Page 376 - SAIT Compendium 2016 Volume2

IN 24 (3) Income Tax acT: InTeRPReTaTIon noTes Step 10 – Source of receipts and accruals to which general expenditure is to be
IN 25 (3)
apportioned (based on formula
receipts
000
400
000
000
in step 9)
PBAs (Donations + subsidy + grants) Bookshop
Sale of Christmas cards
Sale of concert tickets
Total receipts and accruals (excluding investment and royalty income) Application of formula (step 9) to bookshop income
_22_7__4_0_0 × _16__9_0_0 = R1 866 2 059 400 1
Total R 1 815 227 4 13
2 059 400
Note: For purposes of this Note, the formula has only been applied to bookshop income, but the formula must be applied to all other sources of receipts and accruals.
Proportionate general expenditure to be deducted from speci c source of receipts and accruals
Speci c source of receipts and accruals
PBAs (Donations + grants + subsidy) Bookshop
Sale of Christmas cards
Sale of concert tickets
Total
Total Allocated receipts expenditure
RR
1 815 000 227 400 4 000 13 000 2 059 400
14 894 1 866 33 107 16 900
Step 11 – Allocation of general (indirect) expenditure between ‘taxable’ and ‘exempt’ portion of bookshop income
Total receipts and accruals from bookshop subject to tax (step 5) Allocated expenditure _____________________________________________ × ________________
Total receipts and accruals from bookshop 1
_10_1__0_6_7 ×_1_8_6_6_=R829227 400 1
Step 12 – Determine taxable income from the bookshop
Total receipts and accruals from bookshop subject to tax (step 5) Less: Direct expenditure determined (step 6)
Less: General (indirect) expenditure determined (step 11)
Taxable income from bookshop
Step 13 – Calculation of total taxable income
Taxable income from the bookshop (step 12)
Taxable income from trust distribution (Royalties) (step 5) Total taxable income
Step 14 – Calculate income tax payable
Taxable income R137 838 at 28% (2012/2013)
Income tax payable
INTERPRETATION NOTE: NO. 25 (Issue 3)
101 067 (21 333) 79 734
(829)
78 905
78 905
58 933
137 838 38 595
DATE: ACT: SECTION: SUBJECT:
Preamble
12 March 2014
INCOME TAX ACT 58 OF 1962
Section 1(1)
Resident: De nition in Relation to a Natural Person Application of the Physical Presence Test in the Year of Death or Insolvency
In this Note unless the context indicates otherwise –
• ‘person’ means a natural person;
• ‘section’ means a section of the Act;
• ‘the Act’ means the Income Tax Act 58 of 1962; and
• any word or expression bears the meaning ascribed to it in the Act.
368 saIT comPendIum oF Tax LegIsLaTIon VoLume 2