Page 60 - SAIT Compendium 2016 Volume1

s 5 INCOME TAX ACT 58 OF 1962 s 6
(10) Where any taxpayer’s income includes any special remuneration, or where the provisions of paragraph 15 (3), 17 or 19 (1) of the First Schedule are applicable in the case of the taxpayer in respect of any year of assessment, the normal tax (excluding tax on any lump sum bene t or severance bene t) payable by the taxpayer in respect of such year (as determined before the deduction of any rebate) shall be determined in accordance with the formula—
A
Y = ( ) × B B+ D – C
in which formula—
(a) ‘Y’ represents the amount of normal tax to be
determined;
(b) ‘A’ represents the amount of normal tax (as determined
before the deduction of any rebate) calculated at the full rate of tax chargeable for the said year in respect of taxable income equal to the amount represented by the expression ‘B + D – C’ in the formula;
(c) ‘B’ represents the taxpayer’s taxable income (excluding any lump sum bene t) for the said year;
(d) ‘C’ represents an amount equal to the sum of—
(i) the amount of any special remuneration (as de ned in subsection (9)) which is included in
the taxpayer’s income for the said year;
(ii) where the provisions of paragraph 15 (3) of the First Schedule are in the case of the taxpayer applicable in respect of the said year, an amount determined in accordance with those provisions as being the amount, if any, by which the taxable income derived by the taxpayer during the said year from the disposal of plantations and forest produce exceeds the annual average taxable income derived by the taxpayer from that source over the three years of assessment immediately
preceding the said year;
(iii) where the provisions of paragraph 17 of the First
Schedule are in the case of the taxpayer applicable in respect of the said year, an amount equal to so much of the taxable income of the taxpayer for such year as has been derived from the disposal of sugar cane as a result of re in the taxpayer’s cane elds and but for such re would not have been derived by the taxpayer in that year; and
(iv) where the provisions of subparagraph (1) of paragraph 19 of the First Schedule are in the case of the taxpayer applicable in respect of the said year, the amount by which the taxpayer’s taxable income derived from farming for that year exceeds the taxpayer’s average taxable income from farming as determined in relation to that year in accordance with subparagraph (2) of the said paragraph; and
(e) ‘D’ represents an amount equal to so much of any current contribution to a pension fund, provident fund or retirement annuity fund as is allowable as a deduction in terms of section 11 (k) solely by reason of the inclusion in the taxpayer’s income of any
amount contemplated in paragraph (d) (i), (ii), (iii) or
(iv):
[Para. (e) substituted by s. 5 (1) of Act 31 of 2013 – date of commencement: 1 March 2015*; the substituted paragraph applies iro contributions made on or after that date.]
Provided that in no case shall the amount of normal tax so payable be less than the amount of normal tax which would be chargeable at the relevant rate xed in terms of subsection (2) in respect of the rst rand of taxable income, and nothing in this section contained shall be construed as relieving any person from liability for taxation under this Act upon any portion of that person’s taxable income. [Sub-s. (10) added by s. 5 (c) of Act 88 of 1971, amended by s. 5 (b) of Act 90 of 1972, by s. 5 (1) (b) and (c) of Act 65 of 1973 and by s. 5 (d) of Act 103 of 1976, substituted by s. 3 (c) of Act 104 of 1980 and amended by s. 4 (a) and (b) of Act 96 of 1981, by s. 4 of Act 91 of 1982, by s. 3 (b), (c) and (d) of Act 94 of 1983, by s. 3 of Act 121 of 1984, by s. 3 of Act 65 of 1986, by s. 3 (b) of Act 129 of 1991, by s. 5 of Act 21 of 1994, by s. 4 of Act 21 of 1995, by s. 7 (1) of Act 5 of 2001, by s. 5 (1) of Act 19 of 2001, by s. 6 of Act 35 of 2007, by s. 3 of Act 3 of 2008, by s. 6 (1) of Act 60 of 2008 and by s. 8 of Act 17 of 2009, substituted by s. 7 (1) (b) of Act 7 of 2010 and amended by s. 8 (1) (a)† and (b)‡ of Act 24 of 2011.]
[S. 5 substituted by s. 2 of Act 6 of 1963.]
[S. 5A inserted by s. 6 of Act 88 of 1971, amended by s. 5 (1) of Act 85 of 1974, by s. 5 of Act 69 of 1975, by s. 6 of Act 103 of 1976, by s. 6 of Act 113 of 1977 and by s. 5 of Act 104 of 1979 and repealed by s. 4 of Act 104 of 1980.]
6 Normal tax rebates
(1) In determining the normal tax payable by any natural person, other than normal tax in respect of any retirement fund lump sum bene t, retirement fund lump sum withdrawal bene t or severance bene t, there shall be deducted an amount equal to the sum of the amounts allowed to the natural person by way of rebates under subsection (2).
[Sub-s. (1) substituted by s. 4 (a) of Act 90 of 1988, by s. 4 (1) (a) of Act 70 of 1989, by s. 4 (a) of Act 129 of 1991, by s. 5 (a) of Act 21 of 1995, by s. 5 of Act 8 of 2007, by s. 7 (1) of Act 60 of 2008, by s. 9 (1) (a) of Act 24 of 2011 (date of commencement deemed to have been 1 March 2011; the substitution applies iro years of assessment commencing on or after that date) and by s. 4 (1) (a) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 March 2016; the substitution applies iro years of assessment commencing on or after that date.]
Prelex
Wording of para. (e) in force until 1 March 2015
(e) ‘D’ represents an amount equal to so much of any
current contribution to a retirement annuity fund as is allowable as a deduction in terms of section 11 (n) (i) (aa) (A) solely by reason of the inclusion in the taxpayer’s income of any amount contemplated in paragraph (d) (i), (ii), (iii) or (iv):
* Although ‘1 March 2015’ was replaced by ‘1 March 2016’ by s. 120 (1) of Act 43 of 2014 and the substitution of para. (e) was therefore indicated as ‘pendlex’ text in the 2015 Compendium, the said s. 120 has been repealed by s. 156 (1) of Taxation Laws Amendment Act, 2015 (retrospectively), which, it is submitted, implies that the substitution must in fact be deemed to have come into operation on 1 March 2015.
† Para. (a) is deemed to have come into operation as from the commencement of years of assessment ending on or after 1 January 2010. Para. (b) further amended sub-s. (10) – see next footnote iro date of commencement of para. (b).
‡ Para. (b) is deemed to have come into operation on 1 March 2011 and applies in respect of amounts received or accrued on or after that date.
5A . . .
52 SAIT CompendIum oF TAx LegISLATIon VoLume 1