records and home office area calculations.

Vehicle and travel: Travel between two different work locations (not home to work) is deductible. If you use your car for work purposes, either the cents-per-km method ($0.96/km for FY 2025-26, up to 5,000km) or logbook method applies.

Professional development: Courses, conferences, or training directly related to your current role — fees, textbooks, travel.

Professional memberships: Annual fees for professional bodies relevant to your work (engineers, nurses, accountants, IT professionals).

Tools and equipment: Items costing under $300 can be claimed immediately. Items above $300 are depreciated over their effective life.

Tax agent fees: Last year’s tax agent preparation fee is deductible this year.

Income protection insurance: Premiums for income protection cover held personally (not inside super) are deductible.

Rental property expenses: Interest on investment loan, council rates, strata levies, property management fees, repairs and maintenance, depreciation, insurance, advertising for tenants.

Step 5 — Capital Gains

If you sold any Australian asset during the year — shares, property, managed fund units — you must calculate and declare the capital gain or loss. For assets held more than 12 months by an Australian tax resident, only 50% of the gain is included in assessable income (the CGT discount). Non-residents are generally not entitled to this discount on post-May 2012 disposals. Capital losses from prior years can be carried forward to offset current-year gains — check your prior year return for any unused losses.

Step 6 — Foreign Income (Residents Must Declare Everything)

If you are an Australian tax resident, your Australian tax liability is on your worldwide income. This is one of the biggest surprises for Indians who have recently migrated. Your rental property in Hyderabad, your FD interest in SBI, your Infosys dividend — all of it needs to be declared in the “Foreign income” section of myTax, converted to AUD at the applicable RBA exchange rate.

The relief: the DTAA between India and Australia prevents double taxation. Tax you have already paid in India on that income can be offset against the Australian tax on the same income via the Foreign Income Tax Offset (FITO).

Step 7 — Review, Submit, Save NOA

Before submitting, verify: bank account details for refund, no income source is missing, deduction amounts are supported by records. Submission via myTax is typically processed within 2 weeks. Your Notice of Assessment (NOA) arrives in your myGov inbox — save it. You need it for your Indian ITR, any future loan applications, and as proof of Australian tax compliance.

Example 1 — IT Professional, Melbourne (482 Visa, Tax Resident)

Rahul, 34, works as a software engineer in Melbourne on a 482 visa. FY 2025-26 salary: AUD 1,15,000. He has a rental property in Pune earning ₹4.8 lakh (≈ AUD 8,700). His employer withheld PAYG of AUD 32,600 during the year. He worked from home 3 days per week (approximately 780 hours in the year) and paid $1,200 in professional memberships and software subscriptions for work.

The Indian rental declaration + FITO offset was clean. Rahul used his Australian NOA to file Form 67 in his Indian NRI ITR, claiming Foreign Tax Credit for Australian tax paid on his Australian salary income.

Example 2 — Nurse, Brisbane (PR, Undeclared Indian Property Income)

Priya, a nurse on permanent residency, has a flat in Hyderabad that earns ₹3.6 lakh in rent annually. She had not declared this in her Australian tax returns for two years — she assumed the rent was an “Indian matter” and that Australia would not know. Two years later, her CA in India noticed her AIS had entries for the property.

After consulting a registered tax agent in Australia, she lodged amended returns for both years. The Indian TDS deducted (₹36,000 each year = approximately AUD 650 per year) was claimed as FITO. The net Australian tax owed on the rental income — after the FITO offset — was approximately AUD 600 per year. By self-disclosing before ATO contacted her, the penalty was nil. Had the ATO found it first, the penalty would have been 25–75% of the shortfall — up to $900 on this amount. The lesson was not about the money — it was about the principle of proactive disclosure before you are caught.

Example 3 — Working Holiday Maker, Sydney

Ananya, 26, came to Sydney on a Working Holiday visa (417) and worked for 14 months as a hospitality worker. Total salary: AUD 38,000. Employer withheld tax at 15% (Working Holiday rate) = AUD 5,700.

After departing Australia, Ananya claimed DASP — her accumulated superannuation balance was AUD 5,800. The taxable component was taxed at 65% (Working Holiday rate on DASP) = AUD 3,770 tax, net DASP received: AUD 2,030 deposited to her Indian bank account. Not a fortune — but it was her money, and it would have sat with the super fund indefinitely if she had not claimed.

The Double Tax Agreement between India and Australia (signed 1991, updated 2011) allocates taxing rights between the two countries. As an Australian tax resident, you declare Indian income in Australia and claim the FITO for tax already paid in India. The FITO is capped — it cannot exceed the Australian tax that would be payable on that income. If you paid more tax in India than Australia would have charged, the excess FITO is simply not claimable.

Income Type by DTAA Article

If you also have Indian filing obligations (most NRIs and Indian tax residents who earned Australian income do), the two returns need to be coordinated — not just filed independently.

The correct sequence:

1. Lodge Australian return — receive Notice of Assessment (NOA) within 2–4 weeks of submission
2. Use the NOA to file Form 67 in India — Form 67 is the mandatory mechanism for claiming Foreign Tax Credit in Indian ITR. It must be filed on or before the Indian ITR due date (July 31, 2026 for non-audit)
3. Declare Australian income in your Indian ITR under Schedule FSI (Foreign Source Income) if you are an Indian tax resident
4. Claim DTAA benefit under the applicable article based on income type

If you were on a temporary visa and accumulated superannuation while working in Australia, you can claim this balance as a Departing Australia Superannuation Payment (DASP) after your visa is cancelled or you have permanently departed. You cannot claim while holding a valid Australian visa (other than a bridging visa).

DASP is claimed online at ato.gov.au — TFN, passport, visa details, and super fund account information are required. Processing time is approximately 28 days. If you worked for multiple employers, you may have super balances with different funds — use the ATO’s online super lookup tool to identify all accounts before departing. Unclaimed super balances are eventually transferred to the ATO as unclaimed money — still retrievable but adds delay.

Claiming non-resident status when you are actually a resident:
This results in no tax-free threshold, incorrect PAYG withholding by employers, loss of the CGT 50% discount, and potential ATO audit. If you live in Australia, have a stable home and employment, and your family is here — you are almost certainly a resident. Determine this correctly before lodging.

Not declaring NRE account interest:
NRE interest is tax-free in India. It is not tax-free in Australia for Australian tax residents. The ATO expects you to declare it. There is no Indian TDS to offset, so the full Australian marginal rate applies. Many NRIs discover this years later when the ATO reviews their return and finds unexplained foreign income.

Missing the WFH rate update:
The ATO’s fixed rate for work-from-home expenses was updated from 67 cents to 70 cents per hour for FY 2024-25 onwards. Some older guides still state 67c. If you claimed WFH expenses at 67c/hr for the past year, you may have slightly under-claimed. For FY 2025-26, use the correct $0.70/hr rate.

Not lodging because “you already left Australia”:
Australian income tax obligations do not end at the departure gate. If you earned income in Australia during FY 2025-26, you must lodge — from anywhere in the world. myTax is accessible internationally, or you can appoint an Australian tax agent to lodge on your behalf. Unresolved Australian tax debts can affect future visa applications to Australia.

Filing ITR before receiving the Australian NOA:
The coordination problem described above. If you file Indian ITR in June and cannot yet claim FTC because the NOA has not arrived — note this and file a revised Indian ITR with Form 67 as soon as the NOA is in hand. Do not let the entire FTC opportunity go unclaimed because of a timing issue.
How NRIs Can Claim DTAA Benefit in Indian ITR — Form 67 Guide