A Tax-Free Savings Account (TFSA) in South Africa is one of the most powerful tools for building wealth, as all interest, dividends, and capital gains inside the account are completely exempt from tax. As of March 2026, the annual contribution limit has been raised to R46,000, with a lifetime cap of R500,000.
🔑 Key Features of a TFSA
- Annual Contribution Limit (2026/27): R46,000 (about R3,833 per month).
- Lifetime Contribution Limit: R500,000 (unchanged since 2015).
- Tax Benefits: No income tax on interest, no dividends tax, and no capital gains tax.
- Penalty for Over-Contribution: 40% tax on the excess amount, levied by SARS.
- Withdrawals: Allowed anytime, but withdrawn amounts do not restore contribution room.
- Transfers: You can move your TFSA between providers without losing allowance, provided it’s trustee-to-trustee.