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How should I incorporate a charitable donation in my tax calculation?

Posted 26 January 2016 under Tax Q&A


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Nick51 says:
25 January 2016 at 17:07

According to SARS, "Deductions in respect of donations to certain public benefit organisations are limited to 10% of taxable income (excluding retirement fund lump sums and severance benefits)". Assuming that my taxable income is R100,000, I can donate a maximum of R10,000 to a qualifying 'public benefit organisation'. In my tax calculation, should I deduct that R10,000 from my taxable income, or from the amount of tax that I owe? If I can deduct it from the amount of tax due to SARS, the latter options seems too good to be true.

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TaxTim TaxTim says:
26 January 2016 at 11:49

In your tax return, you would tick yes to the question which asks if you donated to a Public Benefit Organisation (PBO). You would then fill in the amount and give details of the PBO in the relevant section of the tax return.

In your calculation you would deduct R10,000 from your taxable income (and not unfortunately from your tax due).

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Nick51 says:
26 January 2016 at 11:53

Thanks again :)

TaxTim TaxTim says:
26 January 2016 at 11:57

Only a pleasure!


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