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Tax-Free Interest Increased

Monday, 29 March 2010   (0 Comments)
Posted by: Author: Julius Cobbett
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Tax-Free Interest Increased

No great fireworks—the increases only match inflation

Treasury has marginal increases to the amount of interest and foreign dividends that is exempt to tax. Currently, you are allowed R21 000 a year in interest income tax-free. Any amount above that is taxed.If you are over 65 years old, you are allowed R30 000 a year tax free.The tax-free threshold has been increased to R22 300 for people under 65. For those over 65, the threshold has increased to R32 000 a year.

These increases cannot be viewed as an increased incentive to get people to save; they are only in line with inflation.For interest and dividends earned on foreign savings, the tax free portion has been increased from R3 500 to R3 700 a year.

Treasury notes that these exemptions "will be limited to savings through widely available interest-bearing instruments, such as bank deposits, government retail bonds, and collective investment money market funds”."The new limits will exclude tax planning aimed at shifting taxable income.”

Source: By Julius Cobbett (Tax breaks)



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