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Taxation For Individuals Case Study

The document presents a case study for a Bachelor of Commerce program focusing on Taxation for Individuals. It includes two questions requiring analysis of financial transactions for two individuals, Preeya Naidoo and Peter, detailing their income, expenses, and tax implications for the year of assessment ending February 28, 2024. The first question asks for the impact of Preeya's catering business transactions on her normal tax calculation, while the second question requires the calculation of Peter's tax liability based on his employment income and other financial activities.

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391 views3 pages

Taxation For Individuals Case Study

The document presents a case study for a Bachelor of Commerce program focusing on Taxation for Individuals. It includes two questions requiring analysis of financial transactions for two individuals, Preeya Naidoo and Peter, detailing their income, expenses, and tax implications for the year of assessment ending February 28, 2024. The first question asks for the impact of Preeya's catering business transactions on her normal tax calculation, while the second question requires the calculation of Peter's tax liability based on his employment income and other financial activities.

Uploaded by

nolumafu055
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Case Study

Bachelor of Commerce in Financial Management;


PROGRAMME
Bachelor of Commerce in Accounting

MODULE Taxation for Individuals (Taxation 2A)


YEAR Two (2)
INTAKE January 2025 Semester 1
MARKS 30
QUESTION 1 [10 Marks]
Preeya Naidoo trades as a sole proprietor of a catering business. During the 2024 year of assess the
following transactions took place:

• A loan of R50 000 was taken out from First National Bank to purchase additional ovens and
catering equipment. Total interest of R 4 500 was paid on this loan.
• A loan of R6 500 was taken out from Capitec to pay the rental deposit for a bigger townhouse,
on which interest of R 750 was paid during the year of assessment.
• Dividends of R4 000 was earned from a South African source.
• The total revenue generated from the catering business amounted to R550 000 for the year
ended 28 February 2024.
• Preeya failed to submit her provisional tax returns on time and was fined R500 by SARS.

You are required to:


Explain, with reasons, the impact of each transaction on the normal tax calculation of Preeya Naidoo for
the year of assessment ended 28 February 2024.

QUESTION 2 [20 Marks]

Peter presented you with the following information that relates to the 2024 year of assessment:

• A salary of R350 000 was earned from A1 Traders, where he was employed from 1 March
2023 to 30 November 2023. The total PAYE deducted by the employer amounted to R75 000.
• The total salary earned from Y-Dot Trading, where Peter was employed from 1 December 2023
to 28 February 2024, amounted to R125 000. The accountant deducted a total of R20 000 in
respect of PAYE.
• The HR policy of Y-Dot Trading stipulates that membership to a recognised medical aid is
compulsory. Peter joined FIT-medical aid effective 1 December 2023 at a monthly rate of
R1 500.
• Peter joined a retirement fund effective 1 December 2023 at a monthly fee of R1 000.
• The total interest on investment earned during the year of assessment amounted to R28 800.
• Foreign dividends of R2 000 were received during the year of assessment.
• Peter sold the townhouse he inherited from his grandfather for R850 000 during January 2024.
The total taxable capital gains realised on this sale amounted to R15 000.
You are required to:
Calculate the tax liability of Peter for the year of assessment ended 28 February 2024.

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