Page 381 - SAIT Compendium 2016 Volume2

IN 26 Income Tax acT: InTeRPReTaTIon noTes IN 26
The Labour Appeal Court is the nal court of appeal in respect of all judgments and orders made by the Labour Court, provided that the matter falls within its exclusive jurisdiction. It is a superior court and has similar authority and powers to those of the supreme court of appeal.
3. The law
3.1 De nition of ‘gross income’ in section 1 of the Income Tax Act
‘ “gross income’’, in relation to any year or period of assessment, means —
(i) in the case of any resident, the total amount, in cash or otherwise, received by or accrued to or in favour of such
resident; or
(ii) in the case of any person other than a resident, the total amount, in cash or otherwise, received by or accrued to
or in favour of such person from a source within or deemed to be within the Republic,
during such year or period of assessment, excluding receipts or accruals of a capital nature, but including, without in any way limiting the scope of this de nition, such amounts (whether of a capital nature or not) so received or accrued as are described hereunder, namely —’
Speci c inclusions of ‘gross income’
3.1.1 Paragraph (c) of ‘gross income’
‘(c) any amount, including any voluntary award, received or accrued in respect of services rendered or to be rendered or any amount (other than an amount referred to in section 8 (1)) received or accrued in respect of or by virtue of any employment or the holding of any of ce: Provided that —
(i) the provisions of this paragraph shall not apply in respect of any bene t or advantage in respect of which the provisions of paragraph (i) apply;
(ii) any amount received by or accrued to or for the bene t of any person in respect of services rendered or to be rendered by any other person shall for the purposes of this de nition be deemed to have been received by or to have accrued to the said other person;
(iii) to (vi) inclusive ...’
3.1.2 Paragraph (d) of ‘gross income’
‘(d) any amount, including any voluntary award, received or accrued in respect of the relinquishment, termination, loss, repudiation, cancellation or variation of any of ce or employment or of any appointment (or right or claim to be appointed) to any of ce or employment: Provided that—
(i) the provisions of this paragraph shall not apply to any lump sum award from any pension fund, provident fund or retirement annuity fund;
(ii) any such amount which becomes payable in consequence of or following upon the death of any person shall be deemed to be an amount which accrued to such person immediately prior to his death;’
3.1.3 Paragraph (f) of ‘gross income’
‘(f) any amount received or accrued in commutation of amounts due under any contract of employment or service;’
3.2 De nition of ‘remuneration’ in the Fourth Schedule to the Income Tax Act
‘ “remuneration’’ means any amount of income which is paid or is payable to any person by way of any salary, leave pay, wage, overtime pay, bonus, gratuity, commission, fee, emolument, pension, superannuation allowance, retiring allowance or stipend, whether in cash or otherwise and whether or not in respect of services rendered, including— (a) any amount referred to in paragraph (a), (c), (cA), (d), (e), (eA) or (f) of the de nition of ‘gross income’ in
section 1 of this Act; ...’
4. Application of the law
CCMA and Labour Court awards will be taxed either under the general de nition of ‘gross income’ in section 1 of the Income Tax Act or they may be speci cally included under paragraph (d), paragraph (f) or, if applicable, paragraph (c) of this de nition.
4.1 Types of CCMA and Labour Court awards made to employees and former employees
The three broad categories into which CCMA and Labour Court awards fall, are as follows:
4.1.1 Unfair Dismissals
This mechanism is available to protect the employee against dismissal, without substantive grounds, in a procedurally unfair manner. The various elements of dismissal are categorised into substantive fairness, automatically unfair dismissals, procedural fairness and misconduct (justi cation for dismissal must be proven by the employer). Examples of reasons for unfair dismissal are as follows:
• participation in trade union activities or strike action; • incompetence and incompatibility;
• marital status;
• pregnancy;
• family responsibilities;
• absence from work during maternity leave, illness or injury;
• dismissal of an employee who is HIV positive;
• incapacity or disability;
• race, colour, gender, sexual harassment, nationality, age, politics; • selective dismissal and re-employment of employees;
• religion; and
• military service.
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