Mr. Ching was a PRC resident and was employed as a sales manager by Wang Laboratories Limited in Hong Kong. He gave you the following information for the year ended 31 March 2021:

He received an annual salary of $600,000.

He was provided with 2 rooms in a Hong Kong hotel for the period from 1.4.2020 to 30.6.2020. From 1.7.2020 to 31.12.2020, he moved into a flat for which he paid rent, rates and management fee for a total of $43,000 per month. He received a reimbursement from Wang Lab. Ltd. of $40,000 per month. From 1.1.2021 onwards, he moved into another flat which he acquired under joint names with his wife. He continued to receive $40,000 per month from his employer as a housing subsidy.

During the period he lived in the hotel, he was given a meal allowance of $2,000 per month. When he moved into the leased flat, his employer reimbursed him the gas and electricity bills totalling $6,000 for the whole period. The employer also made a contract with a domestic helper who costs $5,000 per month.

Due to his outstanding performance in sales negotiations, he won an award of $10,000 under the company's incentive scheme.

He purchased a second-hand car at a cost of $60,000 for the purpose of meeting clients. He paid insurance and licence fees totalling $20,000 for the whole year. It was agreed with the Assessor that the private use of the car was 40%. A depreciation allowance on the car was calculated to be $43,200.

He was asked by his employer to join the Hong Kong Country Club and he paid annual subscription of $6,000 to the Club, one half of which was refunded by his employer.

On 1 December 2019, he was granted a share option at a cost of $100 to purchase 1,000 shares in Wang Lab. Ltd. at $2 each. He sold the option to take up 400 shares on 12 January 2020 for $3,000. He subsequently exercised the option to take up the remaining 600 shares on 4 April 2020. The 600 shares were sold for $5,000 on 30 April 2020. Details of market value were as follows:

1 December 2019 $3.5 12 January 2020 $3.2 4 April 2020 $5.0 30 April 2020 $8.3

His wife has no income during the year of assessment 2020/21. His son, Alex, aged 19, was studying in Canada and living with Mr. Ching's sister, Mrs. Kwan. Because Mrs. Kwan had no children, she paid the school fees for Alex and wholly supported his living.

Mr. Ching has a mother, aged 65, who is living together with the family. His father, aged 67, is currently living in the PRC but fully maintained by Mr. Ching.

Mrs. Chings mother, aged 53, has broken her legs in an accident in October 2020. She is eligible for the Governments Disability Allowance and has lodged the claim in February 2021. Approval was received from the Social Welfare Department in May 2021. She has been staying in a registered Nursing Home since October 2020. Mrs. Chings father, aged 60, is also living in a registered Nursing Home together with Mrs. Chings mother. Their residential care expenses totaling $250,000 is paid by Mr. Ching.

During the year, Mr. Ching made a cash donation of $50,000 to Po Leung Kuk.

During the year, Mr. Ching has made a mandatory contribution of $18,000 to the MPF scheme.

Required:

(a) Calculate the net assessable income of Mr. Ching for the year of assessment 2020/21. Give explanations for the tax treatments of items stated in the question.

(b) Calculate the salaries tax liability of Mr. Ching for the year of assessment 2020/21 (ignore provisional tax).