Section 24I(4) of the Income Tax Act was introduced in 2017. Section 24I(4) provides relief on a foreign bad debt, held on capital account, that is written off by a South African taxpayer by reversing previous unrealised exchange gains and losses on the debt written off
In terms of section 24I(4) the taxpayer has to deduct from income current and previous exchange gains and include in income current and previous exchange losses, which is calculated with reference to the balance of the debt which is written off. Exchange differences on the realised portion of the debt are not taken into account under section 24I(4).
