Page 22 - P6 Slide Taxation - Lecture Day 7 - Various Topics
P. 22
Deduction in terms of par 6(1)(b) for all other cases:
- TP’s own contributions to a fund not allowed as a deduction against his /her
income ito s 11(k) or s 11(n) (includes PrF contributions); and
- Amount transferred for benefit of person to another fund ito s 37D election
- If lump sum is transferred to any fund to the benefit of the TP of which
he/she is or previously was a member; and
- Unclaimed benefits previously taxed and transferred to a PPF / PrPF; and
- The exempt portion (formula par 2A) transferred to a private fund from a
PSPF (in effect the tax exempt portion before 1 March 1998).
* Above deductions may not create a loss!
* Above deductions may only be deducted if not previously allowed as a
deduction in terms of the Second Schedule.
EXAMPLE:
A pre-retirement lump sum received on withdrawal from a PF is
R39 000, of which R12 000 is transferred to RAF. R20 000 of the
TP’s own contributions to the fund have not previously qualified for
deduction from his income.
Deduction? = R12 000 + R20 000 = R32 000
Gross income inclusion = R7 000 (which is R39 000 less R32 000).
