Question:Mrs Kumari is a wedding planner and a freelance writer. She owns True Love & Events Enterprise located in Klang, Selangor. Mrs. Kumari is married to Mr. Raja. Both Mrs. Kumari and Mr. Raja are citizens and tax residents for the basis year 2018.  

 

Below is the information regarding their sources of income for the basis year 2018: 

 

Mrs. Kumari                                                                                      RM 

 

Business income 

Adjusted income                                                                                 75,000

Balancing charge                                                                                 17,000  

Capital allowances                                                                     6,500 

Unabsorbed capital allowance brought forward from YA 2017           3,400 

 

Dividend income: 

Single tier dividend of companies listed in Bursa Malaysia                11,700  

Koperasi Felda Berhad (KPF)                                                            10,900      

 

Rental income: 

Mrs. Kumari owns a house in Putrajaya, Wilayah Persekutuan. The monthly rental is RM1,800. Mrs. Kumari incurred an amount of RM10,200 to renovate the kitchen of the house and another RM3,450 for general maintenances costs.

 

Royalty income: 

She wrote two books during the year 2018 and she received RM29,400 as the royalty. However, she used RM10,000 of the income to purchase computer and printer. 

 

She also involved in a cultural performance for the purpose of promoting tourism in Malaysia and received a royalty of RM16,000. The performance was approved by the Ministry of Culture, Arts and Tourism. 

Mr. Raja 

 

i.          He works as a senior officer at National Audit Department, Putrajaya since year 1990. He received RM8,200 per month as salary and RM300 for the monthly entertainment allowance. He retired on  31 August 2018, when his age is 55 years old.   

 

ii.         During his period of working with government, Mr. Raja has been provided with the following benefits: 

 

a.    A fully- furnished house with monthly rental of RM2,100 of which RM480 is for furnishings. The furnished house was provided to Mr. Raja since year 2010. 

 

b.   Medical cost of RM8,700 for her son's treatment in Hospital Serdang. 

 

iii.        He has been paid a gratuity amounting to RM200,000 upon his retirement.  

 

iv.   On 1 September 2018, he was employed as senior manager by an audit firm, PriceWaterhouseCooper (PwC) in Kuala Lumpur. His gross salary is RM10,340 per month. He is also entitled to a travelling allowance of RM100 per month. 

 

 

Additional information: 

 

i.       Mr. Raja is suffered with a cancer and thus RM15,000 was incurred for his medical treatment (paid by Mrs. Kumari). 

 

ii.           Mrs. Kumari and Mr. Raja were blessed with three children. 

 

a)Jeshwari, married, aged 24 years old, university students in United Kingdom. 

b)        Arvind, single, aged 20 years old, working as a cashier at Giant Hypermarket. 

c)Rabin, single, aged 15 years old, a student in a secondary school. 

 

iii.         Both Mrs. Kumari and Mr. Raja purchased books and magazines worth RM1,600 and RM790 respectively. 

 

iv.          For the year 2018, Mrs. Kumari incurred the following expenses: 

 

RM 

Medical care treatment for her father, Mr. Suraj                                  7,400

Medical expenses for her mother in law                                              1,100

Deposit to National Educational Deposit Scheme (SSPN)                  3,900 

 

 

 

Type of policy                                                            Premium paid per annum 

(RM)

Life Insurance for Mrs. Kumari                                             5,200      

Life Insurance for Mr Raja                                                      3,800      

Insurance education for Arvind                                               4,200       

 

 

v.         For basis year 2018, Mrs. Kumari donated cash of RM1,500 to orphanage house, an approved institution. 

 

vi.       Mr. Raja donated cash of RM800 to the National Library, an approved institution.

 

Required: 

 

a) Compute the income tax payable for the year of assessment 2018 for : 

 

(i)            Mrs. Kumari 

 

(ii)          Mr. Raja

 

Note: Both are them are resident taxpayers. They do not elect for combined assessment butMrs. Kumari will claim the child relief.