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Pretoria - Finance Minister Pravin Gordhan, announced tax relief of R8.1bn for individuals to counteract the effects of "fiscal drag" - the effect of inflation pushing individuals into higher tax brackets.
From March 2011, tax will be payable only on income above R59 750 for taxpayers below the age of 65, and R93 150 for those 65 and older.
A third rebate of R2 000 per year is proposed, increasing the tax threshold for taxpayers aged 75 and older to R104 261.
An increase in the annual tax-free interest income to R22 800 for individuals below 65 years is proposed, and to R33 000 for individuals 65 years and over.
The Treasury is exploring the possibility of incentivised savings schemes for housing or education as alternatives to this exemption. The tax-free lump sum benefit upon retirement will increase from R300 000 to R315 000.
Gordhan said, as in past years, inflation-related increases would be made to the monthly thresholds for tax-deductible contributions to medical schemes.
These deductions, and those for qualifying out-of-pocket medical expenses, would be converted into tax credits with effect from March 2012.
A tax credit was more equitable since it provided for an equal benefit to all taxpayers regardless of their income.
From March 2011, tax will be payable only on income above R59 750 for taxpayers below the age of 65, and R93 150 for those 65 and older.
A third rebate of R2 000 per year is proposed, increasing the tax threshold for taxpayers aged 75 and older to R104 261.
An increase in the annual tax-free interest income to R22 800 for individuals below 65 years is proposed, and to R33 000 for individuals 65 years and over.
The Treasury is exploring the possibility of incentivised savings schemes for housing or education as alternatives to this exemption. The tax-free lump sum benefit upon retirement will increase from R300 000 to R315 000.
Gordhan said, as in past years, inflation-related increases would be made to the monthly thresholds for tax-deductible contributions to medical schemes.
These deductions, and those for qualifying out-of-pocket medical expenses, would be converted into tax credits with effect from March 2012.
A tax credit was more equitable since it provided for an equal benefit to all taxpayers regardless of their income.
- Calculate what you owe the tax man with this income tax calculator.
