A common and costly mistake is assuming a withdrawal "frees up" contribution room — it doesn't. If you contribute R46,000 in a year then withdraw R20,000, redepositing it counts as a brand-new contribution against your remaining limits. For anyone using multiple TFSA providers, tracking total contributions across all accounts is essential to avoid the penalty.
Source: SARS
Frequently Asked Questions
Does investment growth inside a TFSA count toward the limits?
No — the limits apply only to the amount of money contributed, not to how much the investment grows; a TFSA balance can lawfully exceed R500,000 through growth alone.
Can unused annual contribution room be carried forward to the next tax year?
No — any unused portion of the annual limit is forfeited at the end of the tax year and cannot be carried over.
Can a person have more than one tax-free savings account?
Yes — but the annual limit applies across all accounts combined, not per account, so contributions to multiple providers must be tracked together.