TAX1501 EXAM SEM 1 OF 2026 EXPECTED ANSWERS

QUESTION ONE

Calculation of Nomsa Kumbi’s Tax Liability for the 2026 Year of Assessment

Description Workings Amount (R)
Gross Income
Salary 760 000
Bonus 120 000
Dividend income –
33 000
South African
Foreign interest 42 000
Total Gross Income 955 000

Less: Exempt Income

Dividend income – Fully exempt from normal tax
(33 000)
South African (subject to Dividends Tax).

Income 922 000
Less: Deductions
Limit: 27.5% of the greater of
Remuneration (R944 600) or
Taxable Income before s11F
(R922 000).

Section 11F:
27.5% × R944 600 = R259
Retirement Annuity (60 000)
765.
Fund

Actual contribution: R60
000. The full R60 000 is
allowed as it is below the limit.

, Taxable Income
before s18A R922 000 – R60 000 862 000
Donations

Limit: 10% of Taxable Income
before s18A deduction.



10% × R862 000 = R86 200.
Section 18A: Donations (86 200)

Actual donation: R110 000.
The deduction is limited to
R86 200. (The remaining R23
800 is carried forward to the
next year).

TAXABLE INCOME R862 000 – R86 200 775 800
Tax Bracket: R673 001 –
R857 900.

R179 147 + [39% × (R775
Normal Tax on R775 800 – R673 000)]
219 239
800
R179 147 + (39% × R102
800)

R179 147 + R40 092
Less: Tax Rebates
Taxpayer is under 65 years of
Primary Rebate (17 235)
age.
Taxpayer + 1st Dependant
(Wife) + 2 Additional
Dependants (Children).

Medical Scheme Fees
(R364 × 2) + (R246 × 2) = R1 (14 640)
Tax Credit (MTC)
220 per month.

R1 220 × 12 months = R14
640.

Taxpayer is under 65 with no
disabilities. Formula: 25% ×
[Excess Medical Contributions
+ Qualifying Expenses –
(7.5% × Taxable Income)]



Step 1: Excess Medical
Contributions