BASIS PERIOD FOR

EMPLOYMENT INCOME

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 Basis Period
• W.e.f 1.1.2016, Sec 25(1) ITA
‘employment income when received, shall be treated as gross
income for the relevant period, though the income is related to
prior year or future year.’
• Example
– Tan- manager for Juta Sdn Bhd. received RM 12,000 a
payment for commission which was related to 2017 sales
on 1 Nov 2018.
– The commission is treated as income in year 2018 when
it is received.

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 Allowable Expenses

Wholly and Exclusively

Sec. 33

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 Allowable expenses
• Expenses that are allowed to be deducted from gross
income in coming to the figure of adjusted income
• The expenses must be ‘wholly and exclusively’
incurred in the performance of employee’s duties
• Wholly refers to quantum of the expenditure
• Exclusively refers to motive behind the expenditure
(purposes)

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 ‘wholly and exclusively’
• Expenditure –revenue in nature
• The employee duties cannot be performed without
incurring such expenditure
• Not private or domestic expenditure
• Relates to the current employment
• Employment source must first existed
• Usually required to produce receipts as a
prove/evidence
• Subject to DG satisfaction and approval.

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 Examples of allowable expenses;

• Rent paid by employee to the employer for the enjoyment of

accommodation provided subject to the value of Sec. 13(1)b
and 13(1)c.
– Repair and maintenance cost
– Public rates or premium insurance on the premises
• Traveling expenses
– not for ‘private and domestic’ purposes
– Travelling from office to client premises (proof is needed)
• Entertainment cost to entertain business clients(limited to
amount asses under 13(1)a
• Subscription/Annual fees to professional bodies.

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 Not deductible

• Commission paid to employment agencies

• Travelling expenses – home to office
• Self improvement expenses
• Examination fees
• Professional books and journal
• Clubs subscription
• Cost of clothing
• Text book examples
• 7.8
• 7.9
• 7.10
• 7.11
• 7.12
• 7.13