Tax benefits for Individuals

Section 18A of the Income Tax Act (Act 58 of 1962)

Section 18A(1) of the abovementioned Act provides for a deduction of donations in the form of cash or certain types of assets made, inter alia, to Public Benefit Organisations (PBOs) approved under section 30(1), provided that the donor is in possession of a valid receipt and  the deduction does not exceed 10% of the donor’s taxable income.

 This means that:

  • Donations in general are liable to taxation at 20%.

  • However, certain donations made to registered and approved organisations are exempt and claimable as tax deductions.

  • The University of Pretoria is an approved institution for purposes of section 18(A) of the Income Tax Act, and donations to this institution are tax deductible in certain instances as noted above (ie registered and approved organisations).

  • Therefore, unconditional donations to the University in cash or in kind (eg material assets), qualify as a tax deductible expense, provided that the donation does not exceed 10% of the donor’s taxable income.

  • In this regard the University in its capacity as recipient usually issues the necessary section 18(A) tax certificate annually, usually during April of any given year.

  • This document will serve as receipt and will entitle the donor to claim a deduction on the relevant tax return by submitting the tax certificate together with associated documentation to SARS before the annual tax submission deadline.

Published by Zama Mthembu

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