LECTURE 4

Separate/Combined
Assessment
&
Personal Taxation
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 Tax Reliefs for Resident Individual
YA 2021

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 Individual Tax Rebate [s6A]
Income Tax Rebates for Resident Individual with Chargeable
Income less than RM35,000

No. Tax Rebate Year of Assessment 2009

Onwards RM
(a) Separate Assessment
Wife 400
Husband 400
(b) Combined Assessment
Wife 400
Husband 400
Total 800
(c) Assessment Where Husband Or Wife Does
Not
Has Any Total Income
Wife 400
Husband 400 5
Total 800
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 Other Tax Rebates for Resident Individual

Tax Rebate RM
Zakat , fitrah or any other Subject to the maximum of tax
Islamic religious dues payment charged
of which is obligatory and paid
in the basis year.
- s6A(3)

Where the total rebates exceed the income tax charged, the
excess shall NOT be carried forward to set-off against future tax
liabilities. - s6A(4)
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 Separate Taxation or Combined Assessment ??

 An individual or his wife may elect in writing that his

or her total income shall be aggregated with the total
income (if any) of her husband or his wife for a year of
assessment.
 If the husband or wife is non-resident for the basis year
of a YA, he or she may elect for combined assessment
only if he or she is a citizen.
 Election shall be made in a return to the DG of IRB,
which is on or before 30 April to 30 June following the
YA.
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 Separate Taxation or Combined Assessment ???

Separate taxation of a husband’s or wife’s earning is

automatic, where there is no election made by an
individual or their spouse, their income shall be
assessed separately as two individual taxpayers.

Which is better?
Separate taxation normally shows a lower tax liability
as compared to combined assessment.

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 Example
Harrison and Helen married in 2018, provide you with
details of their income for the year ended 31 December
2021 as follows:

Harrison Helen
(RM) (RM)
Total income 46,000 18,000
Employees provident fund (EPF) 5,000 4,000

Compute the tax payable if:

a) Harrison’s wife elects for separate assessment; and
b) Harrison elects for combined assessment.

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 Combined
Ha r r i so n Helen Assessment

Total i n co me 46,000 18,000 64,000

Per so n al relief (9,000) (9,000) (9,000)
H u s b a n d o r wi fe relief - - (4,000)
EPF (4,000) (4,000) (4,000)
Ch ar ge ab l e i n c o m e 33,000 5,000 47,000

I n co m e tax ch a rge for YA

2021 540 - 1,560
Tax rebates for
ch argeabl e i n co m e ≤ (400) (400) Nil
RM35,000
Tax paya bl e 140 -
1,560 10

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 Proforma Tax Computation
Mr Example
Income Tax Computation for Year of Assessment 2021
RM RM
Section 4(a) Business income
Business 1 100,000
Business 2 50,000 150,000

Section 4(b) Employment income

Section 13(1)(a) 60,000
Section 13(1)(b) 10,000
Section 13(1)(c) 5,000
Section 13(1)(d) 5,000
Section 13(1)(e) 5,000
Gross employment income 85,000
Less: Allowable expenses
Travelling expenses for official duties (10,000)
Entertainment expenes for customers (5,000)
Professional subscription - MIA (250) 11
Statutory income from employment 69,750

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 Proforma Tax Computation
Section 4(c) Dividends, interest or discounts 10,000

Section 4(d) Rents, royalties or premiums

Rent received 12,000
Less: Outgoing expenses
Assessment (800)
Quit rent (200)
Repairs and maintenance (1,800)
9,200
Royalties 5,000 14,200

Section 4(e) Pensions, annuities or other periodical payments 5,000

Aggregate income (AI) 248,950

Less: Adjusted loss 25,000
Approved donation (restricted to 10% of AI) 12,000 (37,000)
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Total income 211,950

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 Donation and Gifts

a) Gift of money to approved institution or organization.

b) Contribution for approved sports activity and project of
national interest approved by the relevant ministry.
Maximum deduction for items (a) & (b)
shall not exceed 10% aggregate income.
c) Gift of medical equipment for a health care facility,
maximum RM20,000.s44(10)…individual only
d) Gift of money for library facilities that are accessible to the
public, libraries of schools and institutions of higher
education, maximum RM20,000.

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 Donation and Gifts

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 Proforma Tax Computation
Total income 211,950

Less: Tax reliefs

Self 9,000
Spouse 4,000
Child 2,000
Life insurance 3,000
EPF 4,000
Lifestyle (Purchase of new computer RM2,500 + 3,000 (25,000)
Book and magazines RM600)
Chargeable income 186,950

Income tax on first RM100,000 10,700

Balance of RM86,950 @ 24% 20,868
31,568
Tax rebates NIL
Zakat (1,500)
Tax payable 30,068
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 Thank You

Practice makes perfect , be proactive

and do ask questions in tutorial class!!!

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