Medical scheme tax credits have been increased. These credits apply to premiums that you pay towards a registered medical scheme on behalf of yourself and/or a dependent(s). The main member, as well as the first dependent on the medical scheme, will receive a monthly tax credit of R332 (2020 financial year allowed for R319). All additional dependents will receive a monthly tax credit of R224 (2020 financial year allowed for R215).
Premiums towards pension funds, preservation funds and retirement annuities are now limited to 27,5% of your taxable income; limited to R350 000 per annum. If you contribute the maximum amount of R350 000 and you fall in the highest tax bracket of 45%, you will be eligible to claim a tax benefit of R170 500.
Donations to registered NGO’s can lower your taxable income by as much as 10%. It is imperative to that the NGO provide you with an Article 18A tax certificate once your donation has been made. You can donate up to R100 000 annually, completely tax free – something that comes in very handy when you have a loan account on your trust. Be careful not to donate more than R100 000, as 20% donation tax is payable on amounts larger than R100 000.
You can contribute a maximum of R36 000 annually to a tax-free investment structure to the maximum value of R500 000. A great advantage of this, is that all growth, income and dividends from heads of the investment are exempt from tax. The capital can also be withdrawn without any tax on capital profit.
As the new financial year begins, there are several income tax advantages you should be aware of, and tax services can help you take full advantage of them. Professional tax services ensure you’re informed about deductions, exemptions, and credits that can reduce your taxable income. They can also help with tax-efficient investment strategies, ensuring you make the most of available benefits. By staying proactive and working with tax experts, you can optimize your income tax planning and secure financial savings.
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