2021 Tax Season

29 June 2021WJ Mitchell Blog

The South African Revenue Services (SARS) has announced that taxpayers will be able to file their tax returns from 1 July 2021. A significant number of individual taxpayers will be auto-assessed once again this year, and this process will also start around the same period. The auto-assesses are based on the data they receive from employers, financial institutions, medical schemes, retirement annuity fund administrators and other third-party data providers.
 
Here are the important dates that taxpayers should be aware of:
 

  • 1 July to 23 November 2021 – This is the period for taxpayers who file online. Taxpayers who cannot file online can do so at a SARS branch by appointment only.
  • 1 July to 28 January 2022 – This is the period for Provisional taxpayers including Trusts may file via eFiling or SARS MobiApp.

 
You will find that the majority of your investment and Medical Aid tax certificates have been emailed to you and the rest should be sent out by the end of June.
 
According to Financial Planner Justin Evans of Compendium, there are various methods to reduce your annual tax burden through an investment vehicle or medical aid plan;
 

  • Open up a Tax Free Savings Investment : To encourage South Africans to be better savers, SARS allows taxpayers to save a maximum of R36 000 per year and R500 000 in your lifetime tax-free. These amounts have to be saved in a specially designated fund/account without having to pay any tax on capital gains or on the interest or dividends received on these investments.
  • Contribute towards a Pension, Provident Fund or Retirement Annuity : If you contribute towards your retirement in one of these savings vehicles, you may deduct up to 27.5% of your gross remuneration or taxable income (whichever is higher) in respect of your total contributions to a Pension, Provident or RA fund, subject to an annual limit of R350 000.
  • Join a Medical Aid Scheme : If you contribute to a Medical Aid Scheme this tax year (i.e. 2021/2022) you will receive a fixed monthly tax credit of R332 for you as the primary member, a further R332 for your first dependent and R224 for each of your additional dependents. SARS calls this rebate the Medical Schemes Fees Tax Credit - it is a flat rate per month (i.e. doesn’t take your taxable income into consideration) and is direct reduction of your tax liability. Please note that GAP Cover products do not qualify as a tax deduction.

 
Please let me know if you have any queries regarding tax returns and the 2021 tax season in general.