CONFIDENTIAL

FINAL EXAMINATION

COURSE : PERSONAL TAXATION

COURSE CODE : PTX1033

DURATION : 3 HOURS

INSTRUCTIONS TO CANDIDATES:

1. This question paper consists of FOUR (4) questions

2. Please check to make sure that this examination pack consists of:
i. The Question Paper
ii. Appendices – 1) Appendix 1: Tax Rates of Chargeable Income
2) Appendix 2: Capital Allowances
3) Appendix 3: Real Property Gain Tax Rates
4) Appendix 4: Reliefs

3. The answers must be in handwriting. Please write your answers using a ball-point pen
on foolscap papers. The answer need to be submitted to your respective lecturer either
using:

i. Scan and submit the answer (in PDF) through OLES (Online Learning System) /
Google Classroom or any other medium OR,

ii. Scan and email the answer (in PDF).

4. Plagiarism, copying and cheating will not be tolerated where no marks will be given and
disciplinary actions can be taken.

MYKAD NO : _____________________________________________________
ID. NO. : _____________________________________________________
LECTURER : _____________________________________________________
SECTION : _____________________________________________________

DO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO

The question paper consists of 11 printed pages

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SEPT2021/D/PTX1033

ESSAY

1. (25 points)

a.
i. RM 30,000 incurred on preparing site to install equipment which was acquired under a
3-year lease. Determine (with reasons) whether the expenditure incurred entitle to
claim capital allowance or not. (4 points)

ii. Compute the qualifying plant expenditure for a machine costing RM 80,000 with cost of
preparing site RM 8,000. (3 points).

iii. State THREE (3) conditions where the initial allowances will be provided. (3 points)

b.
Encik Fiqran started business on 1 July 2016. He prepares his business accounts on 30th
June annually. The following are detail of the assets owned by the business:

A vehicle (Toyota Altis) was provided for the General Manager and it was not licensed
for transportation of goods or passengers commercially. The car was purchased on 1st
January 2019 at RM 138,000.

Machinery was bought on 10 November 2017 with the cost of RM 75,000. The cost of
installation the machine was RM 15,000 and the cost of preparing the site to install the
machine was RM 12,000. On 1 January 2020 the machine was traded in with another
machinery costing RM 60,000. The trade in value for the old machinery was RM 35,000.

On September 2019, an automatic slicer machine and a fax machine were bought at
RM 40,000 and RM 6,000 respectively. On 25 May 2021, he then sold the fax machine
for RM 3,500.

Required:
Compute capital allowance, balancing allowances or charges (if any) for the assets
above for all the relevant years of assessment up to YA 2021. (15 points)

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2. (20 points)

Haqeem incurred stamp duty of RM 5,000 and legal fees of RM 3,500 to purchase an acre of
land in Sepang. The land worth RM 250,000 was acquired on 1 June 2017. He later spent
RM 70,000 to construct a 600 square feet residential property on the land.

In October 2018, Haqeem successfully instituted legal action against the neighbour for
invasion of his property and received compensation of RM 30,000.

In year 2021, Haqeem appointed a real estate agent to find a buyer of that property. The
land was sold to Zain for RM 500,000 and they signed the hire purchase agreement on 1
March 2021. Haqeem paid RM 8,500 commission to the real estate agent. He also pays
RM 1,500 for valuation fees upon disposal.

Required:
a. Compute the chargeable gain subject to real property gains tax (RPGT) and the RPGT
for the year of assessment 2021 arising from Haqeem’s disposal of the land. (10 points)

b. State FIVE (5) circumstances where the disposal price is deemed at market value.
(5 points)

c. State FIVE (5) definitions of “Land” as prescribed in s 2 of the RPGT Act. (5 points)

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3. (30 points)

a.
i. State THREE (3) conditions need to be fulfilled for the business income to be taxed
in Malaysia. (3 points)
ii. List TWO (2) examples of income for business. (2 points)

b. Danish Zakuan owned a supermarket under the name Mesra Supermarket. The
following is the Statement of Comprehensive Income for the year ended 31
December 2021:
RM RM
Sales 460,500
Less : Cost of goods sold 1 (123,700)
Gross profit 336,800
Add: Other Income 2 17,900
354,700
Less : Expenses
Rental 3 58,200
Utilities 4 16,800
Salaries, Bonus & EPF 5 73,286
Medical 6 3,540
Bad debt 7 6,620
Depreciation 4,210
Entertainment 8 4,400
Repair 9 26,300

(193,356)
Net Profit 161,344

Notes to the accounts:

1. Cost of goods sold included:

A stock worth for RM 2,900 taken by Danish Zakuan for his owns use. The market
value for the stock is RM 3,600. The drawing has been recorded.

2. Other income comprise of:

Interest charged on trade debtors for late payment RM 5,900

Bad Debts recovered from the loan given to employees RM 4,600
Compensation received from suppliers due to late delivery RM 7,400

3. Danish Zakuan used the upper level of the premise as storage for the inventories
and the lower floor as sales department.

4. Utilities are fully for business purposes.

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5. Salary, bonus and EPF consists of the following:

Salary Bonus EPF

RM RM RM
Danish Zakuan 25,200 2,100 4,488
Delisha Uzma 18,000 1,500 3,405
Danial Isma (disable) 14,400 1,200 2,993

6. One third (1/3) of the medical expenses were used for Danish Zakuan’s family
medical treatment.

7. Bad debt

Trade debt written off RM 2,690

General bad debt RM 3,280
Bad debt from the loan given to Danish’s relatives RM 650

8. Entertainment expenses consist of the following:

Entertainment expenses to entertain clients RM 3,680

Discount voucher given to customers RM 720

9. Repair

Repair and maintenance costs on business premises RM 7,300

Renovation of business premises RM 19,000

10. Other information are as follow:

Capital allowance RM 11,500

Balancing allowance RM 3,200

Required:

Starting with net profit before tax, compute the statutory business income of Danish Zakuan
for the year of assessment 2021. (Indicate 'nil' or '-' in the appropriate column for any item/s
that does not require any adjustment). (25 points)

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4. (25 points)

a. Define the meaning of the following terms:

i. Child (3 points)
ii. Disabled person (2 points)

b. Encik Din work as an Engineer since 1990 with Royal Malaysia Air Force (pension
scheme). His wife, Puan Na is a kindergarten teacher and owned ‘ABC Kids Centre’ that
located at Besut,Terengganu. Both of them are tax resident in Malaysia for year of
assessment 2021.

They are blessed with six children:

Hanim : 26 years old, PhD student in Sapienza University of Rome, Italy

Hafiz : 24 years old, , studying in Laiden University, Netherland
Hazim : 24 years old, studying in Aarhus University , Denmark

Halimi : 18 years old, study at UMT, Terengganu and being confirmed to

have hearing disability from Welfare Department

Hamiza : 13 years old schooling at Sekolah Seri Puteri, Kuala Lumpur

Hazira : 5 years old attending preschool at MNK Preschool

The following are the information related to their income and expenses for basis year of
2021:

En Din:
1. Gross monthly salary RM 15,000.
2. He received a royalty from writing a book on motivation RM 35,000 and musical
composition RM 18,000.
3. Encik Din purchased an apartment located at Damansara on July 2020, which was
rented out since on 1 March 2021. Below are the information related to apartment:

RM
Monthly rental 1,500
Non-refundable deposit 1,500
Refundable deposit 3,000
Quit rent 800
Advertisement – 1st tenant 200
Repair of toilet accessories 1,100
Fire insurance 650

Puan Na
Information regarding her business for year 2021 are as follows:
RM
Adjusted Income 40,000
Capital Allowance 9,600
Balancing charge 1,900
Unabsorbed loss brought forward from 2020 2,300

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Additional information:
1. Encik Din claimed relief for all children except for Hazira.
2. Purchased sport equipment RM 400, subscribe magazine RM 1,200 and paid gym
membership RM500 by Encik Din while Puan Na bought netbook RM 3,200.
3. Puan Na made cash donation of RM 3,000 to Terengganu State Library. Encik Din
donated cash worth RM 7,000 to Adni Yatim Centre (approved institution).
4. Encik Din and Puan Na spent RM 2,700 and RM 3,100 respectively on medical
Insurance.
5. En Din bought a hearing aid costing RM 2,900 for Halimi.
6. Life insurance premiums were RM 1,700 for En Din and Puan Na RM 1,960.
7. En Din deposited RM 7,200 into SSPN for his children.
8. RM 2,100 education insurance premium paid by En Din
9. Puan Na paid kindergarten fee of RM 1,500 per year.
10. Puan Na spent RM 7,100 for her parent medical expenses and En Din paid medical
expenses for his parent RM 5,800. However, he only can produce RM 4,700 receipt.
11. Encik Din paid zakat RM 10,000.
12. Both elected for separate assessment.

Required:
Compute the income tax payable by Encik Din and Puan Na for the year of assessment 2021.
(20 points)

END OF QUESTION PAPER

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