Question

Question 3 Mr Hussin, tax resident in Malaysia, provides you with the following information: Year end 31 Dec Year 1 RM Year 2 RM Year 3 RM Business A 64,000 30,000 42,000 55,000 36,000 14,000 40,000 8.000 10,000 5,000 6,000 6,000 Gross business income Allowable expenses Non-allowable expenses Capital allowance (current year) Business B Profit/(Loss) before tax Allowable expenses Non-allowable expenses Capital allowance (current year) Other information: Employment income Dividend income from UK Rental income Zakat paid Monthly Tax Deduction (total for 12 months) Approved donation 150,000 470,000 54,000 12,000 (87,000) 390,000 44,000 10,000 (21,000) 320,000 68,000 16,000 25,000 28,000 33,000 22,000 9,000 5,000 13,000 3,500 1,800 3,000 2,400 8,000 7,000 3,000 8,000 8,000 As a tax resident, Mr. Hussin entitles to self-relief of RM9,000. Assume he is not entitled to other reliefs. Required: Calculate tax payable/tax refund for Mr. Hussin for the years of assessment Year 1 to Year 3. Your answer must be arranged according to Section 4 of the Act.

Answer 1

Question - 3 Year 1 Dr. Hussin calculation of Tax payable/Tax refundable Amount Amount (RM) (RM) Particulars O Business A Gross Business Income (-) Allowable expenses 30000 (42,000) (12000) Note: Capital allowance of 5,000 should be carried forward to further years and can be set off only against Business A income. ® Business B Profit before tax 1,50,000 (+) Non-allowable expenses 54,000 2,04,000 4.1 Capital Allowance (12,000). 192,000 1,92,000 25,000 4,000 2,14,000 3 Employment Income & Rental Income Total Income Note: Business loss of current year can be set off any other income in current year (Less) Relief: Self and dependant (less) Approved donation lower of 2,05,000* 7'/, or 8 Taxable income (9,000) 2,05,000 1,97,000

Calculation of Tax payable On the first 100,000 (97000x24%.) Next 97,000 10,900 23,280 34,180 (21,600) (3,500) 4,080 Tax on Income (-) Tax deducted (1 (-) Zakat paid Tax payable in Year e Year 2 Particulars Business A Gross Business Income Allowable expenses (-) Capital Allowance - current year - Year 1 36,000 (36,000) ( 6,000) (5,000) 8,000 © Business B Profit ((loss) before tax + Non-Allowable expenditure (67000) 44,000 (43,000) Note: Capital allowance of Year 2 of RM 10,000 should be carried forward to year-3 and can be set off against income of Business - B only. ③ Employment Income - Rental Income 28,000 5,000

10,900 23 280 34,180 (21,600) (3,500) 9,080 / Panable income for year-2 is Nil / Business -B loss of RM 2,000 to the extent urxutilised can be carried forward and can be set off only against income of Business The refore, tax refundable for the year-2 is 2,400 x12 - RM 28,800 Amount Amount Year-3 Particulars ② Business A Gross Business Income (-) Allowable expenses A Capital allowance @ Business-B Profit before Tax + Alon-allowable expenditure 64,000 (40,000) (6,000) 35 000 (36,000) (6,000) (5,000) 8,000 18,000 (21,000) 68,000 47,000 - capital allowance Current Year → Year - 2 (67000) 44,000 (43,000) (16,000) (10,000) 21,000 21,000 Total Business Income (-) Business loss of year-2 carried forward 39,000 (2,000) 37,000 33,000 28,000 5,000 ③ Employment Income Dividend Income ( exempt income) ② Rental Income (-) Relief -) Approved donation (83.000-4000)x1) =5,180) Cowey 8000 OY 13,000 83,000 (9,000) 15,180) 68,820

20 1,800 2,635 4,435 Taxable Socome Tax on above - on first 50,000 - Next 18,820 @ 14:1 (-) Tax deducted (3000x12) Tax refundable (36,000) (31,565) Summary Tax payable / (refundable) for My. Hussin in Year - 1 RM 9,080 (Payable) in Year - 2 RM 28,800 (refundable) in Year - 3 RM 31,565 (refundable