Question

Documenti - Word (Product Activation Failed) References Mailings Review View Question 2 (Marks: 30) Mr. Khumalo is the financial manager of Hello Group Ltd. He started working at the company on 1 April 2020, after being retrenched six months earlier. He is currently 42 years old and unmarried. The following information relates to his income and expenditure for the year of assessment ended 28 February 2021: 1. Mr Khumalo received a monthly basic salary of R23 500 and a monthly entertainment allowance of R2 500 2. Mr Khumalo was granted the right of use of a company car for the period 1 April 2020 until 31 August 2020. The determined value of the car at that date was R540 000 and the car was subject to a maintenance plan. Mr. Khumalo had to bear the cost of all fuel used for private purposes, and the cost of insuring the vehicle. During this time, he travelled 25 200 kilometres in total, of which 11 400 kilometres related to business travel. The fuel cost amounted to R18 000 and the insurance cost amounted to R6 000 3. The company provided Mr Khumalo with the option to buy the car at its retail value less 10% discount on 1 September 2020. The retail value of the car was R480 000 on 1 September 2020. Mr Khumalo exercised this right and paid the company the agreed purchase price of R432 00 his is currently the only car that he owns 4. From 1 September 2020, he received a travel allowance of R20 000 a month. Mr Khumalo does not keep accurate records of actual costs incurred. He kept a logbook and travelled 17 500 business kilometres during the period. The odometer reading of the car was 32 400km on 1 September 2020, and 56 900 km on 28 February 2021 5. His employer provided him with a laptop of R18 000 to be used for business purposes 6. Mr. Khumalo contributed to a medical aid fund from the date he was employed. He and his daughter are the only members on the medical aid fund 0.2.1 Calculate Mr Khumalo's net tax due/trefundable) for the year of assessment ending 28 February 2021 Round your answers to two decimal places Show all amounts even if the effect is zero as marks will be allocated for these items R1

Answer 1

o Solution Calculation of Mr. Khumalas net tax due Chou the A:y ending 28 Feb,2021) (April to Feb= Il months) R Basic salary 2,58500 27,500 Entertainment allowance (2500x 12) Meet ose car porquilite 3.000 Owned motor care 48.000 Travel allowance 34.284 Laptop Nel 78,000 G.T.I. 371, 284 Less: Deductions under doc to sou Comedical and fund amount i Ng not given ) Total taxable income 371, 284 NOTE: Individual taxpayers with set taxable Ancome of up to 5latiha will continue to pay zero tax.

au fully tarable 3184 August working Note: Entertainment allowance of non-government . employees Cay provided by companys ( 1 st April 2010 - 2020) value of car = R540000 The car was used for both private and (Let's amume the cubic capacity of a within 1.6 litres) Value of perquilte (because the expennes are paid by employee) Total porqutite = R600X Sononths ER 3000 business purpose, then e care e 600p.on.

Car bought by Mr. Khumalo from Company Actual cost of mat or caus 480,000 e Refredation @20%) Nil (Year of service Pa not mentioned) (432,000) Taxable amount 48,000 - Paid by employee о 32,400 km Hravel allowance & from 1 september, 2020) Travel allowance = R20.000 pm Reading of car odometer: 1 Befotem bery 28 February = 56.900 km total oefference: 56.900 - 32400 24,500 Kn t of which, 17.500 Km — business use . ie 71.43% business Total allowance =R20,000 x 6 months R 120.000 Business we = 78:43), of a 20,000 - R 85,716 Personal use = R120,000 - R 85716 R 34,284 Lapipp. coonfactor provided by employer 3 Exempt.