Question

5. Norman and Sarah who are married, are both Malaysian tax residents. They have an eight-year-old daughter, Misha. Details of Norman ’s employment income and amounts expended for the year of assessment (YA) 2018 are as follows:

1. Salary for the year of RM60,000.
2. Performance incentive of RM2,000 for YA 2019, paid on 3 March 2020.
3. The use of a new car costing RM40,000 provided to him for the entire year without fuel.
4. Social security contributions (SOCSO) of RM8,000.
5. The minimum employment provident fund (EPF) contributions of 11% were deducted from his salary.
6. A cash donation of RM25,000 made to Perpustakaan Negara.
7. Sarah operates sole proprietorship cake house business. She also rents out a property located in Malaysia which she holds for investment purposes.

The following details relate to Sarah in respect of Year of Assessment (YA) 2018 and YA 2019:

1. Extracts from her tax computation for YA 2018 are as below:

	Business	Rental
	RM	RM
Gross income	122,000	12,000
Less: Allowable expenses	(130,000)	(16,000)
Net loss	(8,000)	(4,000)
Adjusted income	Nil	Nil
Capital allowances carried forward	3,400

None of the losses were utilised during YA 2018.

2. Details of her business income for YA 2019 are:

	RM
Adjusted income	68,000
Capital allowances for current year	3,000

3. Her rental income and expenses for YA 2019 comprises:

	RM
Gross rentals	12,000
Expenses
Insurance	1,000
Interest expense	7,900
	8,900

4. She received interest income of RM900 (translated from Singapore Dollars) from a fixed deposit placed in Maybank Singapore.

5. Payments made by Sarah in 2019 were:

	RM
Purchase of a computer	5,000
Purchase of books	1,200
Payments to an approved private retirement scheme	5,500
Maintenance of the Misha, including schooling	3,100

Norman and Sarah have agreed that Sarah would claim the child relief for Milan.

The couple elect for separate tax assessment.

Required:

Compute the income tax payable for the year of assessment 2019 by:

1. Norman
2. Sarah

Answer 1