Page 337 - SAIT Compendium 2016 Volume2

IN 18 (3)
[R56 500 × 25 / 40]
Section 10(1)(i) interest exemption
Income
Less:
Donation to public bene t organisation Section 18A –
Actual donation of R5 000
Limited to 10% of R252 187 = R25 219 Thus the full R5 000 may be deducted. Apportionment of R5 000:
(R187 000/R252 187 × R5 000) = R3 708 (R65 187/R252 187 × R5 000) = R1 292 Taxable income
(b) Calculation of normal tax before rebates
IN 18 (3)
Income Tax acT: InTeRPReTaTIon noTes
34 500
187 000
(3 708)
183 292
Nil
65 187
(1 292)
63 895
34 500
252 187
(5 000)
247 187
R
31 419
18 159,25 49 578,25
R
5 650 2 000 7 650
Normal tax payable: (Rates of tax – 2015 year of assessment)
On R174 550
On R72 637 (247 187 taxable income – 174 550 per tax table) × 25% Total
(c) Sum of foreign taxes which relate to total taxable foreign income
Foreign taxes which relate to gross foreign dividends (Note 1) Withholding tax on foreign interest
Foreign taxes which relate to total taxable foreign income
Note 1: Under paragraph (ii) of the proviso to section 6quat(1A) the amount of foreign taxes attributable to the exempt foreign dividends of R35 313 potentially quali es for the foreign tax rebate under section 6quat(1).
(d) Calculation of the section 6quat rebate Amount of foreign taxes that qualify for the rebate
Limited to
Calculation of the limitation:
Taxable income derived from all foreign sources _______________________________________ × Normal tax
Total taxable income derived from all sources
_R__6_3_8__9_5_ × R49 578,25 R247 187
= R12 815,41
Notes:
R
7 650,00
12 815,41
(1) The amount of the limitation exceeds the sum of qualifying foreign taxes of R7 650 as calculated above. Thus the full amount of qualifying foreign taxes may be deducted from normal tax payable.
(e) Calculation of the section 6A and 6B rebate
Section 6A tax credit
Medical scheme fees tax credit = nil as B did not contribute to a medical aid.
Section 6B tax credit
Additional medical expenses tax credit = [33,3% × (Medical aid contribution as exceeds 3 times the medical scheme fees tax credit)] + (33,3% × qualifying medical expenditure)
Therefore, [33,3% × Rnil] + (33,3% × R38 000) = R12 654
(f) Calculation of the normal tax payable after taking into account rebates
Normal tax before rebates Less: Primary rebate
RR
49 578,25
(12 726)
saIT comPendIum oF Tax LegIsLaTIon VoLume 2
329