Question:
I received my 1 third lumpsum in February 2014 from Absa who is the pension fund administrator.I am not satisfied with the tax deductions on my lump sum payment. Please assist
Answer:
Dr V Vadivelu,
It would be helpful if you gave your dissatisfaction a numeric context. But you must remember that your lump sum would be taxed under the old retirement lump sum tax table (ie only the first R315 000 would be tax free, not the first R500 000 as under the new table, effective from the budget date) and that any previous retirement lump sums you may have taken will be considered in applying the lump sum tax table (you don't get the tax free portion twice). Also understand that SARS calculates the tax to be deducted, not ABSA/the administrator. Only SARS has your full lump sum history.
