QUESTION 2

Amir is an accounting graduate from Multimedia University. Upon completing his study

in March 2016, he joined Phuad, Viknesh and Chuah (PVC), a medium-sized firm in

Damansara Utama offering accounting, auditing, and taxation services. After three years

of working there, Amir had been promoted to the permanent audit associate position with

effect from 1st January 2019.

Amir had recently celebrated the birth of his son on 19th June 2019 after two years of

marriage. His wife, Intan, is a full-time Master of Business Administration (MBA)

student in the University of Malaya. Her tuition fees and living allowances are fully

sponsored by a public scholarship, allowing her to not seek employment.

Amir, Intan, and their new-born son have been living in an apartment in Taman Tun Dr.

Ismail. They also have been taking care of Intan's sixty-two-year-old mother, Hajah Ina.

Hajah Ina has always been a housewife with no income of her own. In return for the

couple's care, she has been looking after their son when Intan attends her classes.

The following information details Amir's income and expenses throughout the year 2019.

Employment Income and Benefits

i. A gross monthly salary of RM4,000.

ii. A performance bonus of 1.25-month salary paid in March 2019.

iii. Amir had taken a one-month study leave in October 2019 to focus on his

ICAEW's professional examinations. PVC had paid his salary in full for this

month.

iv. The gross monthly salaries, performance bonus, and salary paid during the study

leave had been subjected to 11% deduction for Employees' Provident Fund (EPF)

contribution.

v. Contribution for SOCSO of RM19.75 per month had also been deducted from his

gross monthly salaries and salary paid during the study leave.

vi. Travelling allowance amounting to RM250 per month to assist Amir's field audit

assignments.

vii. A family medical benefit package that had covered RM1,800 for the whole year.

Out of that amount, RM1,750 was for Intan's maternity expenses.

viii. In February 2019, PVC had sent Amir to Sarawak to perform audit works on

several clients located in that state. PVC had provided Amir with hotel

accommodation throughout the entire month. The room costed RM120 per night.

Other income

i. On 15th January 2019, Amir had received a dividend of USD300 from his

investment in an American bio-tech start-up. The exchange rate applicable on that

date was USD1:RM4.10.

ii. Interest amounting to RM325 had been credited into his Maybank savings account

on 15th June 2019. It was derived from his fixed deposit savings in that bank.

Expenditure

i. Purchase of laptop and printer by Amir for Intan's study. The laptop and printer

costed RM1,899 and RM367 respectively.

ii. Payment of RM350 annual subscription fee to the Malaysian Institute of

Accountant under Amir's name.

iii. Purchase of books and references totalling RM725 by Amir and Intan for their

respective studies.

iv. Amir paid RM1,800 for his ICAEW tuition fees.

v. Medical expense paid by Amir for Hajah Ina's clinic visit amounting to RM100.

vi. Broadband subscription registered under Amir's name for the family use. The bill

was RM130 per month throughout the year.

vii. A yearly premium on medical insurance for Amir, Intan, and their baby

amounting to RM4,000.

viii. Zakat payment of RM29.60 had been made on 31st May 2019.

Required:

Calculate Amir's income tax payable for the Year of Assessment 2019. Give me ALL

relevant workings. Also provide me your answer for income tax payable to the nearest TWO

(2) decimal points.

Note: You should indicate by the use of word "nil" for any item referred to in the

question which no adjusting entry needs to be made or no reliefs or rebates to be given in

the tax computation.

APPENDIX TAX RATES AND ALLOWANCES The following tax rates, allowances and values are to be used in answering the questions. 1. Income tax rates for resident individuals for the Year of Assessment (YA) 2019. Chargeable Income (RM) Calculations (RM) Tax Rate % Tax Payable (RM) 0 - 5,000 On the first 2,500 Next 2,500 5,000 - 10,000 On the first 5,000 0 Next 5,000 50 10,000 - 20,000 On the first 10,000 50 Next 10,000 1 100 20,000 - 35,000 On the first 20,000 150 Next 15,000 3 450 35,000 - 50,000 On the first 35,000 600 Next 15,000 8 1,200 50,000 - 70,000 On the first 50,000 1,800 Next 20,000 14 2,800 70,000 - 100,000 On the first 70,000 4,600 Next 30,000 21 6,300 100,000 - 150,000 On the first 100,000 10,900 Next 50,000 24 12,000 150,000 - 250,000 On the first 150,000 22,900 Next 100,000 24 24,000 250,000 - 400,000 On the first 250,000 46,900 Next 150,000 24.5 36,750 400,000 - 600,000 On the first 400,000 83,650 Next 200,000 25 50,000 600,000 - 1,000,000 On the first 600,000 133,650 Next 400,000 26 104,000 Exceeding 1,000,000 On the first 1,000,000 237,650 Next ringgit 282. Reliefs for the Year of Assessment (YA) 2019. RM Personal relief 9,000 Disabled taxpayer (additional relief) 6,000 Spouse relief 4,000 Disabled spouse relief (additional relief) 3,500 Medical expenses for parents 5,000 Parental care 1,500 per parent Medical expenses for serious diseases (including medical examination expenses up to RM500) 6,000 Basic supporting equipment for disabled taxpayer, spouse, children, or parents 6,000 Child relief (below 18 years old) . Each 2,000 - Disabled 6.000 Child relief (over 18 years old and studying in higher learning institutions) - Each 8,000 - Disabled 14,000 Amount deposited into SSPN for child 8,000 Premium on deferred annuity contract and private retirement scheme 3,000 Employee contribution to Employees' Provident Fund (EPF) or approved provident fund 4,000 Premium on life insurance - Public servants under pension scheme 7,000 - Others 3,000 Premium on medical/education insurance 3,000 Employee's contribution to SOCSO scheme 250 Education fees paid by taxpayer for his own self-improvement 7,000 Lifestyle expenses 2,500 Breastfeeding equipment 1,000 Fees paid to childcare centre and kindergarten 1,000 3. Rebates for the Year of Assessment (YA) 2019. RM Chargeable income not exceeding RM35,000 - Individual 400 - Additional relief when spouse relief is claimed 4004. Values of benefits-in-kind. a. Car and fuel benefits Cost of car (when new) Prescribed annual value Fuel per annum (RM) of private usage of car (RM) (RM) Up to 50,000 1,200 500 50,001 - 75,000 2,400 900 75.001 - 100,000 3,600 1,200 100,001 150,000 5,000 1,500 150,001 - 200,000 7,000 1,800 200,001 - 250,000 9,000 2,100 250,001 - 350,000 15,000 2,400 350,001 - 500,000 21,250 2,700 500,001 and above 25,000 3,000 The value of car benefit equal to half of the above prescribed annual value is taken if the car provided is more than five years old, but the value of the fuel provided remains unchanged. Where a driver is provided by the employer, the value of the benefit per month is fixed at RM600. b. Household furnishing, equipment, and appliances Types of benefit Annual value of benefit (RM) a. Semi-furnished with furniture in the lounge, dining room, or bedrooms. 840 b. Semi-furnished with furniture as in (@) above and one or more of the following: air-conditioners, curtains and 1,680 carpets. C. Fully-furnished with furniture as in (a) and (b) above and one or more of the following: kitchen equipment, 3,360 crockery, utensils, and appliances. c. Provision of the following benefits by employer Gardeners RM3,600 per annum Domestic servants RM4,800 per annum Guard RM4,800 per annum5. Capital and industrial building allowances Types of asset Initial allowance rate Annual allowance rate (%) (%) Motor vehicles and heavy machinery 20 20 General plant and machinery 20 14 Office equipment, furniture and fittings, others 20 10 Computers, information technology equipment and 20 40 computer software Industrial building 10 3