income or tax payable. Example:

Description and Section of the Act applicable

Calculations

Respective Columns $1/2/3$

Gross Income

R$60000$

Salary: section $(1)(1)$ general definition

R$5000$ x $12$ months

R$60000$

$2$ HTAX$230-1-$Jan$-$June$2024-$SA$1-$ELK$-$V$2-23012024$

QUESTION $1(50$ marks$)$

Thalita is a $57-$year$-$old South African resident who works as an architect at Big Drawings Limited $($Big Drawings$),$ a South African company situated in Johannesburg. The following information pertains to Thalita$$s $2024$ year of assessment:

$1.$ She earned a monthly salary of R$65000$ per month from Big Drawings for the period $1$ March $2023$ to $30$ November $2023.$ Thalita resigned on $30$ November $2023$ from Big Drawings after $25$ years of service.

$2.$ Thalita contributed R$110000$ in total to Big Drawings$$ pension fund $($a fund established under the Pension Funds Act of $1956)$ for the period she was employed by Big Drawings during the $2024$ year of assessment. Big Drawings contributed the same amount on behalf of Thalita to the pension fund. Assume that Thalita$$s remuneration amounts to R$732000$ for the $2024$ year of assessment.

$3.$ Thalita received a payment of R$360000$ from Big Drawings on $30$ November $2023$ in exchange for undertaking not to work at another architectural firm in the Johannesburg area within a period of five years.

$4.$ Thalita borrowed R$320000$ from Big Drawings on $1$ August $2023$ until $30$ September $2023$ to buy a new motor vehicle at an interest rate of $4\mathrm{.}5\%$ per annum. The interest is payable to Big Drawings on the last day of each month and accrues daily. The loan was repaid to Big Drawings on $30$ September $2023$ at the end of the business day. The official rate of interest for the relevant period was $5\mathrm{.}75\%.$

$5.$ Thalita used a set of six chairs owned by Big Drawings for private purposes at her home from $1$ March $2023$ to $31$ July $2023.$ Big Drawings purchased these chairs on $1$ January $2023$ at R$6000$ per chair. The total market value of these chairs was R$30000$ on $1$ March $2023.$

$6.$ On $30$ November $2023,$ Big Drawings bought a new Rolex watch for Thalita as a reward for her years of faithful service to the firm. The cost price of the watch was R$75000$ and the market value was R$80000$ on $30$ November $2023.$

$3$ HTAX$230-1-$Jan$-$June$2024-$SA$1-$ELK$-$V$2-23012024$

$7.$ Thalita signed an employment contract with Sketches $($Pty$)$ Ltd on $30$ November $2023$ to start working for them on $1$ December $2023$ in Johannesburg, Gauteng. Unfortunately, the employment contract could not be fulfilled by Sketches $($Pty$)$ Ltd and Big Drawings already employed someone else in Thalita$$s position from $1$ December $2023.$ Therefore, Thalita claimed and received R$16520$ per month from the Unemployment Insurance Fund for the period $1$ December $2023$ to $29$ February $2024.$

$8.$ Thalita received the following interest amounts during the $2024$ year of assessment:

$$ R$24000$ on a fixed deposit at a bank in South Africa.

$$ R$11000$ from a Momentum Investment that qualifies as a tax$-$free investment in terms of section $12$T$(1)$ of the Income Tax Act.

$9.$ Big Drawings withheld employees$$ tax amounting to R$283645$ from Thalita$$s salary during the $2024$ year of assessment, which they paid over to the South African Revenue Service.

REQUIRED:

$1\mathrm{.}1)$ Calculate Thalita$$s normal tax payable$/($refundable$)$ for the $2024$ year of assessment.

Show all calculations and round all answers to the nearest rand.

Please provide a reason should an amount not be included.

$(46$ marks$)$

$1\mathrm{.}2)$ Thalita wants to donate R$10000$ to Happy Pets, an animal shelter. Happy Pets is not a registered public benefit organisation. According to Thalita, she is allowed to subtract the R$10000$ donation from her taxable income. Briefly advise Thalita whether she is correct or not in terms of the Income Tax Act.

$(4$ marks$)$

$4$ HTAX$230-1-$Jan$-$June$2024-$SA$1-$ELK$-$V$2-23012024$

Competency Framework Reference:

E$1\mathrm{.}2$

Interpretation of tax legislation

b$)$

Demonstrate the ability to apply the principles of tax interpretation to any new or unfamiliar tax legislation.

E$1\mathrm{.}3$

Application of tax legislation to calculate tax obligation

a$)$

Analyse the taxpayer$$s tax profile.

c$)$

Apply the relevant law to the facts, determine the tax position and compute the tax payable $($VAT or normal tax$)$ for individuals and companies.

I$1$

Personal ethics

a$)$

Act honestly and demonstrate integrity, accountability and trustworthiness whilst interacting with others.

b$)$

Carry out work in a manner that protects public interest, the client, employer, and other relevant stakeholders, and put these before one$$s own interest.

I$2$

Business ethics

c$)$

Display ethical behavior whilst interacting with the organisation$$s stakeholders.

I$3$

Professional ethics

g$)$

By way of general conduct, demonstrate a commitment to the ethical$2024$ tax year $(1$ March $202329$ February $2024)$

Tax Rebates

$2024$

Primary

R$17235$

Secondary $(65$ and older$)$

R$9444$

Tertiary $(75$ and older$)$

R$3145$

Medical Aid Tax Credits

$2024$

Main member

R$364$

Taxpayer and first dependent

R$728$

Each additional dependent

R$246$

Taxable Income $($R$)$

Rates of tax $($R$)$

$1$