Enhanced personal income tax return (ITR12)
43984, 16 Sep. 2015
Tags: personal income tax return, itr12
The enhanced Personal Income Tax Return (ITR12) for individuals is available from 14 September 2015. We have made several enhancements, introduced new deductions and added new source codes in alignment with all the legislative requirements. Please note that ITR12 returns in the current version not yet submitted to SARS via eFiling will after 14 September 2015 not be accepted.
Please take note of the following changes:
Income Protection Insurance Contributions
Income Protection Insurance Contributions will as from 1 March 2015 no longer qualify as a tax deduction.
Tax Free Investments
From the 2016 year of assessment, the ITR12 has been amended to make provision for tax free investments. The purpose of these investments are to encourage individuals to save and a person may invest up to R30 000 per tax year and a lifetime limit of R500 000 per taxpayer. However, should the prescribed annual/lifetime limit be exceeded, 40% of the amount exceeding the annual/lifetime limit, will be added to the normal tax payable for the Year of Assessment (YOA). The proceeds received on these investments will not be taxable.
Deductions in respect of expenditure incurred in exchange for issue of Venture Capital Company (VCC) shares
A Venture Capital Company (VCC) incentive was introduced from the 2010 Year of Assessment (YOA) to encourage investors to provide equity finance to small and medium sized businesses and junior mining companies. Investors can claim amounts invested in exchange for VCC shares as a tax deduction.
- The enhanced version of the ITR12 return makes provision for the details of the investments (limited to the top 10) to be completed on the return
- Where VCC shares are sold within a period of five years, from the date of acquisition, the proceeds must be declared under the recoupment of VCC shares section and will be added to the normal taxable income.
Taxable Distribution by a Real Estate Investment Trust (REIT)
The enhanced version of the ITR12 now makes provision for distributions received from Real Estate Investment Trusts (REITs). Please note that individuals married in community of property should declare 100% of distributions received. The 50% split will be applied programmatically on assessment.
Deduction of donations to certain organisations – new roll over created
The enhanced version of the ITR12 makes provision to list the donations made to a Public Benefit Organisation (PBO) separately (limited to the top five). The aggregate value of all donations made (to be captured in a separate field) will programmatically be limited to 10% of taxable income (before taking donations into account). The amount in excess of 10% of taxable income will be carried over to the next year.
New Fringe Benefit Source Codes for Bursaries and Acquisition of Immovable Assets
The enhanced version of the ITR12 now allows for the following additional codes on IRP5 certificates:
Source Codes Description:
- 3820 (3870) Taxable Bursaries or scholarships – Further Education
- 3821 (3871) Non-taxable Bursaries or scholarships – Further Education
- 3822 (3872) Non-taxable Fringe Benefit – Acquisition of Immovable Property
Notice of Assessment Updates
The following information has been added to the ITA34:
- Other deductions: Code 4051– Investment in Venture Capital companies
- Other income: Code 4245 – section 12J VCC recoupment
- Tax calculation: Tax free investment penalty (only applicable from 2016 YOA
Distribution from a Real Estate Investment Trust:
Code 4238 – Distribution from a Real Estate Investment Trust (REIT)
If the taxpayer is married in community of property the following code will be displayed: Code 0034 - Married in community of property - 50% adjustment.
Integrated Voice Response (IVR) system makes provision for more languages
Conveniently, taxpayers can now request and receive the ITR12 in printed form in all the official languages when calling the SARS Contact Centre on 0800 00 7277.
- » Tax treatment of contributions to retirement funds
- » Tables of Interest Rates updated on 29 September 2015
- » Reminder to get ready for electronic applications available from 14 Sep 2015
- » Tax Directive Changes
- » Binding Class Ruling: BCR 048