Question 1 (51 marks)

Blue Vido Pty Ltd (‘’Blue V”) has the following three (3) employees during the year of assessment ended 29 February 2024.
Employee 1: 18 marks

Andile

Andile, 77 years of age, is a Senior Manager at Blue V, a small-medium sized manufacturing company in the center of Durban. He earns a monthly salary of R32 500 until 31 December 2023, when he decided to retire due to health complications. Andile also received monthly local interest R1 250 from his investment and R70 000 gross dividends from a foreign company. Andile also received R1 000 monthly commission until 31 December 2023 and R13 500 once-off bonus from his employer up on retirement. Andile also received R3 000 quarterly local dividends
Employee 2 18 marks

Naledi

Naledi, 35 years of age, is a working as Junior Accountant within a small accounting and taxation department. She earns a cash salary of R26 000 per month, due to the demand on her position, the company decided to increase her salary by 2.7% effective from 01 June 2023. Naledi received monthly local interest of R2 000 from her investment and local dividends amounting to R13 000. She earned a bonus of R17 000 and a monthly commission of R1000. Naledi won R12 500 from an accounting completion that was held by SAICA on 15 September 2023.

Employee 3 15 marks

Vuyiswa

Vuyiswa, 66 years of age, is working as an Admin clerk at Petroleum Garage. She earns a monthly salary of R10 000 per annum and an annual bonus of R10 000. Vuyiswa has earned an annual commission of R8 000, local dividends of R19 000 and monthly local interest of R2 000. Vuyiswa won R15 000 in a local modeling competition. Petroleum paid R2 500 over to SARS as provisional tax on behalf of Vuyiswa during the current year of assessment.
Required:

Calculate taxable income for all the three employees for the year ended 29 February 2024. Please briefly explain with reasons where items are not included/taxable with applicable sections of the Act. Show all your calculations and round off to the nearest Rand. (51 marks)

Question 2 (31 marks)

In the 2022 year of assessment, Luyanda resigned and withdrew R2 000 000 from his pension fund. He transferred 50% of this pension fund to a pension preservation fund. In the 2023 year of assessment, Luyanda received a withdrawal benefit of R380 000 from the pension preservation fund. In the 2024 year of assessment she retired and received a retirement benefit of R800 000.

YOU ARE REQUIRED TO:

Calculate the tax payable by Luyanda for the following years of assessment: Show all your calculations
• In the 2022 year of assessment 7 marks
• In the 2023 year of assessment 11 marks
• In the 2024 year of assessment 13 marks

Question 3 (12 marks)

Ntabie is the owner of Brown Dee Limited (“BD”). BD purchased a delivery vehicle on 1 March 2022 for an amount of R280 000. BD was entitled to a S11 (e) allowance of 20% on the delivery vehicle.
The delivery vehicle was sold on 1 November 2023 for an amount of R300 000.

Required:

Use the above information to calculate both the tax value and the recoupment for the year ended 29 February 2024. (12 marks)

Question 4 (6 marks)

Briefly explain your understanding of exempt income and state four (4) types of exempt income provided for by the Income Tax Act.

Answers to Above Questions on Taxation

Answer 1: The taxable income for all three employees is calculated are follows considering all sources of their income

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