QUESTION $3(20$ Marks$)$

Ava Mdluli $($aged $38)$ operated a clothing store in East London as a sole proprietor during the $2024$ year of

assessment. The profit before tax amounts to R$405625,$ before taking the following information into

account:

$1)$ Bad debts written off consist of the following:

Trade debtors $-$ R$12000$

Loan to employee X $-$ R$15000$

Employee X has left the employment and there is no trace of him.

$2)$ Penalties and interest of R$5000$ paid to SARS relating to late submissions of tax returns.

$3)$ Ava was robbed at gunpoint on $23$ January $2024.$ The loss as a result of the robbery amounted to

R$3500.$

$4)$ Ava paid R$22000$ for accounting fees.

$5)$ Rental of R$45000$ was paid for a security system that will be used for the period $1$ March $202430$

September $2024.$

$6)$ Ava paid R$38600$ towards her pension fund.

Required:

$3\mathrm{.}1$ Calculate Ava Mdluli$$s taxable income for the $2024$ year of assessment. Hint: start your calculation with

the profit before tax figure that is given.

$(12$ Marks$)$

$3\mathrm{.}2$ Ava is considering purchasing a piece of land adjoining her business premises to use as parking for her

clients for an amount of R$350000.$ Advise Ava on whether the cost of the land would qualify as an allowable

deduction.

$(4$ Marks$)$

$3\mathrm{.}3$ Discuss which pensions are exempt from tax. $(4$ Marks$)$