Exam (elaborations)
Exam (elaborations) TAX3702 - Taxation Of Individuals (TAX3702)
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Indepth calculations on solutions for assignment 5,semester 2,2022.Guaranteed distinction.
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TAX3702 ASSIGNMENT 5PLEASE USE RESOURCES AVAILABLE ON MY UNISA TO PRESENT WORK UNIQUELY
REPERFORM ALL CALCULATIONS AND ADDITIONS
TRY AND EXPAND (OR CUT OUT) ON EXPLANATIONS/DESCRIPTIONS
Calculation of Mohale's normal tax payable for the 2022 year of assessment
Lumpsums
Lumpsum from Kangra 180 000
Lumpsum from Kangra pension fund 1 150 000
Gross income (but taxed separately) 1 330 000
Salary (100 000 x 11)
Pension - Use own narration
Employer medical aid contributins (3 000 x 150% x 11)
Watch: long service award as defined
Long service award as defined (awarded for continous service for 15 years, acquired
specifically to be given to employee therefore costs is used) Use own description
Cash received - excluded from definition of long service award
South African interest (27 900 x 50%)
Deemed low interest loan on housing benefit (375 000 x 4,5% x 275/365 + 375 000 x 4,75%
x 15/365)
Official interest rate is 4,5% from 1 August 2020 to 1 December 2021 and 4,75% from 1
December 2021 to 31 january 2022)
Less amount paid by Mohale (375 000 x 3% x 290/365)
Acquistion of house at less than market value (600 000 - 375 000), because the market
value of the house was greater than the amount stipulated in the rental agreement,
therefore a fringe benefit arises on the date the purchase option is exercised
Gross income
Less: exempt income
Interest exemption (23 800 limited to)
Long service award exemption - limited to R5 000 for first 15 years of exemption
, Travel allowannce (8 000 x 11)
Total km travelled 19 500
Less: private km (10 900)
Business km 8 600
Fixed cost from table = R156 711
Deemed cost per km
Fixed cost per km (156 711/19 500 x 337/365) 7,420
Fuel cost per km (172,4/100) 1,724
Mainetenance cost per km (99,6/100) 0,996
Total deemed cost per km 10,14
Actual cost per km
Wear and tear (665 000/7 x 337/365) 87 712
Fuel cost (19 000 x 10 900/19 500) 10 621
Maintenance cost 14 000
Total actual costs 112 333
Actual cost per km (112 333/19 500 = R5,750)
Deemed cost per km is higher
Business travel (8 600 x 10.14)
Retirement fund contributions
Pension fund contributions (100 000 x 11 x 8%) = R88 000
Limted to the lesser of:
- R350 000 350 000
- Greater of 27,5% of remuneration (1 493 804) 410 796
or taxable income (1 493 804)
- taxable income before this calculation and capital gains 1 493 804
The limit is R350 000 therefore allow contributions in full
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