"Retirement annuity contributions qualify for tax deductions, so remember to take advantage of this attractive tax benefit when you submit your return," says Annemie Nieman, legal technical adviser at PSG.
Those excluded from having to submit a return are South Africans who earn an income from only one employer and who earned less than R350,000 for the period from 1 March 2014 to 28 February 2015. To qualify, you should also:
"If you fall into this category, you are correct in thinking that you do not have to submit a return. However, by not submitting, you give up the opportunity to claim back some of the tax you have already paid to the South African Revenue Service (SARS)," says Nieman. In many cases, taxpayers are unaware of the qualifying deductions that they can claim back. "This can even apply to those who earn more than R350,000 a year and have to submit tax returns in any case."
Contributions to a retirement annuity qualify for a tax deduction, but only if you submit a return. "The tax deduction can be quite substantial," she adds. For example, a 35 year old taxpayer earning a salary of R340,000 per year would pay tax of R63,384 for the 2015 tax year if no deductions are claimed.
"If, however, the taxpayer submits a tax return and claims a deduction for retirement annuity fund contributions of R30,000, the tax payable would reduce to R54,084. That is a reduction in tax and a reimbursement from SARS of R9,300 for the year."
Although it might sound like an enormous task, a basic return can be submitted within a matter of minutes using eFiling.
