Income tax is the tax levied on income and profit received by a taxpayer (which includes individuals, companies and trusts). It is the national government’s main source of income and is imposed by the Income Tax Act No. 58 of 1962.
The form of tax that people generally associate with the concept of income tax is “normal” income tax. But the Income Tax Act is also a source of a number of other taxes that, although they have their own particular names, still forms part of the income tax system. A few taxes which may affect the taxpayers are capital gains tax and donations tax. The Act also establishes a way of paying tax which is PAYE or provisional tax The Income Tax Act No. 58 of 1962 sets out a series of steps to be followed in calculating a taxpayer’s “taxable income”. This forms the foundation on which tax liability is calculated.
When calculating your tax, we determine the gross income, deduct the exempt income, deduct the allowable taxable deductions, multiply the taxable income by the applicable tax rate and then subtract the rebates and any other tax already paid.
So stay ahead of the Taxman, have an idea how much income tax you are exposed to well before the Taxman hits with a bill. Contact us with your income tax questions.