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I have a Q about retirement annuity deductions against tax?

Posted 12 November 2012 under Tax Questions



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How does the Chief Thief calculate my deductable amount on 'current year' RA payments (code 4006)? I entered an amount on my tax form and they calculate a LARGER amount, how is this possible?

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TaxTimTaxTim says:
8 November 2012 at 17:51

Can we please use the "chief thief?"!

The RAF deduction is calculated at the value limited to the greater of R3 500 or 15% of non-retirement-funding-employment income which is basically all income earned that doesn't go towards a Pension in non-tax terms.

Do you contribute towards a Pension Fund?

If you wish to send me your amounts I can calculate this for you?


Zane says:
8 November 2012 at 18:24

Hi again,

My pension fund is R19 012 paid by company for the year.
My medical aid payment through company: R10388 for the year
GNRFI: R58 602 + R103 025 interest received = R161 627
I contributed R37 500 previous tax year to the RA, only R1 800 allowed as deduction?
I contributed R18 000 this year, but somehow the calculation on SARS' site reflected R20 463?

Any help would be much appreciated!

Thanks


Zane says:
8 November 2012 at 18:30

Sorry for the error:

It's a provident fund, not a pension fund I quoted on!

Thanks again


TaxTimTaxTim says:
9 November 2012 at 6:06

A provident fund contribution is not tax deductible unfortunately. For the RAF deduction from previous years, SARS allows a maximum of R1 800 to be carried forward each year so that's why your assessment will say "c/f from previous year - R1 800"

There seems to be an amount of R663 over the contributed amount if you take the the R1 800 into account. Do you want to send your ITA34 to tim@taxtim.com and we can have a look?


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