Provisional tax is a system that ensures you pay tax during the tax year if you have sources of income that are not taxed by an employer, your pension provider or your investment company. You earn income as a freelancer or independent contractor;You are earning interest or dividends from investments.
You should also register for provisional tax if the South African Revenue Service notifies you that you are a provisional taxpayer.Your taxable income is below the income threshold:R135 150 if you were 65 or older but not over the age of 75 in the March 2021 to February 2022 tax year;Your taxable income from any of these sources in any tax year does not exceed R30 000:
Income paid to you as a freelancer or independent contractor from which Pay As You Earn tax is not deducted;Dividends or foreign dividends paid to you on an investment that is not a tax-free investment or in a retirement fund; Interest paid to you that is not in a tax-free investment or a retirement fund, after you have deducted the annual interest exemptions of:• Your deceased estate is also not liable for provisional tax.• Any retirement fund contributions that are within the annual limits;This article was first published on