TAX2601
Assignment 1 Semester 2 2025
Unique Number:
Due Date: 8 September 2025
QUESTION 1
According to section 1 of the Income Tax Act, gross income for a resident includes:
“The total amount, in cash or otherwise, received by or accrued to or in favour of such
resident during the year of assessment, excluding amounts of a capital nature.”
Application of Gross Income Criteria
1 Total amount in cash or otherwise
✔ Yes – The company received R4 300 000 in cash, which qualifies as a “total amount” as
per CIR v Butcher Bros (Pty) Ltd 13 SATC 21, where the court confirmed that money or
ascertainable money value must be considered.
Terms of use
By making use of this document you agree to:
Use this document as a guide for learning, comparison and reference purpose,
Terms of use
Not to duplicate, reproduce and/or misrepresent the contents of this document as your own work,
By making use of this document you agree to:
Use this document
Fully accept the consequences
solely as a guide forshould you plagiarise
learning, reference,orand
misuse this document.
comparison purposes,
Ensure originality of your own work, and fully accept the consequences should you plagiarise or misuse this document.
Comply with all relevant standards, guidelines, regulations, and legislation governing academic and written work.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is" without any express or
implied representations or warranties. The author accepts no responsibility or liability for any actions taken based on the
information contained within this document. This document is intended solely for comparison, research, and reference purposes.
Reproduction, resale, or transmission of any part of this document, in any form or by any means, is strictly prohibited.
, +27 67 171 1739
QUESTION 1
According to section 1 of the Income Tax Act, gross income for a resident includes:
“The total amount, in cash or otherwise, received by or accrued to or in favour of
such resident during the year of assessment, excluding amounts of a capital
nature.”
Application of Gross Income Criteria
1 Total amount in cash or otherwise
✔ Yes – The company received R4 300 000 in cash, which qualifies as a “total
amount” as per CIR v Butcher Bros (Pty) Ltd 13 SATC 21, where the court confirmed
that money or ascertainable money value must be considered.
2 Received by, accrued to, or in favour of the taxpayer
✔ Yes – The amount was received on 1 March 2025, therefore it accrued during the
year of assessment ending 31 March 2025. According to CIR v People's Stores
(Walvis Bay) (Pty) Ltd 52 SATC 9, an amount accrues when the taxpayer becomes
unconditionally entitled to it.
3 During the year of assessment
✔ Yes – The year of assessment is from 1 April 2024 to 31 March 2025, and the
amount was received on 1 March 2025, thus falling within the correct tax year.
4 Excluding amounts of a capital nature
✘ No – This is the key issue: the amount is of a capital nature.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
Assignment 1 Semester 2 2025
Unique Number:
Due Date: 8 September 2025
QUESTION 1
According to section 1 of the Income Tax Act, gross income for a resident includes:
“The total amount, in cash or otherwise, received by or accrued to or in favour of such
resident during the year of assessment, excluding amounts of a capital nature.”
Application of Gross Income Criteria
1 Total amount in cash or otherwise
✔ Yes – The company received R4 300 000 in cash, which qualifies as a “total amount” as
per CIR v Butcher Bros (Pty) Ltd 13 SATC 21, where the court confirmed that money or
ascertainable money value must be considered.
Terms of use
By making use of this document you agree to:
Use this document as a guide for learning, comparison and reference purpose,
Terms of use
Not to duplicate, reproduce and/or misrepresent the contents of this document as your own work,
By making use of this document you agree to:
Use this document
Fully accept the consequences
solely as a guide forshould you plagiarise
learning, reference,orand
misuse this document.
comparison purposes,
Ensure originality of your own work, and fully accept the consequences should you plagiarise or misuse this document.
Comply with all relevant standards, guidelines, regulations, and legislation governing academic and written work.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is" without any express or
implied representations or warranties. The author accepts no responsibility or liability for any actions taken based on the
information contained within this document. This document is intended solely for comparison, research, and reference purposes.
Reproduction, resale, or transmission of any part of this document, in any form or by any means, is strictly prohibited.
, +27 67 171 1739
QUESTION 1
According to section 1 of the Income Tax Act, gross income for a resident includes:
“The total amount, in cash or otherwise, received by or accrued to or in favour of
such resident during the year of assessment, excluding amounts of a capital
nature.”
Application of Gross Income Criteria
1 Total amount in cash or otherwise
✔ Yes – The company received R4 300 000 in cash, which qualifies as a “total
amount” as per CIR v Butcher Bros (Pty) Ltd 13 SATC 21, where the court confirmed
that money or ascertainable money value must be considered.
2 Received by, accrued to, or in favour of the taxpayer
✔ Yes – The amount was received on 1 March 2025, therefore it accrued during the
year of assessment ending 31 March 2025. According to CIR v People's Stores
(Walvis Bay) (Pty) Ltd 52 SATC 9, an amount accrues when the taxpayer becomes
unconditionally entitled to it.
3 During the year of assessment
✔ Yes – The year of assessment is from 1 April 2024 to 31 March 2025, and the
amount was received on 1 March 2025, thus falling within the correct tax year.
4 Excluding amounts of a capital nature
✘ No – This is the key issue: the amount is of a capital nature.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
