Module 3 Specific deductions.pdf

Module 3 Specific deductions.pdf - TRADE MODULE 3 SPECIFIC...

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1 TRADE   MODULE   3 SPECIFIC   DEDUCTIONS Normal Tax Gross Income XXX Less: Exempt Income (XXX) Income XXX Less: Deductions and Allowances (XXX) Add: Taxable Capital Gain XXX Taxable Income XXX Tax per tax tables XXX Less: Rebates (XXX) Normal Tax XXX Specific Deductions Interest (Basic Level of Understanding) S 24J Legal expenses S 11(c) Restraint of trade payments S 11(cA) Bad debts S 11(i) Doubtful debts allowance S 11(j) Contributions by an employer to a pension, provident and benefit fund S11(l) Donations to a public benefit organisation S 18A Intellectual Property Registration of patents, copyrights, designs and trademarks Acquisition of patents, copyrights and designs S11(gB) S11(gC)
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2 Legal Expenses   – s11(c) Any   legal   expense   actually   incurred   by   the   taxpayer   during   the   year   of   assessment   in   respect   of   any   claim,   dispute   or   action; Legal Expenses   – s11(c) Provided   that   the   amount: Is   not   of   a   capital   nature; Is   not   incurred   in   respect   of   any   claim   made   against   the   taxpayer   which   does   not   or   would   not   rank   for   a   deduction   under   paragraph   (a); Is   not   incurred   in   respect   of   any   claim   made   by   the   taxpayer   which   does   not   or   would   not   constitute   income. Restraint   of   Trade   – s11(cA) S11(cA) allows for a deduction for restraint of trade payments When the restraint of trade payments are taxable in the hands of the recipient. To qualify for a s11(cA) deduction, the amount must be: Actually Incurred; In the course of trade; As compensation in respect of restraint of trade imposed on a natural person; and The amount must or will be included in the income of the person to whom it is paid.
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