QUESTION: MAKE A WRITE UP ON EXEMPTIONS AS STIPULATED BY THE INCOME TAX ACT -------------------------------------------------
Tax Exemptions are a deduction allowed by the law to reduce the amount of income that is subject to tax, these exemptions come in many forms but what they have in common is they reduce or entirely eliminate tax obligations. These exemptions can be categorized into two, exemptions based on the identity of the receipt and exemptions based on the nature of income .The amounts which enjoy exemption from income tax by reason of the identity or character of their recipient include:income and accruals from Public utilities, etc. (para 1) The income of local authorities, the Reserve Bank of Zimbabwe, the Zambezi River Authority, the Natural Resources Board and the Post Office Savings Bank .In addition they are Non-profit-sharing bodies(para 2)Bodies which for the most part fall within such categorization, and which are exempt, these include: agricultural, mining and commercial societies not operating for the pecuniary benefit of the members. This would include the various show societies, etc.;approved benefit funds, pension funds (see 10.22), building societies, friendly societies and medical aid societies;clubs, societies, institutes and associations which are organised and operated solely for social welfare, civic improvement, pleasure,recreation, or advancement or control of any profession or trade; and cannot, under their constitutions, distribute their profits to their members, except as bona fide remuneration for services;and religious, charitable and educational institutions of a public character and (see The Endeavour Foundation and UDC Ltd v COT (1995) 57 SATC 297) trusts of a public character.The exemption in relation to charitable and educational institutions of a public character may apply not only to their investment income but also to profits from the rendering of services and from sales of goods: ITC 1565 (1994) 56 SATC 18 and...
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