Weekly financial tips by a Personal Financial Adviser
The main reason for SARS allowing these rebates is to inspire South Africans to provide for their retirement and by doing so they can retire without Government assistance.
It is that time of the year again to submit your tax returns. A lot of us fear it as we are not sure what to expect. With decent financial planning and by using the instruments available one can decrease your liability towards SARS and use your hard earned money to your own advantage. One of these instruments is the age old Retirement Annuity. Not only does it enhance your retirement benefits but it reduces the tax you must pay at the close of the financial year.
If you apply the allowed rebates correctly you will be able to claim all your contributions made during any tax year towards a retirement annuity. SARS will grant you the opportunity to claim your contributions towards a retirement annuity on your tax return as long as you keep within the allowed perimeters set.
The current set limits for this tax year are the greater of:
- R 1 750-00 pa or
- R 3 500-00 pa minus your annual pension fund contributions or
- 15% of your gross non retirement funding income
This entails that one can contribute the greatest of the above mentioned towards a retirement annuity per tax cycle and claim your contributions as a rebate against your taxable income from SARS.
The main reason for SARS allowing these rebates is to inspire South Africans to provide for their retirement and by doing so they can retire without Government assistance.
If you need assistance with your tax return, please assure the person assisting you is a registered tax practitioner. People not accredited and registered are not allowed to accept money for services rendered.
Please feel free to contact the writer at 013 235 9586 or 079 974 1737 for the best personal financial advice.
