Income Tax Act, 1962 (Act No. 58 of 1962)

Chapter II : The Taxes

Part I : Normal Tax

24. Credit agreements and debtors allowance
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(1)Subject to the provisions of section 24J, if any taxpayer has entered into any agreement with any other person in respect of any property the effect of which is that, in the case of movable property, the ownership shall pass or, in the case of immovable property, transfer shall be passed from the taxpayer to that other person, upon or after the receipt by the taxpayer of the whole or a certain portion of the amount payable to the taxpayer under the agreement, the whole of that amount shall for the purposes of this Act be deemed to have accrued to the taxpayer on the day on which the agreement was entered into.

[Section 24(1) substituted by section 17(1) of the Income Tax Act, 1997 (Act No. 28 of 1997) - effective 1 January 1988]

 

(2)In the case of such an agreement, other than a lay-by agreement as contemplated in subsection (2A), in terms of which at least 25 per cent of the said amount payable only becomes due and payable on or after the expiry of a period of not less than 12 months after the date of the said agreement, the Commissioner, taking into consideration any allowance the Commissioner has made under section 11(j), may make such further allowance as under the special circumstances of the trade of the taxpayer seems to the Commissioner reasonable, in respect of all amounts which are deemed to have accrued under such agreements but which have not been received at the close of the taxpayer's accounting period: Provided that any allowance so made shall be included as income in the taxpayer's returns for the following year of assessment and shall form part of that taxpayer's income; and

[Section 24(2) substituted by section 13(1)(a) of the Taxation Laws Amendment Act, 2022 (Act No. 20 of 2022), Notice No. 1541, GG47826, dated 5 January 2023 - deemed to have come into operation on 1 January 2023 ((section 68(1) and (2) of the Taxation Laws Amendment Act, 2023)]

 

(2A) In the case of a lay-by agreement as contemplated in section 62 of the Consumer Protection Act, 2008 (Act No. 68 of 2008), the Commissioner may make an allowance in respect of all amounts which are deemed to have accrued under such agreement but which have not been received by the end of the taxpayer’s year of assessment.

[Section 24(2A) inserted by section 13(1)(b) of the Taxation Laws Amendment Act, 2022 (Act No. 20 of 2022), Notice No. 1541, GG47826, dated 5 January 2023 - comes into operation on 1 January 2023 and applies in respect of years of assessment ending on or after that date (section 13(2))]

 

(2B) Any allowance made under subsection (2A) shall be included in the income of that taxpayer in the immediately following year of assessment.

[Section 24(2B) inserted by section 13(1)(b) of the Taxation Laws Amendment Act, 2022 (Act No. 20 of 2022), Notice No. 1541, GG47826, dated 5 January 2023 - comes into operation on 1 January 2023 and applies in respect of years of assessment ending on or after that date (section 13(2))]

 

 

(3)[Section 24(3) deleted by section 31 of Revenue Laws Amendment Act, 2005 (Act No. 31 of 2005)]

 

(4)[Section 24(4) deleted by  section 31 of Revenue Laws Amendment Act, 2005 (Act No. 31 of 2005)]

 

(5)[Section 24(5) deleted by  section 31 of Revenue Laws Amendment Act, 2005 (Act No. 31 of 2005)]

 

(6)[Section 24(6) deleted by section 31 of Revenue Laws Amendment Act, 2005 (Act No. 31 of 2005)]