BUDGET PROPOSALS

Tabled by the Minister of Finance on 23 February 2011:
INDIVIDUAL TAX
Tax brackets The tax brackets have been restructured to increase the tax threshold at which the maximum rate is reached to R580 000 (2011 – R552 000). Tax thresholds have been increased for persons under 65 to R59 750 (2011 – R57 000) and for persons 65 to 75 years to R93 150 (2011 – R88 528). An additional tax bracket is to be introduced for persons 75 and over reaching the tax threshold at R104 261.

Interest
Interest earned by natural persons under 65 is exempt up to R22 800 (2011 – R22 300) and persons 65 and over to R33 000 (2011 – R32 000). Foreign interest and dividends are exempt up to R3 700 (2010 – R3 700).

Medical scheme contributions
Monthly tax deductible contributions for a member and first beneficiary have increased to R720 (2011 – R670) and for each beneficiary thereafter to R440 (2011 – R410).

Lump sum on retirement
The tax free portion of a lump sum on retirement is increased to R315 000 (2011 – R300 000).

Rebates
A rebate of R2 000 has been introduced for persons over 75 years.