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Does Section 23(m) apply to you?

by , 23 July 2014
In these tough economic times, you dream of reducing your taxable income. Because let's face it, no one likes handing more money over to SARS than they have to.

The good news is your dream can become a reality.

It's true.

You can reduce your taxable income if you apply Section 23(m) of the Income Tax Act correctly.

Keep reading to find out if Section 23(m) applies to you, so you can use it to your advantage and legally claim deductions to keep more money in your bank account.

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What you need to know about Section 23(m)


In this article, we explain that Section 23(m) deals with business related expenses, losses or allowances. It also deals with who can and can't claim tax deductions on those expenses and allowances.
 

Now the big question is: Does Section 23(m) apply to you?
 

Let's find out…


Section 23(m) applies to you if:


#1: You're employed and earn commission, where your commission is less than 50% of your earnings.
 

#2: You're not a labour broker, a personal service company and personal service trust.
 

#3: You're in employment for which you earn remuneration as defined in the Fourth Schedule of the Income Tax Act.
 

In terms of the Act, remuneration includes any amount paid or payable to any person, including:

  • Salary
  • Leave pay
  • Wages
  • Overtime pay
  • Bonus
  • Gratuity
  • Commission
  • Fee
  • Emolument (profit from the holding of an office, such as company secretary or director)
  • Pension
  • Superannuation allowance (an allowance paid to a person who has become too old to work)
  • Retiring allowance or stipend (a clergyman's official income), whether in cash or otherwise and whether or not it's for services rendered.


If you tick these boxes, you can use Section 23(m) to save tax by claiming deductions. Check out this article to check out the 11 tax deductions outlined in Section 23(m) which you can claim.




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