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HOW DOES LOWERING OF THE NON-CONCESSIONAL (POST-TAX) CONTRIBUTIONS CAP AFFECT YOU?

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24
May

The non-concessional contribution is also known as after-tax contributions. After-tax contributions are super contributions for which an individual or employer hasn’t claimed a tax deduction. Non-concessional contributions are after-tax contributions which include spouse contributions and contributions made under the super co-contribution scheme.

Previously the non-concessional contributions cap was $180,000 and the bring-forward cap was $540,000. But new non-concessional contributions cap is $100,000 and the maximum bring-forward cap is $300,000 which will be applicable from 1 July 2017. Individuals with a balance of $1.6 million or more will no longer be eligible to make a non-concessional contribution.

Non-concessional contributions are not subject to tax. Means, previously you can contribute up to $180,000 which are not subject to tax. Now with the lower contribution cap, you can’t contribute more and if your non-concessional contribution is more than the cap, then you may have to pay 49% of tax.


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