SOURCE CODE DESCRIPTIONS IRP5 code 3908

Lump sum codes

In the electronic file IRP5 code 3908 is used for:Exempt Policy Proceeds (Excl). Proceeds paid from an employer owned insurance policy exempt i.r.o. section 10(1)(gG) of the Income Tax Act – where the employer premiums were included as a taxable benefit in the employee’s income since the date contemplated in section 10(1)(gG) – see explanation under code 3907 (3957)– proceeds paid from an employer owned policy. Income Protection Insurance policy lump sums which are exempt i.r.o. section 10(1)(gI) of the Income Tax Act. Applicable from 1 March 2015. Surplus apportionments on or after 1 January 2006 and before 1 March 2012 paid in terms of section 15B of the Pension Funds Act of 1956. Applicable from 2006 year of assessment. Surplus apportionments must only be included until 2012 YoA.

The prescribed Length of IRP5 code 3908 in the electronic file is: N15

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax