I left my job in August 2015 and want to withdraw a portion of the provident fund in Nov 2015, i. E. In the same tax year as when I worked 6 months (March - August 2015). Am currently unemployed/self employed. What is the best time to withdraw in such a way as to save on tax. In 2015 year or wait for new tax year (Feb, 2016) where income is R0. 00?.
It won't make a difference - this is because you will be taxed as per the special SARS rates for taxing of lump sums. This tax will be reflected in the tax directive issued by SARS and the net amount after tax will be paid to you. These details will be reflected on an IRP5/IT3A and will be automatically be pulled into your Tax Return. The tax on the lumpsum is therefore calculated entirely independently of your other earnings for the year.
Please refer to our Lump sum calculator to check the tax you will pay on your provident withdrawal prior to retirement age.
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