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Tax implication on provident lump sum fund benefit

Posted 19 May 2016 under Tax Questions



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Klaas says:
13 May 2016 at 17:31

I've been unemployed for the past six years. My tax number with SARS has been deregistered. Insurance company requested an IRP3 directive on my behalf from SARS. This was declined as I needed to re-activate my tax number. I'm awaiting for re-activation of my tax number. Presently I'm unemployed, will I be taxed and how much?

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TaxTimTaxTim says:
15 May 2016 at 16:41

How much is the total amount?


Klaas says:
16 May 2016 at 8:31

The expected money is R71 000.00 after the insurance company has taken whatever management fees due. What is not clear, will SARS further deduct tax on this amount or not? Once in receipt of payment do I need to complete any form to disclose payment before SARS?


TaxTimTaxTim says:
19 May 2016 at 8:35

The company will send you an IRP5/IT3a which you will use to submit to SARS. You will pay a small amount of tax - make use of our Lump sum calculator to work out how much. The tax will be withheld before the remaining amount is paid to you.


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