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7. 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

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7. 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 Less: Allowable expenses Net loss Adjusted income 122,000 (130,000) (8,000) Nil 12,000 (16,000) (4,000) 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: (2) Details of her business income for YA 2019 are: N RM Adjusted income 68,000 Capital allowances for current year 3,000 (3) Her rental income and expenses for YA 2019 comprises: RM 12,000 Gross rentals Expenses Insurance Interest expense 1,000 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: Purchase of a computer Purchase of books Payments to an approved private retirement scheme Maintenance of the Misha, including schooling Norman and Sarah have agreed that Sarah would claim the child relief for Milan. The couple elect for separate tax assessment RM 5.000 1.200 5.500 3.100 Required: Compute the income tax payable for the year of assessment 2019 by: a) Norman [13 marks) b) Sarah [17 marks]

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