Income Tax Act, 1962 (Act No. 58 of 1962)Chapter II: The TaxesPart I : Normal Tax7D. Calculation of amount of interest |
Where it must be determined, for the purposes of this Act, what amount would have accrued or been incurred as interest in respect of any loan, debt, advance or amount of credit provided to a person or an amount owed by a person had that interest accrued or been incurred at a specific rate of interest, that amount must be determined—
| (a) | without regard to any rule of the common law or provision of any Act in terms of which— |
| (i) | the amount of any interest, fee or similar finance charge that accrues or is incurred in respect of a debt may not in aggregate exceed the amount of that debt; or |
| (ii) | no interest may accrue or be incurred in respect of a debt once the amount that has accrued or been incurred as interest is equal to the amount of that debt; and |
| (b) | as simple interest calculated daily. |
[Section 7D substituted by section 10 of the Taxation Laws Amendment Act, 2018 (Act No. 23 of 2018), GG 42172, dated 17 January 2019]