Question:
I am a 60-year-old member of the GEPF and receive a monthly taxable pension. I contributed less than 15% of my total taxable, non-retirement funding income for the 2012-13 tax year to a retirement annuity - something I had been doing for many years before retirement. This year, however, my e-filing tax assessment disallowed the full contribution, limiting the deduction to R1 750. Is this correct?
Answer:
Mark,
The tax rule is that your current retirement fund contributions are limited to 15% of taxable income from non-retirement funding income, or R3 500 less current contributions to a pension fund, or R1 750, whichever is the greater. The fact that SARS has permitted only R1 750 suggests that they acknowledge your retirement annuity contributions, but that they don't view your income as coming from a non-retirement funding source. But if you are merely receiving a pension, and you are not contributing to pension or provident fund, then that cannot be correct. It must thus be an administrative or capturing error on their side. You should lodge a query on the e-filing site.
