Are there any limitations to the tax break relating to s10(1)(q) beside the maximum annual salary of R600K per employee and that school fees need to be paid to a registered school either at Grade R to Grade 12 or university level?
Important:
This answer is based on tax law year ending 28 Feb 2017.
Answer:
The only limitations, where the bona fide scholarship or bursary was granted to a relative of such employee, are the ones listed in section 10(1)(q), or (qA) of the Act. The are monetary limits and it is the “remuneration proxy derived by the employee” and not ‘maximum annual salary’. The “remuneration proxy” is defined in section 1(1) of the Income Tax Act. With respect to the other limitation, if not in respect of grade R to grade twelve as contemplated in the definition of ‘school’ in section 1 of the South African Schools Act, 1996 (Act No. 84 of 1996); it depends on the NQF level of the qualification.