QUESTION 1 Hamzah and his wife Fatima, are both tax residents in Malaysia for the basis year 2022. The followings are the relevant information related to Hamzah and Fatima for the year of assessment (YA) 2022: Taxpayers' information: Hamzah started a business named Xpert Computer Solution on 1 March 2016 and the business closes its accounts on 31 December annually. The main business is selling computers and accessories, based in Petaling Jaya. The business information is as follows: Non-current assets used in the business were acquired on cash basis. Following are the details of the existing of non-current assets of the business: Additional information: - Three (3) units of air-conditioners were acquired on 25 June 2022. The cost for each airconditioner was RM2,000 and entitled as a small value asset in the year of acquisition. - In October 2022, the van was traded-in at the value of RM70,000 with a new lorry costing RM120,000 on hire purchase term. A deposit of RM5,000 was paid on 30 October 2022. The balance is payable by 24 monthly instalments of RM2,200 with the first instalment due in the following month. The following is the Statement of Profit or Loss of Xpert Computer Solution for the financial year ended 31 December 2022: Notes: 1. The business joined a business pitch competition in April 2022 and has won the third place. 2. The business received RM2,000 for compensation from an insurance company for goods destroyed during the recent flash flood at the business premise. 3. Remunerations consist of: Included in the employees' salaries was a payment of salary to Hasanain, a part time senior citizen amounted to RM10,000. 6. Interest on loan arising from the bank loan to finance the investment in shares and business' working capital amounted to RM8,000 and RM6,000 respectively. 7. 8. Repair and maintenance charges included RM15,000 for fuel costs and maintenance of the delivery goods, RM5,200 for initial repair of storeroom and RM2,800 for the cost of installing CCTV at business premise. 11 11. One (1) unit of Dell All-in-One desktop was taken for personal use amounted to RM5,800 (market value) and no record was made for this transaction. The cost of the desktop was RM3,200. Other relevant information relating to Hamzah for the YA 2022 is as follows: a. He donated RM22,000 to a healthcare facility approved by the authority for the purchase of medical equipment. Hamzah's annual zakat contribution was RM7,500. b. Hamzah's mother suffered stroke and certified as disabled person. He bought a wheelchair of RM3,600 and paid RM8,200 for his mother's medical expenses. He also incurred RM2,000 in respect of his father-in-law's medical expenses. c. Books and magazines for his own personal reading of RM2,000. Beginning March 2022, he also paid RM100 monthly for a membership fee at a gym. d. He composes music on a part time basis and received a royalty of RM36,000 during the year 2022. e. He owns a condominium in Subang Jaya from which he derived rental income. The gross rental income for the year 2022 amounted to RM32,500 including advance rental of RM2,500. Expenses consists of RM2,000 quit rent and assessment and RM5,000 renovation cost f. Insurance premiums on medical policy for himself RM4,800 and life insurance RM2,400 for Fatima. g. RM1,500 for family vaccination costs and RM700 for self-medical examination fee. h. He rewarded himself with an iPhone RM3,050. i. RM2,700 paid for electric vehicle charging facilities and purchased a tennis racket for Zara amounted to RM280. j. Hamzah had performed an Umrah in Saudi Arabia in March 2022 and paid RM150 for departure levy. k. He spent RM1,800 on accommodation at Aseania Resort Langkawi, registered with Ministry of Tourism, Arts and Culture Malaysia (MOTAC). Fatima started her employment as an officer with Kelington Group Berhad on 1 March 2018. Other payments and benefits received by Fatima in 2022 were as follows: - A monthly salary of RM9,000 (gross). - Bonus equivalent to two-month salary. - A car (more than 5 years) provided by the employer until 31 October 2022, at a cost of RM88,000. - The company paid RM8,000 for the cost of leave passage to Bali, Indonesia. Included in the price were air ticket and hotel accommodation amounted to RM3,800 and RM4,200 respectively. The company also paid for the vacation expense of RM4,000 to Fatima and family for their trip to Pulau Redang. - A watch costing RM10,000 awarded to Fatima in appreciation for her excellent service to the company. - RM1,500 for entertaining the company's suppliers. The following were Fatima's other income and expenditures for the basis year 2022: a. Dividend income of RM15,000 from an investment in the shares of company in Singapore. Interest income of RM6,000 was received from a local bank savings account in Malaysia. any available child relief for children. Zara is pursuing a professional accountancy course in a local university under a full scholarship. Iris is studying in Kolej Matrikulasi Perlis and Arif is schooling at Sekolah Kebangsaan Kota Damansara. c. Fatima is currently enrolled in an online self-advancement course for RM2,300. d. RM3,800 education insurance paid for Arif. e. A private retirement scheme approved by the relevant authority of RM5,000. f. Cash donation of RM5,000 paid to an approved charitable institution in Malaysia. Fatima also donated RM2,000 zakat to Majlis Agama Islam Terengganu. g. She also spent RM900 on newspapers and RM1,200 for internet subscription. h. Bought a laptop costing RM2,200 for personal use and a swimming suit costing RM320 for Iris. i. Insurance premium of RM2,600 on life insurance policy insuring her life for a capital sum of RM300,000. j. RM5,400 for her father's hospital bills at Subang Jaya Medical Center and the cost was shared equally between her sister. k. She contributed SSPN to Arif RM200 each month. She withdrew RM1,000 from the account in September 2022 to cover Arif's tuition. I. Fatima's annual contribution to SOSCO was RM400. m. All the expenses incurred by Hamzah and Fatima were supported by receipts. Required: Filing in Tax Return a. Compute capital allowance of Xpert Computer Solution for all the relevant years of assessment up to year of assessment 2022; (10 marks) b. Compute statutory business income of Xpert Computer Solution for the year of assessment 2022; (20 marks) c. Compute total income of Hamzah and Fatima for the year of assessment 2022; (10 marks) d. Compute income tax payable / (tax refund) in respect of Hamzah and Fatima for the year ofassessment 2022; and (20 marks) e. Complete the following sections of the 2022 Form e-B and e-BE in respect of Hamzah and lor Fatima: i. Basic particulars ii. Type of assessment iii. Spouse information iv. Statutory Income and Total Income v. Reliefs vi. Tax Payable vii. Individual Financial Information (Main business only) (20 marks) QUESTION 1 Hamzah and his wife Fatima, are both tax residents in Malaysia for the basis year 2022. The followings are the relevant information related to Hamzah and Fatima for the year of assessment (YA) 2022: Taxpayers' information: Hamzah started a business named Xpert Computer Solution on 1 March 2016 and the business closes its accounts on 31 December annually. The main business is selling computers and accessories, based in Petaling Jaya. The business information is as follows: Non-current assets used in the business were acquired on cash basis. Following are the details of the existing of non-current assets of the business: Additional information: - Three (3) units of air-conditioners were acquired on 25 June 2022. The cost for each airconditioner was RM2,000 and entitled as a small value asset in the year of acquisition. - In October 2022, the van was traded-in at the value of RM70,000 with a new lorry costing RM120,000 on hire purchase term. A deposit of RM5,000 was paid on 30 October 2022. The balance is payable by 24 monthly instalments of RM2,200 with the first instalment due in the following month. The following is the Statement of Profit or Loss of Xpert Computer Solution for the financial year ended 31 December 2022: Notes: 1. The business joined a business pitch competition in April 2022 and has won the third place. 2. The business received RM2,000 for compensation from an insurance company for goods destroyed during the recent flash flood at the business premise. 3. Remunerations consist of: Included in the employees' salaries was a payment of salary to Hasanain, a part time senior citizen amounted to RM10,000. 6. Interest on loan arising from the bank loan to finance the investment in shares and business' working capital amounted to RM8,000 and RM6,000 respectively. 7. 8. Repair and maintenance charges included RM15,000 for fuel costs and maintenance of the delivery goods, RM5,200 for initial repair of storeroom and RM2,800 for the cost of installing CCTV at business premise. 11 11. One (1) unit of Dell All-in-One desktop was taken for personal use amounted to RM5,800 (market value) and no record was made for this transaction. The cost of the desktop was RM3,200. Other relevant information relating to Hamzah for the YA 2022 is as follows: a. He donated RM22,000 to a healthcare facility approved by the authority for the purchase of medical equipment. Hamzah's annual zakat contribution was RM7,500. b. Hamzah's mother suffered stroke and certified as disabled person. He bought a wheelchair of RM3,600 and paid RM8,200 for his mother's medical expenses. He also incurred RM2,000 in respect of his father-in-law's medical expenses. c. Books and magazines for his own personal reading of RM2,000. Beginning March 2022, he also paid RM100 monthly for a membership fee at a gym. d. He composes music on a part time basis and received a royalty of RM36,000 during the year 2022. e. He owns a condominium in Subang Jaya from which he derived rental income. The gross rental income for the year 2022 amounted to RM32,500 including advance rental of RM2,500. Expenses consists of RM2,000 quit rent and assessment and RM5,000 renovation cost f. Insurance premiums on medical policy for himself RM4,800 and life insurance RM2,400 for Fatima. g. RM1,500 for family vaccination costs and RM700 for self-medical examination fee. h. He rewarded himself with an iPhone RM3,050. i. RM2,700 paid for electric vehicle charging facilities and purchased a tennis racket for Zara amounted to RM280. j. Hamzah had performed an Umrah in Saudi Arabia in March 2022 and paid RM150 for departure levy. k. He spent RM1,800 on accommodation at Aseania Resort Langkawi, registered with Ministry of Tourism, Arts and Culture Malaysia (MOTAC). Fatima started her employment as an officer with Kelington Group Berhad on 1 March 2018. Other payments and benefits received by Fatima in 2022 were as follows: - A monthly salary of RM9,000 (gross). - Bonus equivalent to two-month salary. - A car (more than 5 years) provided by the employer until 31 October 2022, at a cost of RM88,000. - The company paid RM8,000 for the cost of leave passage to Bali, Indonesia. Included in the price were air ticket and hotel accommodation amounted to RM3,800 and RM4,200 respectively. The company also paid for the vacation expense of RM4,000 to Fatima and family for their trip to Pulau Redang. - A watch costing RM10,000 awarded to Fatima in appreciation for her excellent service to the company. - RM1,500 for entertaining the company's suppliers. The following were Fatima's other income and expenditures for the basis year 2022: a. Dividend income of RM15,000 from an investment in the shares of company in Singapore. Interest income of RM6,000 was received from a local bank savings account in Malaysia. any available child relief for children. Zara is pursuing a professional accountancy course in a local university under a full scholarship. Iris is studying in Kolej Matrikulasi Perlis and Arif is schooling at Sekolah Kebangsaan Kota Damansara. c. Fatima is currently enrolled in an online self-advancement course for RM2,300. d. RM3,800 education insurance paid for Arif. e. A private retirement scheme approved by the relevant authority of RM5,000. f. Cash donation of RM5,000 paid to an approved charitable institution in Malaysia. Fatima also donated RM2,000 zakat to Majlis Agama Islam Terengganu. g. She also spent RM900 on newspapers and RM1,200 for internet subscription. h. Bought a laptop costing RM2,200 for personal use and a swimming suit costing RM320 for Iris. i. Insurance premium of RM2,600 on life insurance policy insuring her life for a capital sum of RM300,000. j. RM5,400 for her father's hospital bills at Subang Jaya Medical Center and the cost was shared equally between her sister. k. She contributed SSPN to Arif RM200 each month. She withdrew RM1,000 from the account in September 2022 to cover Arif's tuition. I. Fatima's annual contribution to SOSCO was RM400. m. All the expenses incurred by Hamzah and Fatima were supported by receipts. Required: Filing in Tax Return a. Compute capital allowance of Xpert Computer Solution for all the relevant years of assessment up to year of assessment 2022; (10 marks) b. Compute statutory business income of Xpert Computer Solution for the year of assessment 2022; (20 marks) c. Compute total income of Hamzah and Fatima for the year of assessment 2022; (10 marks) d. Compute income tax payable / (tax refund) in respect of Hamzah and Fatima for the year ofassessment 2022; and (20 marks) e. Complete the following sections of the 2022 Form e-B and e-BE in respect of Hamzah and lor Fatima: i. Basic particulars ii. Type of assessment iii. Spouse information iv. Statutory Income and Total Income v. Reliefs vi. Tax Payable vii. Individual Financial Information (Main business only) (20 marks)