Commentary on Sections Overview Section 248: The rule against deduction for untaxable payments
506.This section sets out the rule against deduction for untaxable payments referred to in section 243. It is based on section 25(11) to (13) of F(No 2)A 2005.
507.Subsection (1) states that the rule is that “the total deduction amount” must be reduced.
508.Subsection (2) defines “the total deduction amount”.
509.If the payee is not liable to tax at all in respect of the payment or payments under review, subsection (3) reduces the total deduction amount to nil.
510.Subsections (4) and (5) deal with the case in which the payee is liable to tax in respect of part, but not all, of the payment or payments under review.