1) Notwithstanding the provisions of section 23, there mustl be allowed to be deducted from the income of any taxpayer who is a natural person an allowance in respect of--
a) any contributions made by that taxpayer in respect of the year of assessment in respect of that taxpayer, his or her spouse and any dependant, as defined in section 1 of the Medical Schemes Act, 1998 (Act N0. 131 of 1998), of that taxpayer to-
i) any medical scheme registered under the provisions of that Act, or
ii) any fund which is registered under any similar provision contained in the laws of any other country where the medical scheme is registered,
b) any amounts (other than amounts recoverable by the taxpayer or his or her spouse) which were paid by the taxpayer during the year of assessment to any duly registered--
i) medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthoptist for professional services rendered or medicines supplied to the taxpayer, his or her spouse or his or her children, or any dependant of the taxpayer if the taxpayer was a member of a scheme or fund contemplated in paragraph (a) and that dependant was, at the time such amounts were paid, admitted as a dependant of the taxpayer in terms of that scheme or fund; or
ii) nursing home or hospital or any duly registered or enrolled nurse, midwife or nursing assistant (or to any nursing agency in respect of the services of such a nurse, midwife or nursing assistant) in respect of the illness or confinement of the taxpayer, his or her spouse or his or her children, or any dependant of the taxpayer contemplated in subparagraph (i); or
iii) pharmacist for medicines supplied on the prescription of any person mentioned in subparagraph (i) for the taxpayer, his or her spouse or his or her children, or any dependant of the taxpayer contemplated in subparagraph (i); and
c) any amounts (other than amounts recoverable by the taxpayer or his or her spouse) which were paid by the taxpayer during the year of assessment in respect of expenditure incurred outside the Republic on services rendered or medicines supplied to the taxpayer or his or her spouse or children, or any dependant of the taxpayer contemplated in paragraph (b)(i), and which are substantially similar to the services and medicines in respect of which a deduction may be made under paragraph (b) of this subsection; and
d) any expenditure that is prescribed by the Commissioner (other than expenditure recoverable by the taxpayer or his or her spouse) necessarily incurred and paid by the taxpayer in consequence of any physical impairment or disability suffered by the taxpayer, his or her spouse or child, and any dependant of the taxpayer contemplated in paragraph (b)(i).
2) The allowance under subsection (1) is equal to--
a) where the taxpayer is entitled to a rebate under section 6 (2) (b), the sum of the amounts referred to in subsection (1); or
b) where the taxpayer, his or her spouse or child is a person with a disability, the sum of the amounts referred to in subsection (1); or
c) in any other case,
i) so much of the contributions made by the taxpayer during the relevant year of assessment as contemplated in subsection (1)(a), as does not exceed—
aa) R625 for each month in that year in respect of which those contributions were made solely with respect to the benefits of that taxpayer;
bb) R1 250 for each month in that year in respect of which those contributions were made with respect to the benefits of that taxpayer and one dependant; or
cc) where those contributions are made with respect to the taxpayer and more than one dependant, the amount referred to in item (bb) in respect of the taxpayer and one dependant plus R380 for every additional dependant for each month in that year in respect of which those contributions were made; and
ii) so much of—
aa) any contributions contemplated in subsection (1)(a) as have not been allowed as a deduction under subparagraph (i); and
bb) the sum of all amounts contemplated in subsection (1)(b), (c) and (d),
as in the aggregate exceeds 7,5 per cent of the taxpayer’s taxable income (excluding any retirement fund lump sum benefit and retirement fund lump sum withdrawal benefit) as determined before allowing any deduction under this subparagraph.
3) For the purposes of this section ‘disability’ means a moderate to severe limitation of a person’s ability to function or perform daily activities as a result of a physical, sensory, communication, intellectual or mental impairment, if the limitation—
a) has lasted or has a prognosis of lasting more than a year; and
b) is diagnosed by a duly registered medical practitioner in accordance with criteria prescribed by the Commissioner.
4) For the purposes of this section the expression "child in relation to the taxpayer" means the taxpayer's child or child of his or her spouse who was alive during any portion of the year of assessment, and who on the last day of the year of assessment--
a) was unmarried and was not or would not, had he lived, have been--
i) over the age of 18 years;
ii) over the age of 21 years and was wholly or partially dependent for his maintenance upon the taxpayer and has not become liable for the payment of normal tax in respect of such year; or
iii) over the age of 26 years and was wholly or partially dependent for his maintenance upon the taxpayer and has not become liable for the payment of normal tax in respect of such year and was a full-time student at an educational institution of a public character; or
b) in the case of any other child, was incapacitated by a disability from maintaining himself or herself and was wholly or partially dependent for maintenance upon the taxpayer and has not become liable for the payment of normal tax in respect of such year.:
Provided that any child of the taxpayer who has become liable for the payment of normal tax in respect of any year of assessment solely by reason of the provisions of section 5(1A) shall be deemed for the purposes of this section not to have become liable for the payment of normal tax in respect of such year.
(5) For purposes of this section, any amount contemplated in subsection (1), which has been paid by—
(a) the estate of a deceased taxpayer is deemed to have been paid by the taxpayer on the day before his or her death; or
(b) an employer of the taxpayer must, to the extent that the amount has been included in the income of that taxpayer as a taxable benefit in terms of the Seventh Schedule, be deemed to have been paid by that taxpayer.
