INCOME TAX ACT NO. 58 OF 1962
“gross income”, in relation to any year or period of assessment, means—
(i) in the case of any resident, the total amount, in cash or otherwise, received by or accrued to or in favour
of such resident; or
(ii) in the case of any person other than a resident, the total amount, in cash or otherwise, received by or
accrued to or in favour of such person from a source within the Republic,
during such year or period of assessment, excluding receipts or accruals of a capital nature, but including,
without in any way limiting the scope of this definition, such amounts (whether of a capital nature or not) so
received or accrued as are described hereunder, namely—
(a) any amount received or accrued by way of an annuity, including any amount contemplated in the definition
of “living annuity” or the definition of “annuity amount” in section 10A (1), other than an amount
contemplated in paragraph (d) (ii);
(b) any amount payable to the taxpayer—
(i) by the spouse or former spouse of that taxpayer, under any judicial order or written agreement of
separation or under any order of divorce, by way of alimony or allowance or maintenance of the
taxpayer; or
(ii) in terms of any maintenance order for the maintenance of a child as contemplated in section
15 (1) of the Maintenance Act, 1998 (Act No. 99 of 1998);
(c) any amount, including any voluntary award, received or accrued in respect of services rendered or to be
rendered or any amount (other than an amount referred to in section 8 (1), 8B or 8C) received or accrued in
respect of any employment or the holding of any office: Provided that—
(i) the provisions of this paragraph shall not apply in respect of any benefit or advantage in respect of
which the provisions of paragraph (i) apply;
(ii) any amount received by or accrued to or for the benefit of any person in respect of services
rendered or to be rendered by any other person shall for the purposes of this definition be deemed
to have been received by or to have accrued to the said other person;
(iii) the provisions of this paragraph shall not apply in respect of any amount received by or accrued to
or for the benefit of any person in respect of long service as defined in paragraph 5 (4) of
the Seventh Schedule, to the extent that the aggregate value of an amount determined under this
paragraph together with all amounts determined under paragraphs
5 (2) (b), 6 (4) (d) and 10 (2) (e) of the Seventh Schedule do not exceed R5 000;
(cA) any amount received by or accrued to any person who—
(ii) is or was a labour broker as defined in the Fourth Schedule (other than a labour broker in respect
of which a certificate of exemption has been issued in terms of that Schedule);
(iii) is or was a personal service provider as defined in the Fourth Schedule; or
(iv) was a personal service company or personal service trust as defined in the Fourth Schedule prior
to section 66 of the Revenue Laws Amendment Act, 2008, coming into operation
as consideration for any restraint of trade imposed on such person;
(cB) any amount received by or accrued to any natural person as consideration for any restraint of trade
imposed on that person in respect or by virtue of—
(i) employment or the holding of any office; or
(ii) any past or future employment or the holding of an office;
(d) any amount (other than an amount contemplated in paragraph (a)), including any voluntary award,
received or accrued—
(i) in respect of the relinquishment, termination, loss, repudiation, cancellation or variation of
any office or employment or of any appointment (or right or claim to be appointed) to any
office or employment;
, (ii) by or to a person, or dependant or nominee of the person, directly or indirectly in respect of
proceeds from a policy of insurance where the person is or was an employee or director of
the policyholder; or
(iii) by or to a person, or dependant or nominee of the person, in respect of any policy of
insurance (other than a risk policy with no cash value or surrender value) that has been
ceded to—
(aa) the person;
(bb) a dependant or nominee of the person; or
for the benefit of the person, or dependant or nominee of the person, by—
(A) the employer or former employer of the person; or
(B) the company of which the person is or was a director:
Provided that—
(aa) the provisions of subparagraphs (i) and (ii) shall not apply to any lump sum award from any
pension fund, pension preservation fund, provident fund, provident preservation fund or
retirement annuity fund;
(bb) any such amount which becomes payable in consequence of or following upon the death of
any person shall be deemed to be an amount which accrued to such person immediately
prior to his or her death;
(cc) for the purposes of subparagraphs (ii) and (iii), any amount received by or accrued to a
dependant or nominee of a person shall be deemed to be received by or to accrue to that
person;
(gA) any amount received or accrued from another person as consideration for the imparting of or the
undertaking to impart any scientific, technical, industrial or commercial knowledge or information,
or for the rendering of or the undertaking to render any assistance or service in connection with the
application or utilization of such knowledge or information;
(i) the cash equivalent, as determined under the provisions of the Seventh Schedule, of the value
during the year of assessment of any benefit or advantage granted in respect of employment or to
the holder of any office, being a taxable benefit as defined in the said Schedule, and any amount
required to be included in the taxpayer’s income under section 8A;
(jA) any amount received by or accrued to any person during the year of assessment in respect of the
disposal of any asset manufactured, produced, constructed or assembled by that person, which is
similar to any other asset manufactured, produced, constructed or assembled by that person for
purposes of manufacture, sale or exchange by that person or on that person’s behalf;
(k) any amount received or accrued by way of a dividend or a foreign dividend;
(m) any amount received or accrued in respect of a policy of insurance of which the taxpayer is the
policyholder, where the policy relates to the death, disablement or illness of an employee or
director (or former employee or director) of the taxpayer, including by way of any debt: Provided
that any amount so received or accrued shall be reduced by the amount of any such debt which is
or has been included in the taxpayer’s gross income;
(n) any amount which in terms of any other provision of this Act is specifically required to be included
in the taxpayer’s income and that amount must for the purposes of this paragraph be deemed to
have been received by or to have accrued to the taxpayer:
Provided that where during any year of assessment a person has become entitled to any amount which is
payable on a date or dates falling after the last day of such year, that amount shall be deemed to have accrued
to the person during such year;
“resident” means any—
(a) natural person who is—
(i) ordinarily resident in the Republic; or
(ii) not at any time during the relevant year of assessment ordinarily resident in the Republic, if that person
was physically present in the Republic—
, (aa) for a period or periods exceeding 91 days in aggregate during the relevant year of assessment, as well
as for a period or periods exceeding 91 days in aggregate during each of the five years of assessment
preceding such year of assessment; and
(bb) for a period or periods exceeding 915 days in aggregate during those five preceding years of
assessment,
in which case that person will be a resident with effect from the first day of that relevant year of
assessment: Provided that—
(A) a day shall include a part of a day, but shall not include any day that a person is in transit
through the Republic between two places outside the Republic and that person does not formally
enter the Republic through a “port of entry” as contemplated in section 9 (1) of the Immigration
Act, 2002 (Act No. 13 of 2002), or at any other place as may be permitted by the Director
General of the Department of Home Affairs or the Minister of Home Affairs in terms of that Act;
and
(B) where a person who is a resident in terms of this subparagraph is physically outside the Republic
for a continuous period of at least 330 full days immediately after the day on which such person
ceases to be physically present in the Republic, such person shall be deemed not to have been a
resident from the day on which such person so ceased to be physically present in the Republic; or
(b) person (other than a natural person) which is incorporated, established or formed in the Republic or which has
its place of effective management in the Republic, but does not include any person who is deemed to be
exclusively a resident of another country for purposes of the application of any agreement entered into
between the governments of the Republic and that other country for the avoidance of double taxation:
Provided that where any person that is a resident ceases to be a resident during a year of assessment, that
person must be regarded as not being a resident from the day on which that person ceases to be a resident:
Provided further that in determining whether a person that is a foreign investment entity has its place of
effective management in the Republic, no regard must be had to any activity that—
(a) constitutes—
(i) a financial service as defined in section 1 of the Financial Advisory and Intermediary Services Act, 2002
(Act No. 37 of 2002); or
(ii) any service that is incidental to a financial service contemplated in subparagraph (i) where the
incidental service is in respect of a financial product that is exempted from the provisions of that Act, as
contemplated in section 1 (2) of that Act; and
(b) is carried on by a financial service provider as defined in section 1 of the Financial Advisory and
Intermediary Services Act, 2002 (Act No. 37 of 2002), in terms of a licence issued to that financial service
provider under section 8 of that Act;
6. Normal tax rebates.—(1) In determining the normal tax payable by any natural person, other than normal
tax in respect of any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit or
severance benefit, there must be deducted an amount equal to the sum of the amounts allowed to the natural
person by way of rebates under subsection (2).
https://www-mylexisnexis-co-
za.ezproxy.uct.ac.za/Library/IframeContent.aspx?dpath=zb/jilc/kilc/alrg/ulrg/0ds6c/4j9if&ismultiview
=False&caAu=(2) In the case of a natural person there shall, subject to the provisions of subsection (4),
be allowed by way of—
(a) a primary rebate, an amount of R16 425;
(b) a secondary rebate, if the taxpayer was or, had he or she lived, would have been 65 years of age or older
on the last day of the year of assessment, an amount of R9 000; and
(c) a tertiary rebate if the taxpayer was or, had he or she lived, would have been 75 years of age or older on
the last day of the year of assessment, an amount of R2 997.
6A. Medical scheme fees tax credit.—(1) In determining the normal tax payable by any natural person there
must be deducted an amount, to be known as the medical scheme fees tax credit, equal to the sum of the
amounts allowed to that natural person by way of rebates under subsection (2), subject to subsection (3A).
(2) (a) The medical scheme fees tax credit applies in respect of fees paid by the person to—
(i) a medical scheme registered under the Medical Schemes Act; or
(ii) a fund which is registered under any similar provision contained in the laws of any
, that relate to benefits from that fund in respect of that person or of any person that is a dependant of that
person.
(b) The amount of the medical scheme fees tax credit must be—
(i) (aa) R347, in respect of benefits to the person, or if the person is not a member of a medical scheme
or fund in respect of benefits to a dependant who is a member of a medical scheme or fund or a
dependant of a member of a medical scheme or fund;
(bb) R694, in respect of benefits to the person, and one dependant; or
(cc) R694, in respect of benefits to two dependants; and
(ii) R234, in respect of benefits to each additional dependant,
for each month in that year of assessment in respect of which those fees are paid.
(3) For the purposes of this section, any amount contemplated in subsection (2) that has been paid by—
(a) the estate of a deceased person is deemed to have been paid by the person on the day before his or her
death; or
(b) an employer of the person is, to the extent that the amount has been included in the income of that
person as a taxable benefit in terms of the Seventh Schedule, deemed to have been paid by that person.
(3A) Where more than one person pays any fees in respect of benefits to a person or dependant, the amount
allowed to be deducted in respect of the medical scheme fees tax credit under subsection (1) must be an
amount that bears to the total amount in respect of that person or dependant contemplated in subsection
(2) (b) the same ratio as the amount of the fees paid by that person bears to the total amount of the fees
payable.
(4) For the purposes of this section a “dependant” in relation to a person means a “dependant” as defined
in section 6B (1).
(5) (a) The Minister may announce in the national annual budget contemplated in section 27 (1) of the Public
Finance Management Act, that, with effect from a date or dates mentioned in that announcement, the
amounts allowed to a natural person by way of rebates under subsection (2) will be altered to the extent
mentioned in the announcement.
(b) If the Minister makes an announcement of an alteration contemplated in paragraph (a), that alteration
comes into effect on the date or dates determined by the Minister in that announcement and continues to
apply for a period of 12 months from that date or those dates subject to Parliament passing legislation
giving effect to that announcement within that period of 12 months.
6B. Additional medical expenses tax credit.—(1) For the purposes of this section—
“child” means a person’s child or child of his or her spouse who was alive during any portion of the year of
assessment, and who on the last day of the year of assessment—
(a) was unmarried and was not or would not, had he or she lived, have been—
(i) over the age of 18 years;
(ii) over the age of 21 years and was wholly or partially dependent for maintenance upon the person and
has not become liable for the payment of normal tax in respect of such year; or
(iii) over the age of 26 years and was wholly or partially dependent for maintenance upon the person
and has not become liable for the payment of normal tax in respect of such year and was a full-
time student at an educational institution of a public character; or
(b) in the case of any other child, was incapacitated by a disability from maintaining himself or herself and
was wholly or partially dependent for maintenance upon the person and has not become liable for the
payment of normal tax in respect of that year;
“dependant” means—
(a) a person’s spouse;
(b) a person’s child and the child of his or her spouse;
(c) any other member of a person’s family in respect of whom he or she is liable for family care and
support; or
“gross income”, in relation to any year or period of assessment, means—
(i) in the case of any resident, the total amount, in cash or otherwise, received by or accrued to or in favour
of such resident; or
(ii) in the case of any person other than a resident, the total amount, in cash or otherwise, received by or
accrued to or in favour of such person from a source within the Republic,
during such year or period of assessment, excluding receipts or accruals of a capital nature, but including,
without in any way limiting the scope of this definition, such amounts (whether of a capital nature or not) so
received or accrued as are described hereunder, namely—
(a) any amount received or accrued by way of an annuity, including any amount contemplated in the definition
of “living annuity” or the definition of “annuity amount” in section 10A (1), other than an amount
contemplated in paragraph (d) (ii);
(b) any amount payable to the taxpayer—
(i) by the spouse or former spouse of that taxpayer, under any judicial order or written agreement of
separation or under any order of divorce, by way of alimony or allowance or maintenance of the
taxpayer; or
(ii) in terms of any maintenance order for the maintenance of a child as contemplated in section
15 (1) of the Maintenance Act, 1998 (Act No. 99 of 1998);
(c) any amount, including any voluntary award, received or accrued in respect of services rendered or to be
rendered or any amount (other than an amount referred to in section 8 (1), 8B or 8C) received or accrued in
respect of any employment or the holding of any office: Provided that—
(i) the provisions of this paragraph shall not apply in respect of any benefit or advantage in respect of
which the provisions of paragraph (i) apply;
(ii) any amount received by or accrued to or for the benefit of any person in respect of services
rendered or to be rendered by any other person shall for the purposes of this definition be deemed
to have been received by or to have accrued to the said other person;
(iii) the provisions of this paragraph shall not apply in respect of any amount received by or accrued to
or for the benefit of any person in respect of long service as defined in paragraph 5 (4) of
the Seventh Schedule, to the extent that the aggregate value of an amount determined under this
paragraph together with all amounts determined under paragraphs
5 (2) (b), 6 (4) (d) and 10 (2) (e) of the Seventh Schedule do not exceed R5 000;
(cA) any amount received by or accrued to any person who—
(ii) is or was a labour broker as defined in the Fourth Schedule (other than a labour broker in respect
of which a certificate of exemption has been issued in terms of that Schedule);
(iii) is or was a personal service provider as defined in the Fourth Schedule; or
(iv) was a personal service company or personal service trust as defined in the Fourth Schedule prior
to section 66 of the Revenue Laws Amendment Act, 2008, coming into operation
as consideration for any restraint of trade imposed on such person;
(cB) any amount received by or accrued to any natural person as consideration for any restraint of trade
imposed on that person in respect or by virtue of—
(i) employment or the holding of any office; or
(ii) any past or future employment or the holding of an office;
(d) any amount (other than an amount contemplated in paragraph (a)), including any voluntary award,
received or accrued—
(i) in respect of the relinquishment, termination, loss, repudiation, cancellation or variation of
any office or employment or of any appointment (or right or claim to be appointed) to any
office or employment;
, (ii) by or to a person, or dependant or nominee of the person, directly or indirectly in respect of
proceeds from a policy of insurance where the person is or was an employee or director of
the policyholder; or
(iii) by or to a person, or dependant or nominee of the person, in respect of any policy of
insurance (other than a risk policy with no cash value or surrender value) that has been
ceded to—
(aa) the person;
(bb) a dependant or nominee of the person; or
for the benefit of the person, or dependant or nominee of the person, by—
(A) the employer or former employer of the person; or
(B) the company of which the person is or was a director:
Provided that—
(aa) the provisions of subparagraphs (i) and (ii) shall not apply to any lump sum award from any
pension fund, pension preservation fund, provident fund, provident preservation fund or
retirement annuity fund;
(bb) any such amount which becomes payable in consequence of or following upon the death of
any person shall be deemed to be an amount which accrued to such person immediately
prior to his or her death;
(cc) for the purposes of subparagraphs (ii) and (iii), any amount received by or accrued to a
dependant or nominee of a person shall be deemed to be received by or to accrue to that
person;
(gA) any amount received or accrued from another person as consideration for the imparting of or the
undertaking to impart any scientific, technical, industrial or commercial knowledge or information,
or for the rendering of or the undertaking to render any assistance or service in connection with the
application or utilization of such knowledge or information;
(i) the cash equivalent, as determined under the provisions of the Seventh Schedule, of the value
during the year of assessment of any benefit or advantage granted in respect of employment or to
the holder of any office, being a taxable benefit as defined in the said Schedule, and any amount
required to be included in the taxpayer’s income under section 8A;
(jA) any amount received by or accrued to any person during the year of assessment in respect of the
disposal of any asset manufactured, produced, constructed or assembled by that person, which is
similar to any other asset manufactured, produced, constructed or assembled by that person for
purposes of manufacture, sale or exchange by that person or on that person’s behalf;
(k) any amount received or accrued by way of a dividend or a foreign dividend;
(m) any amount received or accrued in respect of a policy of insurance of which the taxpayer is the
policyholder, where the policy relates to the death, disablement or illness of an employee or
director (or former employee or director) of the taxpayer, including by way of any debt: Provided
that any amount so received or accrued shall be reduced by the amount of any such debt which is
or has been included in the taxpayer’s gross income;
(n) any amount which in terms of any other provision of this Act is specifically required to be included
in the taxpayer’s income and that amount must for the purposes of this paragraph be deemed to
have been received by or to have accrued to the taxpayer:
Provided that where during any year of assessment a person has become entitled to any amount which is
payable on a date or dates falling after the last day of such year, that amount shall be deemed to have accrued
to the person during such year;
“resident” means any—
(a) natural person who is—
(i) ordinarily resident in the Republic; or
(ii) not at any time during the relevant year of assessment ordinarily resident in the Republic, if that person
was physically present in the Republic—
, (aa) for a period or periods exceeding 91 days in aggregate during the relevant year of assessment, as well
as for a period or periods exceeding 91 days in aggregate during each of the five years of assessment
preceding such year of assessment; and
(bb) for a period or periods exceeding 915 days in aggregate during those five preceding years of
assessment,
in which case that person will be a resident with effect from the first day of that relevant year of
assessment: Provided that—
(A) a day shall include a part of a day, but shall not include any day that a person is in transit
through the Republic between two places outside the Republic and that person does not formally
enter the Republic through a “port of entry” as contemplated in section 9 (1) of the Immigration
Act, 2002 (Act No. 13 of 2002), or at any other place as may be permitted by the Director
General of the Department of Home Affairs or the Minister of Home Affairs in terms of that Act;
and
(B) where a person who is a resident in terms of this subparagraph is physically outside the Republic
for a continuous period of at least 330 full days immediately after the day on which such person
ceases to be physically present in the Republic, such person shall be deemed not to have been a
resident from the day on which such person so ceased to be physically present in the Republic; or
(b) person (other than a natural person) which is incorporated, established or formed in the Republic or which has
its place of effective management in the Republic, but does not include any person who is deemed to be
exclusively a resident of another country for purposes of the application of any agreement entered into
between the governments of the Republic and that other country for the avoidance of double taxation:
Provided that where any person that is a resident ceases to be a resident during a year of assessment, that
person must be regarded as not being a resident from the day on which that person ceases to be a resident:
Provided further that in determining whether a person that is a foreign investment entity has its place of
effective management in the Republic, no regard must be had to any activity that—
(a) constitutes—
(i) a financial service as defined in section 1 of the Financial Advisory and Intermediary Services Act, 2002
(Act No. 37 of 2002); or
(ii) any service that is incidental to a financial service contemplated in subparagraph (i) where the
incidental service is in respect of a financial product that is exempted from the provisions of that Act, as
contemplated in section 1 (2) of that Act; and
(b) is carried on by a financial service provider as defined in section 1 of the Financial Advisory and
Intermediary Services Act, 2002 (Act No. 37 of 2002), in terms of a licence issued to that financial service
provider under section 8 of that Act;
6. Normal tax rebates.—(1) In determining the normal tax payable by any natural person, other than normal
tax in respect of any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit or
severance benefit, there must be deducted an amount equal to the sum of the amounts allowed to the natural
person by way of rebates under subsection (2).
https://www-mylexisnexis-co-
za.ezproxy.uct.ac.za/Library/IframeContent.aspx?dpath=zb/jilc/kilc/alrg/ulrg/0ds6c/4j9if&ismultiview
=False&caAu=(2) In the case of a natural person there shall, subject to the provisions of subsection (4),
be allowed by way of—
(a) a primary rebate, an amount of R16 425;
(b) a secondary rebate, if the taxpayer was or, had he or she lived, would have been 65 years of age or older
on the last day of the year of assessment, an amount of R9 000; and
(c) a tertiary rebate if the taxpayer was or, had he or she lived, would have been 75 years of age or older on
the last day of the year of assessment, an amount of R2 997.
6A. Medical scheme fees tax credit.—(1) In determining the normal tax payable by any natural person there
must be deducted an amount, to be known as the medical scheme fees tax credit, equal to the sum of the
amounts allowed to that natural person by way of rebates under subsection (2), subject to subsection (3A).
(2) (a) The medical scheme fees tax credit applies in respect of fees paid by the person to—
(i) a medical scheme registered under the Medical Schemes Act; or
(ii) a fund which is registered under any similar provision contained in the laws of any
, that relate to benefits from that fund in respect of that person or of any person that is a dependant of that
person.
(b) The amount of the medical scheme fees tax credit must be—
(i) (aa) R347, in respect of benefits to the person, or if the person is not a member of a medical scheme
or fund in respect of benefits to a dependant who is a member of a medical scheme or fund or a
dependant of a member of a medical scheme or fund;
(bb) R694, in respect of benefits to the person, and one dependant; or
(cc) R694, in respect of benefits to two dependants; and
(ii) R234, in respect of benefits to each additional dependant,
for each month in that year of assessment in respect of which those fees are paid.
(3) For the purposes of this section, any amount contemplated in subsection (2) that has been paid by—
(a) the estate of a deceased person is deemed to have been paid by the person on the day before his or her
death; or
(b) an employer of the person is, to the extent that the amount has been included in the income of that
person as a taxable benefit in terms of the Seventh Schedule, deemed to have been paid by that person.
(3A) Where more than one person pays any fees in respect of benefits to a person or dependant, the amount
allowed to be deducted in respect of the medical scheme fees tax credit under subsection (1) must be an
amount that bears to the total amount in respect of that person or dependant contemplated in subsection
(2) (b) the same ratio as the amount of the fees paid by that person bears to the total amount of the fees
payable.
(4) For the purposes of this section a “dependant” in relation to a person means a “dependant” as defined
in section 6B (1).
(5) (a) The Minister may announce in the national annual budget contemplated in section 27 (1) of the Public
Finance Management Act, that, with effect from a date or dates mentioned in that announcement, the
amounts allowed to a natural person by way of rebates under subsection (2) will be altered to the extent
mentioned in the announcement.
(b) If the Minister makes an announcement of an alteration contemplated in paragraph (a), that alteration
comes into effect on the date or dates determined by the Minister in that announcement and continues to
apply for a period of 12 months from that date or those dates subject to Parliament passing legislation
giving effect to that announcement within that period of 12 months.
6B. Additional medical expenses tax credit.—(1) For the purposes of this section—
“child” means a person’s child or child of his or her spouse who was alive during any portion of the year of
assessment, and who on the last day of the year of assessment—
(a) was unmarried and was not or would not, had he or she lived, have been—
(i) over the age of 18 years;
(ii) over the age of 21 years and was wholly or partially dependent for maintenance upon the person and
has not become liable for the payment of normal tax in respect of such year; or
(iii) over the age of 26 years and was wholly or partially dependent for maintenance upon the person
and has not become liable for the payment of normal tax in respect of such year and was a full-
time student at an educational institution of a public character; or
(b) in the case of any other child, was incapacitated by a disability from maintaining himself or herself and
was wholly or partially dependent for maintenance upon the person and has not become liable for the
payment of normal tax in respect of that year;
“dependant” means—
(a) a person’s spouse;
(b) a person’s child and the child of his or her spouse;
(c) any other member of a person’s family in respect of whom he or she is liable for family care and
support; or
