Sophee was employed by Laila Sdn Bhd (a company based in Perak) as a sales manager since 1 June 2009. At the age of 48, Sopheess employment with the company was terminated on 31st August 2020. The termination of Sophees employment was not due to ill health. Upon termination of her employment, she received a gratuity of RM45,000 and compensation for loss of employment of RM130,000. Upon his termination, she also withdrew RM15,000 from the companys retirement fund (an unapproved scheme) of which RM6,500 was her total contributions and RM3,500 was the accumulated interest income earned on the overall total contribution. The balance was contributed by the employer. For the period 2020 (1 January to 30 September 2020), Sophee received the following income from Laila Sdn. Bhd:

1. Monthly gross salary of RM9,000 and monthly entertainment allowances of RM900.

2. A car costing RM80,000 was provided for his use until the termination of his employment. The car was acquired by the company in 2015. No fuel was supplied to him.

3. In February 2020, Sophee was hospitalised for an eye surgery. The medical bills amounting to RM14,000 was paid by the company.

4. Sophee was provided with a fully furnished house until the termination of his employment. The annual rental value of the house was RM30,000 exclusive of RM4,000 furnishings value. She was required to contribute RM400 per month for occupying the house.

5. A washing machine costing RM3,000 was also provided to him in the house. The prescribed average lifespan for the washing machine is 5 years.

6. The company paid for his utilities bills. Total amount of utilities paid from January to August 2020 was RM2,700. All bills were under Sophees name.

Other information:

1. Sophee received RM2,400 interest income from bonds issued by the government.

2. Sophee incurred RM4,800 to entertain the companys clients from January to August 2020.

3. Sophees total EPF deduction for 2020 was RM7,150.

4. Sophee paid annual premium on his life insurance policy amounting RM3,800.

5. In December 2019, Sophees mother in law was hospitalised and he paid RM4,800 for the treatment.

6. Sophee bought a new wheelchair for her disabled daughter worth RM5,400.

7. Sophee donated RM4,200 cash to the National Cancer Foundation (an approved institution).

8. Sohee is married to Isabel, (with no income) and has two daughters: (i) Tracy, aged 19 years old studying at Multimedia University. (ii) Rosy, aged 11, disabled, studying in a special school

REQUIRED:

(a) Compute Sophees income tax liability for the year of assessment 2020. Show all your workings. (29 marks)

(b) Explain briefly your treatment for the following items:

(i) Gratuity. (2 marks)

(ii) Compensation for loss of employment. (2 marks)

(iii) Withdrawal from unapproved pension fund. (2 marks)