Single Section 18A Receipt for Donations
Background
Section 18A(1) allows taxpayers to deduct the full amount of donations made to approved organizations in a year from their income tax. These donations must be legitimate and made to organizations that are approved by the government.
Taxpayers can deduct the total amount of these donations from their taxable income. This can help reduce the amount of tax they owe at the end of the year.
The subtraction of the total amount of genuine donations made throughout the tax year of assessment cannot surpass 10% of the taxpayer's earnings.
Section 18A(2)(a) lists the required information for a valid section 18A receipt. To deduct donations from taxable income, the donor taxpayer needs a section 18A receipt. This receipt must be from an approved organization and have all the necessary information.
Ruling
BGR 70 has verified that a solitary section 18A receipt, adhering to the compulsory data outlined in section 18A(2)(a), given to a donor taxpayer for the total of bona fide donations genuinely paid or transferred by that donor taxpayer to a section 18A sanctioned organisation during a tax year, is permissible.
The total of numerous authentic contributions indicated in individual section 18A receipts should equal the total of authentic contributions indicated in a single section 18A receipt.
A section 18A receipt issued , provided by a section 18A approved entity to a donating taxpayer, must include the required details and a detailed summary of each legitimate donation that constitutes the total of multiple legitimate donations made or transferred by that donating taxpayer during the tax assessment year:
- The date of receipt each genuine donation was received.
- The sum of each legitimate contribution if the contribution was made in cash
- The character and worth of every legitimate non-cash contribution. This will guarantee significant adherence to the stipulations under section 18A.
Validity
BGR 70 is effective from the date it was issued (that is, 16 May 2024) and remains so until it is either revoked, modified, or the corresponding law is altered.
Donations made to entties not qualified in terms of section 18A
If no section 18A Certificate / Receipt is issued then Donations tax will be applicable on donations.
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