In this final article in our three-part series of guides, the South African Revenue Service answers your frequently asked questions about filling in your tax return.
In part one, we discussed the income sections of the tax return. In part two, we considered the deductions that are allowable in terms of the Income Tax Act and by which your gross income can be reduced.
Question:
Why must I furnish my bank details?
Answer:
To prevent the possibility of a cheque being stolen or cashed, and for your convenience, SARS can now make electronic payments into your bank account. Unfortunately fraud is more likely to occur in this electronic age. Therefore a decision was taken not to allow bank details to be changed without written confirmation from the taxpayer, supported by an original signature and accompanied by a copy of the taxpayer's ID document. Bank details completed on the income tax return are more reliable.
Question:
Although I am unemployed I have received an income tax return. Do I still have to submit it?
Answer:
Yes. If you have received a return, it must be completed and rendered irrespective of what your income for the tax year was. Please indicate the periods during which you were unemployed in part 4.2.
Question:
Must I fill in anything in the space provided for other reference numbers?
Answer:
Only if you are registered for VAT and PAYE purposes.
Question:
What documentation is required to complete the part dealing with lump sum payments and gratuities?
Answer:
Lump sum payments (code 3902 to 3905)
On resignation or withdrawal from a pension, provident or
retirement annuity fund, an IRP5,stating the amounts to be
reflected under the applicable codes, is issued by that fund (not your employer).
Gratuities (code 3901)
A gratuity is a lump-sum payment you receive from your employer on termination of service. This amount will therefore be reflected on the IRP5 you receive from your employer, next to the code 3901.
The amount of tax deducted by either the fund or the employer will be based on information obtained from SARS by means of a tax directive. The amount so indicated by SARS is not a final assessment and any under- or over-deduction will be addressed on assessment.
Question:
How must the part on foreign dividends be completed?
Answer:
If you received any foreign dividends you should have received an IT3(b) certificate from the institution where your funds are invested. You can elect whether you want to be taxed on the net dividend or not. If you elect to be taxed on the net dividend, the foreign tax credit must be deducted from the taxable dividend. Enter the net amount next to code 4216 in part 4.5 of the return. In this case the foreign tax credit amount must not be filled in on the tax return. If you elect not to be taxed on the net amount, the gross dividend must be declared and the foreign tax credit must be claimed.
Question:
I am a handicapped person. Where do I claim for my medical expenses?
Answer:
In your case the total amount of medical expenses (including contributions to and expenses not recovered from a medical fund) must be filled in next to code 4009 in part 5 of the income tax return.
Question:
Can school fees and contributions to religious societies be deducted?
Answer:
No, only donations made to approved public benefit organisations and funds will be considered.
Question:
Do provident fund contributions influence the amounts allowed for retirement annuity fund contributions?
Answer:
Yes. As in the case of pension fund contributions, the annual aggregate of your monthly provident fund contributions, as reflected on your IRP5, is based on the part of your income which represents retirement funding income. Although provident fund contributions are not regarded as a deduction, only non-retirement funding income will be considered in the calculation of allowable retirement annuity fund contributions.
Question:
I received a travelling allowance for the full year but sold my car during the year and acquired a new one. How do I complete part 12 of the return?
Complete part 12.2 by making use of the spaces provided for vehicle 1 & 2. Adjust the dates of the odometer readings according to the periods that the cars were used. If you kept a logbook, the actual kilometres travelled can be used. If not, the total kilometres indicated for private purposes for both vehicles may not be less than 14 000 kilometres. In this case the total amount of kilometres travelled for business purposes with both vehicles may not exceed 18 000 kilometres.
Question:
What happens to arrear excess contributions after retirement?
Answer:
Any excess contributions not allowed in respect of either pension or retirement annuity fund contributions (that is contributions to pension or retirement annuity funds that exceed the maximum amount allowed in a tax year), will be allowed in the following years at the rate of R1 800 per year until all amounts carried forward have been utilised.