10C. Exemption of nondeductible element of qualifying annuities
Category: Section 10C (ITA) – Exemption of non-deductible element of compulsory annuities
Section 10C
Section 10C inserted by section 21 of Act 22 of 2012 effective on 1 March 2014.
“Compulsory annuity” definition of section 10C of ITA
(1) For the purposes of this section-
“qualifying annuity” means the amount of the retirement interest of a person payable in the form of an annuity (including a living annuity)-
(a) as contemplated in paragraph (ii)(dd) of the proviso to paragraph (c) of the definition of “pension fund”;
(b) as contemplated in paragraph (e) of the proviso to the definition of “pension preservation fund”;
(c) as contemplated in paragraph (b)(ii) of the proviso to the definition of “retirement annuity fund”;
[Paragraph (c) amended by section 12(1)(a) of Act 23 of 2020 effective on 1 March, 2021]
(d) as contemplated in paragraph (ii)(dd) of the proviso to the definition of “provident fund” in section 1(1); or
[Paragraph (d) substituted by section 12(1)(b) of Act 23 of 2020 and by section 7(1) of Act 20 of 2022 effective on 1 March 2021]
(e) as contemplated in paragraph (e) of the definition of “provident preservation fund” in section 1(1).
[Paragraph (e) added by section 12(1)(c) of Act 23 of 2020 effective on 1 March, 2021]
[Definition of “qualifying annuity”, previously definition of “compulsory annuity” amended by section 16(1) of Act 43 of 2014 and substituted by section 14(1)(b) of Act 34 of 2019 effective on 1 March, 2020 and applicable in respect of any contributions made to a provident or provident preservation fund in determining the taxable annuity received during any year of assessment from such fund in relation to annuities received on or after 1 March, 2020]
Subsection 2 of section 10C of ITA
(2) There shall be exempt from normal tax in respect of the aggregate of qualifying annuities payable to a person an amount equal to so much of any contributions to any pension fund, provident fund and retirement annuity fund that did not rank for a deduction against the person’s income in terms of section 11F as has not previously been-
(a) allowed to the person as a deduction in terms of the Second Schedule; or
(b) exempted from normal tax in terms of this section,
in respect of any prior year of assessment.
[Subsection (2) amended by section 26(1) of Act 31 of 2013, by section 18(1) of Act 17 of 2017, by section 24(1) of Act 23 of 2018, by section 14(1)(c) of Act 34 of 2019 and by section 12(1)(d) of Act 23 of 2020 effective on 1 March, 2021]
[Section 10C inserted by section 21(1) of Act 22 of 2012 and amended by section 14(1)(a) of Act 34 of 2019 effective on 1 March, 2020 and applicable in respect of any contributions made to a provident or provident preservation fund in determining the taxable annuity received during any year of assessment from such fund in relation to annuities received on or after 1 March, 2020]