In the past tax year I worked for 3 companies. Got paid pension fund by 2 of those companies with total pension fund being below R20k On the IRP5 from the company that paid outthe Pension fund there's a code 4 which I thought it meant this amount was not taxable( I understand it as meaning this amount will not add on to what I owe SARS). Submitted my tax returns and the SARS assesment has included the pension fund lump sum payment as what I owe SARS. Please advice if this is correct
Please make use of our Lump sum calculator to see the tax you should pay on withdrawal of a lumpsum.
The tax (if applicable) would be withheld on withdrawal from the fund. The fund should issue you with an IR5/IT3A certificate. This certificate will be pulled into your Tax Return and the details reflected, however there will be no additional tax withheld as the correct amount would have already been paid over when you withdrew.
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