Question
Mr. Zack, an engineer is employed by ZYZ Bhd. since 31 August 2011. For the year 2020, he was paid a gross monthly salary of
Mr. Zack, an engineer is employed by ZYZ Bhd. since 31 August 2011. For the year 2020, he was paid a gross monthly salary of RM8,000, until his service is terminated on 31 October 2020. He also received the following income for the year 2020:
- A bonus of RM16,000 for 2019 service
- Travelling allowance amounted to RM6,500 for official duties.
- Reimbursement of utility bill amounted to RM700 from ZYZ Bhd.
- Reward of RM1,500 for passing assessments
- Gratuity of RM55,000 for the years of service with the company
- Compensation for loss of employment of RM77,000.
The company also provides him with a six-year-old car (cost when new: RM90,000) for the period 01 January 2020 to 30 April 2020. From 1 May 2020 he was provided with a new car costing RM150,000. Free fuel is also provided for him by the employer. The company also pays for the mobile phone (rental and charges) and other benefits during the year. His benefits and the respective costs incurred by the employers for the year 2020 are as follows:
|
| RM |
| Mobile Phone | 2,000 |
| Furnishing- Fully furnished | 8,000 |
| Gardeners wages | 8,400 |
| Domestic servants wages | 9,000 |
| Drivers wages | 6,700 |
| Childcare benefit | 24,000 |
Leave passage provided to Mr Zack in 2020 are as follows:
| Month | Location | RM |
| January | Langkawi | 2,120 |
| March | Thailand | 4,000 |
| April | Penang | 1,160 |
| June | Melaka | 80 |
| July | Kuching | 1,400 |
Mr. Zack was transferred from Johor Bahru to Kuala Lumpur on 1 January 2020. For the first four months, he was provided accommodation in the Puteri Pacific Hotel and for the rest of the employment period, he was provided with a rented bungalow. The costs incurred by the employer for the year was as follows:
|
| RM |
| Hotel accommodation (4 months) | 6,000 |
| Rented Bungalow (6 months) | 14,000 |
ZYZ Bhd has operated an unapproved retirement scheme since 1989. On 30 September 2020, the scheme was wound up. Mr Zack thus received the following income:
|
|
RM |
| Employer cumulative contributions | 43,000 |
| Employee cumulative contributions | 25,000 |
| Interest | 12,000 |
Required: Compute the total employment income of Mr. Zack under S4(b) of ITA 1967 for the YA 2020.
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Principles Of Taxation For Business And Investment Planning 2018
Authors: Sally Jones, Shelley C. Rhoades Catanach, Sandra R Callaghan
21st Edition
978-1259713729
