Summary
Summary Income Tax
- Course
- (ICBINCOMETAXRETURNS)
- Institution
- Damelin (DCC)
Summary of 3 pages for the course at DCC (Summary of notes)
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LIST 4 DEDUCTIONS THAT MAY BE CLAIMED BY INDIVIDUALS WHO EARN ONLY A SALARY INCOME* S11F: PENSION/RETIREMENT/PROVIDENT FUND CONTRIBUTIONS IN TERMS OF S11F
* S18A DONATIONS (LIMITED TO 10% OF THE EMPLOYEES TAXABLE INCOME)
* REFUND OF A PERSONS SALARY/RESTRAINT OF TRADE PAYMENT RECEIVED
* S11( c) LEGAL EXPENSES IN REGARDS TO THE TAXPAPYERS EMPLOYMENT
* S11( e) WEAR AND TEAR ALLOWANCE ON AN ASSET OWNED BY THE TAXPAYER AND USED BY HIM IN HIS EMPLOYMENT
* S11(i) BAD DEBT ALLOWANCE ON SALARY AMOUNTS OWING TO THE TAXPAYER THAT WILL NOT BE SETTLED
* S11(j) DOUBTFUL DEBT ALLOWANCE ON SALARY AMOUNTS OWING TO THE TAXPAYER WHICH MAY NOT BE SETTLED
LIST 4 REQUIREMENTS THAT MUST BE MET FOR A BUSINESS TO QUALIFY AS A MICRO BUSINESS OR DISCUSS THE CRITERIA FOR A BUSINESS TO QUALIFY AS A MICRO BUSINESS
NATURAL PERSON, COMPANIES AND CC'S CAN ALL QUALIFY AS MICRO BUSINESSES PROVIDED THAT ALL THE FOLLOWING CONDITIONS ARE MET:
1) THE QUALIFYING TURNOVER DOES NOT EXCEED R1 MIL
2) IN THE CASE OF COMPANY/CC, ALL SHAREHOLDERS OR MEMBERS MUST BE NATURAL PERSON AND THE FY END MUST BE FEBRUARY
3) NO MORE THAN 20% OF THE COMPANY'S TOTAL RECEIPTS FOR THE YEAR OF ASSESSMENT MAY CONSIST OF INVESTMENT INCOME AND INCOME FROM THE RENDERING OF PROFESSIONAL SERVICE
4) THE NATURAL PERSON/SHAREHOLDERS/MEMBERS MAY NOT AT ANY TIME DURING THE YEAR OF ASSESSEMENT HOLD ANY SHARE OR INTEREST IN THE EQUITY OF ANOTHER COMPANY
5) THE PERSON MAY NOT BE A PERSONAL SERVICE PROVIDER OR A LABOUR BROKER WITHOUT AN EXEMPTION CERTIFICATE
6) THE TOTAL AMOUNT RECEIVED FROM DISPOSAL OF IMMOVABLE PROPERTY AND BUSINESS CAPITAL ASSETS MAY NOT EXCEED R1.5 MIL DURING A 3 YEAR PERIOD
DISCUSS THE DIFFERENCE BETWEEN TAX EVASION AND TAX AVOIDANCE
1) TAX EVASION REFERS TO ILLEGAL ACTIVITIES DELIBERATELY UNDERTAKEN BY A TAXPAYER TO FREE HIMSELF FROM A TAX BURDEN. TAX EVASION COULD INCLUDE OMMISION OF INCOME OR OVERSTATEMENT OF EXPENDITURE ON AN
INDIVIDUALS TAX RETURN. TAX EVASION IS SUBJECT TO SEVER PENALTIES IN TERMS OF S75 & S76 OF THE INCOME TAX ACT.
2) TAX AVOIDANCE GENERALLY INVOLVES A SITUATION IN WHICH A PERSON HAS ARRANGED HIS AFFAIRS IN A PERFECTLY LEGAL MANNER WITHIN THE PARAMETERS OF THE INCOME TAX ACT, WITH THE RESULTS THAT HE HAS REDUCED
HIS INCOME TAX LIABILITY. THERE IS NO OBLIGATION ON THE TAXPAYER TO PAY A GREATER AMOUNT OF TAX THAN IS LEGALLY DUE IN TERMS OF THE ACT. THIS MEANS THAT THE TAXPAYER IS PERMITTED TO DO TAX PLANNING OR
HAVE TAX PLANNING DONE ON HIS BEHALF, AS LONG AS IT COMPLIES WITH THE ACT AND IS ETHICAL FROM TAX PERSPECTIVE.
DISCUSS THE PAYE, SDL AND UIF REMUNERATION ARE CALCULATED DIFFERENTLY FROM EACH OTHER
* SDL REMUNERATION EXCLUDES REMUNERATION OF LEARNERS ON REGISTERED LEARNERSHIPS AS WELL AS REMUNERATION PAID TO INDEPENDENT CONTRACTORS.
* UIF REMUNERATION EXCLUDES REMUNERATION PAID TO EMPLOYEES WHO WORK FOR 24HRS OR LESS PER MONTH AS WELL AS COMMISSION INCOME, HOWEVER, SDL & PAYE REMUNERATION WILL INCLUDE SUCH REMUNERATION
* UIF REMUNERATION WILL ALSO NOT ALLOW A DEDUCTION FOR RETIREMENT CONTRIBUTIONS
* UIF REMUNERATION IS CAPPED AT R17 712 PER MONTH (EMPLOYEE CONTRIBUTES 1% AND EMPLOYER CONTRIBUTES 1%)
* SDL & PAYE REMUNERATION HS NO LIMITS
DISCUSS THE TAX ADVANTAGES THAT A PERSON 65YRS AND OLDER WILL BE ENTITLED TO COMPARED TO SOMEONE UNDER 6R
* AN INDIVIDUAL UNDER THE AGE OF 65 WILL ONLY BE ENTITLED TO A PRIMARY REBATE OF R16425 FOR THE YEAR ENDED 28 FEBRUARY 2023 WHEREAS A PERSON 65 YEAARS AND OLDER WILL ALSO BE ENTITLED TO THE SECONDARY
REBATE OF R9000 (TOTAL REBATE OF R25425)
* INDIVIDUALS UNDER THE AGE OF 65 ARE ONLY ENTITLED TO AN ANNUAL INTEREST EXEMPTION OF R23800 WHEREAS TAXPAYERS 65 YEARS AND OLDER ARE ENTITLED TO A HIGHER EXEMPTION OF R34500.
* TAXPAYERS OLDER THAN 65 ARE ALSO ENTITLED TO TAX CREDIT AT 33.3% OF ALLOWABLE MEDICAL EXPENSES (COMPARED TO 25% UNDER 65) AND UNLIKE YOUNGER TAXPAYERS, THERE IS NO DEDUCTION OF 7.5% OF TAXABLE
INCOME FROM ALLOWABLE EXPENSES PRIOR TO CALCULATING THE ALLOWABLE MEDICAL EXPENSES TAX CREDITS.
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