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Asked on 2010-05-17 13:26 by: Zenon
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If I put money into a 12 month fixed deposit (that happens to span more than one tax year), am I only liable to pay tax on interest earned upon maturity (assuming interest is paid annually)? I was previously advised that the bank would issue an IT3B certificate for interest accrued from the first day on which I deposited the money up to the end of February (i.e. the first tax period) only, but upon requested the certificate for this from the bank I was told this is not actually the case. Could someone please advise?
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Answered on 2010-05-17 17:08 by: liz status: Comfy ( $467 000 )
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Hi
If the bank doesn’t issue you with an IT3B for the portion of the interest earned over the first few months of your fixed deposit, the interest probably contractually only accrues to you at the end of the 12 month term. The bank will therefore, in all likelihood, only show your interest amount to SARS during the 2010/2011 year.
If that is the case, it doesn’t make sense for you to declare any of the interest during the 2009/2010 income tax year.
If the bank doesn’t issue you with an IT3B for the portion of the interest earned over the first few months of your fixed deposit, the interest probably contractually only accrues to you at the end of the 12 month term. The bank will therefore, in all likelihood, only show your interest amount to SARS during the 2010/2011 year.
If that is the case, it doesn’t make sense for you to declare any of the interest during the 2009/2010 income tax year.
