Tax on local interest

[LaraC]

I’ve noticed that my tax on local interest increased from 19% to over 37% which made me wonder;

- At which rate does SARS tax local interest?
- Is it linked to the amount you earned or is it calculated according to income groups?

Ps. I really don’t want to pay back the money and any advice that could help prevent that would be appreciated.

 

[AchmatK]

It's included in your taxable income and taxed at your marginal rate.

 

[LaraC]

Thank you signates, I was afraid you were going to say that.

 

[patrick]

You must be earning a ton of interest, the first R23800 is tax free. Is it for a REIT perhaps?

 

[SauRoNZA]

You must be earning a ton of interest, the first R23800 is tax free. Is it for a REIT perhaps?

Please explain that because I have a REIT value on my Old Mutual certificate and couldn't for the life of me figure out where it needs to go?

I can't find the code on the eFiling doc at all.

 

[LaraC]

You must be earning a ton of interest, the first R23800 is tax free. Is it for a REIT perhaps?

No it is money that is in a deposit account. Depending on the interest rate it doesn’t take much to exceed the tax exemption amount.

 

[LaraC]

Please explain that because I have a REIT value on my Old Mutual certificate and couldn't for the life of me figure out where it needs to go?

I can't find the code on the eFiling doc at all.

I'm guessing that it should probably go under dividends received.

 

[AchmatK]

Please explain that because I have a REIT value on my Old Mutual certificate and couldn't for the life of me figure out where it needs to go?

I can't find the code on the eFiling doc at all.

REITs are Real Estate Investment Trusts. Any income on these are treated as interest income and not dividend income.

 

[LaraC]

How about a tax saving tip signates?

 

[supersunbird]

No it is money that is in a deposit account. Depending on the interest rate it doesn’t take much to exceed the tax exemption amount.

It probably takes over R400 000, or more, to reach the R23800 annual tax limit of interest. So it takes much in my opinion... and then still you are only taxed on the amount of interest over R23800..

 

[LaraC]

It probably takes over R400 000, or more, to reach the R23800 annual tax limit of interest. So it takes much in my opinion... and then still you are only taxed on the amount of interest over R23800..

I don’t like it that SARS want to take R370 from every thousand I earned.

 

[Niner]

Add VAT, property tax, sin tax, fuel levy, estate tax etc, and you're getting out about R400 out of every R1000 you earn. That's a depressing thought!

 

[patrick]

No it is money that is in a deposit account. Depending on the interest rate it doesn’t take much to exceed the tax exemption amount.

Ah ok, unless you have a good reason for keeping it in cash, you should probably think of doing something else with it. Pay off debt or invest it in ETFs would be my call.

 

[Purply]

How does SARS even know about this money, did you tell them or did the bank tell them?

 

[LaraC]

Ah ok, unless you have a good reason for keeping it in cash, you should probably think of doing something else with it. Pay off debt or invest it in ETFs would be my call.

The deposit matures within two weeks. I’ve already made arrangements to speak to a financial advisor.

 

[LaraC]

How does SARS even know about this money, did you tell them or did the bank tell them?

The bank e-mails you an IT3(b) form which contain all the interest you received on your accounts. They also report it to SARS.
You are also required to declare all interest you earned on your e-filling tax return.

 

[mintydroid]

The bank e-mails you an IT3(b) form which contain all the interest you received on your accounts. They also report it to SARS.
You are also required to declare all interest you earned on your e-filling tax return.

The fact that some institutions send it to SARS is the reason why I declare otherwise I won't.

 

[Purply]

The bank e-mails you an IT3(b) form which contain all the interest you received on your accounts. They also report it to SARS.
You are also required to declare all interest you earned on your e-filling tax return.

That's odd, I've never received anything like that from my bank, neither has SARS ever bothered me about it, not planning on giving away more money than I already have to.

 

[LaraC]

The fact that some institutions send it to SARS is the reason why I declare otherwise I won't.

I won’t take a chance not to declare it. SARS could just see it as intentional and give you a huge fine.

 

[LaraC]

That's odd, I've never received anything like that from my bank, neither has SARS ever bothered me about it, not planning on giving away more money than I already have to.

Does your bank have your correct contact and address details?
You could also log onto your internet banking and download it from there.