Any amount received from a tax free investment is exempt from normal tax (this includes income on the investment as well as any profits arising on disposal of the investment). The following requirements must be met:

• Investment must be owned by a natural person or the deceased or insolvent estate of a natural person
• The investment must be a financial instrument or policy that is administered by any person or entity designated by the Minister of Finance
• Contributions to the investment must be made in cash and are limited to R36 000 (R33 000 before 1 March 2020) per year and R500 000 in total (both in aggregate)

In the event where the R36 000 and R500 000 limits are exceeded, 40% of the excess investment is treated as normal tax payable (the income on the excess part of the investment is, however, still tax free).