Why must I pay tax, I don’t earn enough! Will I get a penalty if I don’t disclose all my income to SARS? These questions are common and usually include other sources of income such as interest from a bank account. If these earnings don’t extend above the tax threshold then why disclose them and pay tax? Unfortunately while you may not have to pay tax on the income, you will certainly have to disclose it to SARS. Let’s assume you earn a salary of R200 000 a year and have R12 500 in the bank. This money earns you about R500 interest per year. You are one of those taxpayers that cannot afford to keep a lot of money in the bank as family expenses are high. That R500 you earned in bank interest would indeed be exempt from tax as it is less than the R22 800 threshold that most individuals are allowed for interest. However you need to disclose this on your tax return. SARS will then determine whether the amount qualifies for exemption or not. Remember to disclose ALL income earned, regardless of whether you think it is too little. Look out for those IT3a/b/c’s and declare the interest, even the tiniest amounts. You don’t want a SARS audit, nor penalties for non-compliance!
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