Category: Section 24 (ITA) – Credit agreements and debtors allowance

Section 24

 

  1. Subsection (1) substituted by section 17 of Act 28 of 1997.

 

  1. Subsection (3) amended by section 6 of Act 108 of 1986 and deleted by section 31 of Act 31 of 2005.

 

  1. Subsection (4) deleted by section 31 of Act 31 of 2005.

 

  1. Subsection (5) added by section 23 of Act 101 of 1990 and deleted by section 31 of Act 31 of 2005.

 

  1. Subsection (6) added by section 23 of Act 101 of 1990 and deleted by section 31 of Act 31 of 2005.

 

  1. Section 24 amended by section 22 of Act 89 of 1969, section 21 of Act 94 of 1983 and section 14 of Act 96 of 1985 and substituted by section 16 of Act 65 of 1986.

Section 24 (ITA) – Credit agreements and debtors allowance

Posted on by admin_kmos

24.    Credit agreements and debtors allowance

 

(1)     Subject to the provisions of section 24J, if any taxpayer has entered into any agreement with any other person in respect of any property the effect of which is that, in the case of movable property, the ownership shall pass or, in the case of immovable property, transfer shall be passed from the taxpayer to that other person, upon or after the receipt by the taxpayer of the whole or a certain portion of the amount payable to the taxpayer under the agreement, the whole of that amount shall for the purposes of this Act be deemed to have accrued to the taxpayer on the day on which the agreement was entered into.

 

(2)     In the case of such an agreement, other than a lay-by agreement as contemplated in subsection (2A), in terms of which at least 25 per cent of the said amount payable only becomes due and payable on or after the expiry of a period of not less than 12 months after the date of the said agreement, taking into consideration any allowance made under section 11(j), there shall be made such further allowance as under the special circumstances of the trade of the taxpayer, as set out in a public notice issued by the Commissioner, is reasonable, in respect of all amounts which are deemed to have accrued under such agreements but which have not been received at the close of the taxpayer’s accounting period: Provided that any allowance so made shall be included as income in the taxpayer’s returns for the following year of assessment and shall form part of the taxpayer’s income.

[Subsection (2) substituted by section 13(1)(a) of Act 20 of 2022 with effect from 1 January, 2023 and applicable in respect of years of assessment ending on or after that date (section 13(1)(a) of Act 20 of 2022 as substituted by section 68(1) of Act 17 of 2023)]

 

(2A)   In the case of a lay-by agreement as contemplated in section 62 of the Consumer Protection Act, 2008 (Act 68 of 2008), the Commissioner may make an allowance in respect of all amounts which are deemed to have accrued under such agreement but which have not been received by the end of the taxpayer’s year of assessment.

[Subsection (2A) inserted by section 13(1)(b) of Act 20 of 2022 effective on 1 January, 2023 and applicable in respect of years of assessment ending on or after that date]

 

(2B)   Any allowance made under subsection (2A) shall be included in the income of that taxpayer in the immediately following year of assessment.

[Subsection (2B) inserted by section 13(1)(b) of Act 20 of 2022 effective on 1 January, 2023 and applicable in respect of years of assessment ending on or after that date]