Income Tax Act, 1962 (Act No. 58 of 1962)
Department of Finance
Practice Note No. 2
Transactions in Credit Instruments which are Issued at a Discount
Date: 6 May 1985
Profits or gains derived by holders of bankers' acceptances, treasury bills and Land Bank bills on the sale, other disposal or redemption of such assets constitute income which is subject to tax in the hands of the holders. Particulars of the transactions in question and the manner in which the amounts of the profits or gains were calculated must therefore be disclosed by taxpayers in their annual income tax returns.
As can be seen from the provisions of the Income Tax Act quoted hereunder, the nondisclosure of income can have serious consequences for the taxpayer.
"Any person who—
|c)||fails to show in any return made by him any portion of the gross income received by or accrued to or in favour of himself or fails to disclose to the Commissioner when making such return, any material facts which should have been disclosed,|
shall be guilty of an offence and liable on conviction to a fine not exceeding one hundred rand or to imprisonment for a period not exceeding three months or to both such fine and such imprisonment."
"A taxpayer shall be required to pay in addition to the tax chargeable in respect of his taxable income—
|b)||if he omits from his return any amount which ought to have been included therein, an amount equal to twice the difference between the tax as calculated in respect of the taxable income returned by him and the tax properly chargeable in respect of his taxable income as determined after including the amount omitted."|
[The so-called "treble tax"]