The current annual interest exemption will increase to R22 800 for taxpayers under the age of 65 and to R33 000 for taxpayers aged 65 years and older.
It is also proposed to increase the portion of the exemption applicable to foreign interest and dividends to R3 700 per annum.
As from 1 March 2012 the foreign interest and dividend exemption falls away.
Most Dividends received by individuals from foreign entities are taxable. Interest is exempt where earned by non-residents who are physically absent from SA for 183 days or more per annum and who are not carrying on business in SA.
Comment: This interest exemption encourages a culture of savings and assists retired South Africans who invest in fixed- interest investments. A taxpayer older than 65 will be able to invest R733 333 at 4.55% per annum without paying tax.
Exemptions - Individuals :