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How do I report an amount that SARS treats as non-taxable on my ITR12?
How do I report an amount that SARS treats as non-taxable on my ITR12?
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Direct answer
Report an amount as non-taxable only after confirming why it is non-taxable, what evidence supports that treatment, and which current ITR12 field applies to your return. A payer description, a bank-statement label, a missing IRP5 or the fact that a payment was not withheld from does not establish its tax classification.
SARS updates return guides and return screens. The 2026 Filing Season materials confirm that current ITR12 guidance should be used. Start with the legal and factual character of the payment, then use the current return flow. Do not start with a remembered source code or a field from an old return.
What this means in practice
Identify the payment carefully. Ask who paid it, why it was paid, what period it relates to, whether it replaces income, and whether any certificate or contract explains it. A refund, reimbursement, gift, capital receipt, pension payment, foreign amount, employer benefit and investment distribution can all appear as bank credits, yet their tax treatment may differ.
Build an evidence note for every material item. It should record the date, payer, amount, currency, description, supporting document and proposed tax treatment. Attach the payer letter, contract, certificate, settlement agreement, investment statement or correspondence. If the amount is connected to an earlier payment, cross-reference the original entry and assessment.
Check prepopulation but do not be directed by it. SARS explains that some information can be prepopulated and refreshed through eFiling. Prepopulated data can be incomplete, duplicated or require clarification. A field that is blank does not prove the amount is exempt, and a figure that appears on a certificate should not be deleted merely because you believe it is non-taxable.
Use plain documentation. If a payer document is unclear, request an amended certificate or a signed explanation rather than creating your own label. For a foreign payment, retain an English explanation or translation, the exchange-rate working and foreign tax records. This makes it possible to distinguish an amount that is non-taxable from an amount that must be declared but receives a separate relief or credit.
Step-by-step
- Identify the legal and factual reason for the payment.
Record the payer, purpose, dates and relevant agreement or certificate.
- Gather source evidence.
Keep the original certificate, correspondence, bank record and any calculation. A bank record should corroborate, not replace, the source document.
- Check the current ITR12 process.
Answer the return questions accurately so the relevant containers appear. Read the current labels before entering an amount.
- Reconcile all related entries.
Compare the amount to IRP5, IT3, investment, payroll and prior-year records where applicable. Investigate duplicates and omissions.
- Retain a treatment note.
State the evidence and why the entry was treated in that way. Keep it with the submitted return and assessment.
- Escalate uncertainty.
Obtain advice if the payment is material, unusual, foreign, compensation-related or connected to a prior tax claim.
Documents and records to keep
- Payer certificate, agreement, correspondence and payment confirmation.
- Bank statement, reconciliation and currency-conversion working.
- IRP5, IT3 or other third-party certificates.
- Current ITR12 screenshots or return extracts where useful.
- Submitted return, assessment and written tax advice.
Important limits and exceptions
This article does not classify a specific payment or provide a tax exemption opinion. Non-taxable, exempt, excluded, deductible and credited are not interchangeable terms. The correct ITR12 treatment can depend on the legal basis, taxpayer status, period and related documents.
Do not invent a source code, change a certificate amount without evidence or omit an amount merely because it is not prepopulated. If SARS later requests evidence, the strongest response is a consistent schedule with the underlying documents.
When to get tailored advice
Seek advice for severance, foreign receipts, trust distributions, settlement payments, capital transactions or large reimbursements. TaxProof can organise the evidence and return schedule for review.