REVISION

INDIVIDUAL INCOME TAX PAYABLE

QUESTION 1

Encik Yazid, 54 years old, is Malaysian tax resident. He provides the following information regarding
his income for the basis year 2021.

1. Encik Yazid runs a bookstore, the following are the information regarding his business:

Particulars RM
Adjusted income 112,000
Capital allowance 54,000
Balancing charge 37,000

There was an unabsorbed loss of RM86,000 brought forward from bookstore from the year
of assessment 2020.

2. Income from other sources:

Dividend : RM
JPD Bhd (Single tier) 15,000
Interest :
Received from deposit, Lembaga Tabung 6,000
Haji

Rental : Both houses have been rented House in Taman House in Taman
out since January 2021 Mawar Orkid
RM RM
Annual rental 24,000 25,000
Quit rent per annum 1,400 2,000
Insurance per annum 2,100 -
Advertisement (for second tenant) - 270
Fire insurance - 1,100

3. Royalty received for publication of school text books upon request by the Ministry of Higher
Education amounting to RM21,300.

4. Encik Yazid was hired as a consultant for business proposal in Tabuan Jaya, Sarawak on a
here-day event. He received RM36,000 as consultation fees.

5. Encik Yazid received a honorarium payment of RM2,000 for being a panel speaker in a talk
show programme of SoundFM.

Additional Information:

1. Encik Yazid, has two wives, both tax residents in Malaysia for the basis year 2021. His first
wife, Puan Aina is unemployed after she was diagnosed with a serious disease. Encik Yazid
spent RM7,000 on her medical treatment.

2. His second wife, Puan Mira, is an auditor. She receives a salary of RM4,800 (net) per month,
after the deduction of EPF 11%, RM300 for schedula and RM240 for zakat
3. Encik Yazid and Puan Aina are blesses with two children:
i. Zikri – aged 23, studying full-time in UNITEN, currently undergoing student practical
training with Maju Bhd and earning RM1,000 each month for the year 2021.
ii. Zila – aged 22, studying part-time at Universiti Pertahanan Nasional Malaysia
(UPNM).

4. Puan Mira has a daughter named, Fisha 11 years old from her previous marriage. She and
her ex-husband agreed to share the child’s maintenance.

5. Particulars of payments made during the year are as follow:

Encik Yazid RM Puan Mira RM

Cash donation to Persatuan
Bulan Sabit Merah (approved
organization)
Life insurance for himself
Zakat
10,100 Cash donation to Rakan 1,490
Muda, a project of national
interest approved by
minister
950 Life insurance for herself 1,000
1,800 Skim Simpanan Pendidikan 3,600
Nasional (SSPN) for Fisha
Purchased of tablet 1,500

6. After MCO, on September 2021, Encik Yazid and Puan Mira go to Pulau Langkawi and
incurred RM2,500 and RM1,200 respectively for travelling cost.

Required:
Compute the income tax payable for Encik Yazid and Puan Mira for the year of assessment 2021.

Note:
You should indicate ‘Nil” for which no adjusting entry needed.

(50 marks)

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 CAPITAL ALLOWANCE

QUESTION 1

A.
(i) Paragraph 5 of the public rulling 12/2014, classifies FOUR (4) categories of qualifying
assest which are motor vehicle, general palant and machinery, heavy plant and
machinery and others.

Required :

Classify the following assets into appropriate categories:

Example:

Assets Category
Crane Heavy plant and machinery

i. Elevator
ii. Aircraft
iii. Roller
iv. Photocopier
v. Furniture
vi. Motorized bicycle
(6 marks)

(ii) State the qualifying expenditure under Para 2A and 2C for the used plant & machinery
according to Income Tax Act 1967.
(4 marks)

B. Sonya Flower Enterprise, is involved in manufacturing of vases. It closes its accounts

on 31 December each year. Below are assets owned by the business:

Machinery
A machine was acquired and installed on 1 April 2021 for RM68,000. The cost of
preparing the site for the installation of the machine was RM9,500.

Van JHB 8144

The van was purchased for business purpose on 1 January 2019 at a cost of
RM100,000. On 1 June 2021, it was disposed for RM50,000.

Lorry MBG 7881

The lorry was acquired on hire purchase basis. Below are the details:

RM
Deposit (paid on 1 June 2021) 50,000
Hire purchase amount excluding interest 90,000
Term of repayment 60 months
(First installment is on 1 June 2021)

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Required:

Compute the capital allowance, balancing charge or balancing allowance (if any) for all of the
above assets for the relevant years of assessment up to year of assessment 2021.

(20 marks)

C. Jerneh Sdn Bhd which ends its accounting period on 31 December every year
manufactures and sells various traditional costumes. Due to the rapid development of
the business, the company has decided to increase the company’s investment in
capital as follows:

i. Acquired general machine for RM80,000 on 1 April 2019. In 7 November 2021,

the machine was disposed for RM10,000.

ii. Purchased five (5) units of electronic sewing machine (same model) with the
price of RM15,000 each on 1 May 2020 through a hire purchase agreement.
The hire purchase agreement shows the following information:

a. Advance payment RM15,000

b. Monthly installment RM1,250
c. First installment 1 June 2020
d. Period of installment 5 years
e. Initial allowance rates 20%

iii. Purchased a new Toyota Altis car for the use of its directors for a cost of
RM120,000. The purchase was made on 1 February 2020.

Required:

Calculate the capital allowance, residual expenditure and balancing charges/allowance for
Jerneh Sdn Bhd for the relevant years of assessment up to the year of assessment 2021.
(Show all workings)
(20 marks)

(Total: 50 marks)