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Income Tax Act, 1962 (Act No. 58 of 1962)

Regulations

Regulations in terms of section 12T(8) of the Income Tax Act, 1962, on the requirements for Tax Free Investment

Part V : Returns and maturity date

10A. Calculating rate of return in respect of tax free investment with fixed term and guaranteed return

 

If a tax free investment consists of a financial instrument or policy with a fixed term and a guaranteed return the product provider must calculate the rate of return of that tax free investment in accordance with the formula:

 

 

in which formula—

(a) "X" represents the amount to be determined
(b) "A" represents an amount determined in accordance with the formula:

 

 

in which formula—

(i) "Y" represents the amount to be determined;
(ii) "E" represents the number 1;
(iii) "F" represents an amount equal to the value of the tax free investment at the expiry of the fixed term other than the value of any contributions made after the commencement of the fixed term and the value of any amount received or accrued in respect of those contributions;
(iv) "G" represents an amount equal to the value of the tax free investment at the commencement of the fixed term;
(vi) "B" represents an amount determined in accordance with the formula:

 

(aa) "Z" represents the amount to be determined;
(bb) "H" represents the number 1; and
(cc) "I" represents the number of years to maturity of the tax free investment.
c) "C" represents the number 1.

 

[Regulation 10A inserted by regulation 8 of Notice No. R. 309 of 2017]