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News & Press: Individuals Tax

Additional Medical Expenses Tax Credit

07 December 2012   (0 Comments)
Posted by: SAIT Technical
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By Michael Stein (Friday Page)

Section6B has been added to the Income Tax Act to provide a rebate, to be known as the additional medical expenses tax credit, which will be deducted from the normal tax payable by a person who is a natural person. It will be available in addition to the existing rebate allowed under s 6A.

The amount of the additional medical expenses tax credit is—

• when the person is entitled to the over-65 rebate under s6(2)(b), the aggregate of—

– 33,3% of so much of the amount of the fees paid by the person to a qualifying medical scheme or fund as exceeds three times the amount of the existing medical scheme fees tax credit to which the person is entitled under s6A(2)(b); and

– 33,3% of the amount of qualifying medical expenses paid or incurred and paid by the person.;

• when the person, his or her spouse or his or her child is a person with a ‘disability', the aggregate of

– 33,3% of so much of the amount of the fees paid by the person to a qualifying medical scheme or fund as exceeds three times the amount of the existing medical scheme fees tax credit to which the person is entitled under s6A(2)(b); and

– 33,3% of the amount of qualifying medical expenses paid or incurred and paid by the person; or

• in any other case, 25% of so much of the aggregate of—

– the amount of the fees paid by the person to a qualifying medical scheme or fund as exceeds four times the amount of the existing medical scheme fees tax credit to which the person is entitled under s6A(2)(b); and

– the amount of qualifying medical expenses paid by the person,

as exceeds 7,5% of the person's taxable income (excluding any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit and severance benefit).

This additional rebate is set to come into force and the long established deduction under s 18 of the Act for qualifying medical expenses is expected to fall away with effect from 1 March 2014, but with our current legislators anything can happen. As they have frequently demonstrated, there is many a slip twixt cup and lip!


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