In terms of the South African Income Tax Act, only bad debts that have been included in the taxpayer's income in the current or prior years of assessment can be claimed as a deduction.

1. Bad debts from customers: This is likely to be a deductible expense as it is generally income that has been included in the taxpayer's income in the current or prior years of assessment. Therefore, the full amount of R74,000 can be claimed as a deduction.

2. Bad debts from a loan to a supplier: This is not likely to be a deductible expense as it is not income that has been included in the taxpayer's income in the current or prior years of assessment. Therefore, the amount of R98,000 cannot be claimed as a deduction.

So, the total deduction available for tax purposes to Ngwenya (Pty) Ltd for the 2024 year of assessment ending 29 February 2024 is R74,000.

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In terms of the South African Income Tax Act, only bad debts that have been included in the taxpayer's income in the current or prior years of assessment can be claimed as a deduction.

1. Bad debts from customers: This is likely to be a deductible expense as it is generally income that has been included in the taxpayer's income in the current or prior years of assessment. Therefore, the full amount of R74,000 can be claimed as a deduction.

2. Bad debts from a loan to a supplier: This is not likely to be a deductible expense as it is not income that has been included in the taxpayer's income in the current or prior years of assessment. Therefore, the amount of R98,000 cannot be claimed as a deduction.

So, the total deduction available for tax purposes to Ngwenya (Pty) Ltd for the 2024 year of assessment ending 29 February 2024 is R74,000.

Knowee AI · Accepted Answer

In terms of the South African Income Tax Act, only bad debts that have been included in the taxpayer's income in the current or prior years of assessment can be claimed as a deduction.

1. Bad debts from customers: This is likely to be a deductible expense as it is generally income that has been included in the taxpayer's income in the current or prior years of assessment. Therefore, the full amount of R74,000 can be claimed as a deduction.

2. Bad debts from a loan to a supplier: This is not likely to be a deductible expense as it is not income that has been included in the taxpayer's income in the current or prior years of assessment. Therefore, the amount of R98,000 cannot be claimed as a deduction.

So, the total deduction available for tax purposes to Ngwenya (Pty) Ltd for the 2024 year of assessment ending 29 February 2024 is R74,000.

Ngwenya (Pty) Ltd had the following expenses during the 2024 year of assessment:Bad debts from customers = R74 000Bad debts from a loan to a supplier = R98 000Calculate the deduction available for tax purposes to Ngwenya (Pty) Ltd for the 2024 year of assessment ending 29 February 2024.

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