Tax payer No. 1 - Amin Bin Adam (Self: Husband)

A)EMPLOYMENT INCOME

-Is a Chartered accountant working in Starcom Malaysia Sdn Bhd

-Has been employed by the company since 1 January 2000

-Received a salary of RM8,000 per month after 11% EPF deduction

Received a bonus of RM15,000 for the year 2019 -The company bought new fleets of cars in 2019 and offered to sell their old cars to the employees. Amin was offered a Proto Saga 2010 model @ 5,000 RM. Market value of the car as at that time was 15,000 RM

-Benefit-in-kind (BIK)

a) Accommodation

Amin was provided with a furnished Apartment in Alor Star by the Company. The rental was RM5,000 per month (including RM1,000 per month for the furnishings). The house was too big so he was required to entertain clients of the Company with some portion of the house. Amin estimates that his family only utilized about 50% of the house.

b) Other BIK

Driver

RM1000 per month

Gardener

RM500 per month

Domestic Servant

RM700 per month

Utilities bills

RM3,000 per year

Child care benefits

RM4,000 per year

c) Tax relief:

- Amin contributed 11% on his salary to EPF

- paid zakat RM2,000 on 3 Feb 2019 (Cheque No. PBB001100 & Receipt no. IBG44003LM)

- A life policy premium of RM2,000 was payable in 2019, only paid RM1,000 in 2019

e) Amin also got additional incomes for the year ended 2019 from the following sources :-

Detailed incomes

RM

I

Malaysian dividend (net)

Payment date: 31 October 2019

Warrant No. 999

Company Name: ABC Sdn Bhd

18,000

II

Interest from CIMB Bank Berhad for 1 year Fixed Deposit

3,000

v

Amin owned a shop and received RM1,000 rental income for each month Address: 10, Jalan Sungai, 20000 Alor Star

Date of Rental: 1 January 2019 until 31 December 2019

12,000*

Direct expenses incurred during the year:

Assessment

Quit rent

Insurance

Maintenance

200

150

850

500

B)BUSINESS INCOME

Amin owned a mini mart, called Amin minimart. Attached herewith its profit and Loss for the year ended 31 December 2019, Balance Sheet as at 31 December 2019 and Notes to Accounts (Appendix A and B).

C)PARTNERSHIP INCOME

Based on Form P computed: AP Management Services, Amin has an adjusted Partnership income of RM65,000 for year of Assessment 2019.

Children Reliefs:

Amin will claims the children reliefs under his account:-

The following are the details of his children:

Name

Date of Birth

Age

Education details / Remarks

Syabil Bin Amin

24 May1997

23

University - New Zealand RM6,000 paid for study fee

Farihah Binti Amin

30 January 1999

20

disabled

Zulaihah Binti Amin

17 January 2000

19

Vocational School

Paid RM2,000 school fee per year

Mahmud Bin Amin

12 February 2003

16

Singapore secondary institute

Azlina Binti Amin

25 July 2008

11

National school in Malaysia

Fadzil Bin Amin

11 November 2016

3

Handicapped

Appendix A

Amin Minimart

Profit and Loss for the year ended 31 December 2019

RM

RM

Sales

260,030

Less : Cost of Goods Sold

Opening stock

34,160

+ Purchases

78,200

+ Direct Production cost

21,800

Closing Stock

19,580

(114,580)

Gross Profit

145,450

Expenses

Salary

7,000

Rental of Business premises

(Note a)

4,900

Depreciation

56,300

Loss on disposal of fixed assets

31,900

Leave passage

(Note b)

520

Donation

(Note c)

300

Subscription (Cars Magazine)

190

Other deductible expenses

5950

107,060

Net Profit during the year

38,390

Note (a)

Opening Balance at master Data

-Unabsorbed business loss brought forward: RM300

Note (a)

Rental paid

Recipient: Ibrahim

IC No. 123456-07-8901

Address: 99, Jalan Tenaga, 10200 Alor Star

Note (b)

Leave passage paid to 2part time workers trip to KL

Note (c)

No supporting document

Additional Information:

1.Monthly Tax Deduction by employer for the period amounted to RM22,000

2.Total tax instalment made under CP500 (business) is RM35,500

Appendix B

Amin Minimart

Balance Sheet as at 31 December 2019

Note

RM

RM

Fixed Assets (NBV)

Plant & Machinery

1

49,500

Less : accumulated Depreciation

(10,500)

39,000

Motor vehicle

2

96,000

Less : Accumulated Depreciation

(38,400)

57,600

Furniture and Fittings

3

85,800

Less : Accumulated Depreciation

(16,860)

68,940

Total Fixed Assets

165,540

Current Assets

Stock

1,600

Other Debtors

32,700

Cash

10,500

Bank

19,500

64,300

Current Liability

Borrowing

2,400

Trade Creditor

21,350

Other Creditor

10,300

Other Current Liability

13,960

48,010

Net Current Assets

16,290

181,830

Capital

Capital Contribution

147,000

Retained Profit

40,070

Less : Drawing

(7,620)

179,450

Long Term Liability

Loan to shareholder

2,380

181,830

Note:

Plant and machinery

Date/Year of

Purchase

Cost

(RM)

1

Plant and machinery

1^st Mar 2017

49,500

2

Motor vehicle

1^st Mar 2017

96,000

Other Fixed Assets

3

Furniture and fitting

15^th Oct 2017

82,800

4

Computers

31^st Jan 2018

40,800

Tax payer No.2 - Nelysa

Nelysa is Amin's first wife. She works as a marketer and her job requires her to meet the company's clients. The following are her employment income details:

1.Monthly salary of RM6,000 after EPF deduction

2.Allowances received from employer with the following portion: -

(i)Travelling RM3,000 (self: RM1,000; clients: RM2,000)

(ii)Cash allowance RM2,000

3.A bonus of RM5,000 for excellent performance was paid to Nelysa.

4.Nelysa contributed 11% of her salary to EPF.

5.Paid life policy premium of RM1,000 in 2019

6.Paid medical insurance premium of RM3,500 in 2019

7.Purchase of Educational books in 2019 for RM1,000 and original receipt provided.

8.Paid medical check-up bill for her mother in 2019 of RM2,000

9.Donated wheel chair RM2000 to General Hospital for care of disabled patients.

10.Others income derived in 2019.

Dividend incomes both dated 8 Sept 2019

No.

Warrant/

Serial No.

Company Name

Net

Dividend

RM

1

SC00453

Starcom Malaysia Sdn Bhd

300

2

SC00454

Starcom Resources Sdn Bhd

120

Income from Rent: RM12,500.00

Type of Property / Asset: Apartment

Address: 20, Jalan Lapangan, Alor Star

Date of Rental: 1 January 2019 to 31 December 2019

The income is assessed under Section 4(d) ITA 1967.

Direct expenses:

RM

Interest

Assessment

Quit Rent

Insurance

Upkeep

Renewal of tenancy agreement

Other direct expenses

2,200

1,500

1,200

1,200

900

250

800

Total Expenses

9,050

11.Monthly Tax Deduction made in 2019 of RM2,400.

Tax payer No. 3 -Asmaa

Asmaa runs a grocery business in 2019. Attached herewith the detailed Profit and Loss for the year, Balance Sheet as at 31 December 2019 and Notes to Accounts.

Asmaa Groceries

Profit and Loss for the year ended 31 December 2019

RM

RM

Sales

110,388

Less : Cost of goods sold

Opening stock

Nil

+ Purchases

69,330

+ Other allowable direct expenses

800

Closing stock

(9,142)

(60,988)

Gross Profit

49,400

Expenses

Staff salary, EPF and SOCSO

10,000

Depreciation

13,400

Entertainment to staff

2,000

Donation to school (without receipt)

1,000

Salary to sole proprietor

6,000

(32,400)

Net Profit during the year

17,000

Asmaa Groceries

Balance Sheet as at 31 December 2019

Note

RM

RM

Fixed Assets (NBV)

Building

1

100,000.00

Less : Accumulated Depreciation

(10,000.00)

90,000.00

Furniture and Fittings

Table and chairs

2

10,000.00

Less : Accumulated Depreciation

(1,000.00)

9,000.00

Movable partitions

3

20,000

Less : Accumulated Depreciation

(2,000.00)

18,000.00

Computer

4

2,000.00

Less : Accumulated Depreciation

(400.00)

1,600.00

118,600.00

Current Assets

Stock

9,142.00

Cash

2,123.00

Bank

1,000.00

Other Current Assets

3,558.00

15,823.00

Current Liability

Loan

400.00

Trade Creditor

3,500.00

Other Current Liability

10,000.00

13,900.00

Net Current Assets

1,923.00

120,523.00

Financed by :

Capital Contribution

99,523.00

Current Year Profit

21,000.00

120,523.00

NBV - Net Book Value

Note:

Date of purchase

Cost

(RM)

1.Land & Building

12^nd Jan 2017

100,000

2.Table and chairs

15^th Mac 2019

10,000

3.Movable partitions

15^th Mac 2018

20,000

4.Computer

14^th Apr 2019

2,000

132,000

REQUIRED:

A.Compute using Excel the lowest final tax liability and print the following for Amin bin Adam and his two wives for Year of Assessment 2019.

1)Capital allowance detailed report

2)Tax liability report for each taxpayer, including:

A. Adjusted Income

B. Partnership Income

C. Employment Income

D. Other Source Income

B.Reflection

Reflect how the knowledge learned from this course will be useful in your future endeavour especially in your career and daily life so as to fulfil the responsibility as a taxpayer. You may include explanation on tax planning i.e. how to minimise your tax liability by utilising the tax incentives as well as expenditures that entitled for reliefs and rebates.

Please present your answer in a report of about 7-10 pages (Times New Roman, 12-font size, double-spacing) excluding reference list.

Problem Based Learning-Group Assignment

In a Group of 5 or 6, prepare the answer as required and submit in 3 weeks time.

REQUIRED:

A.Compute using Excel the lowest final tax liability and print the following for Amin bin Adam and his two wives for Year of Assessment 2019.

1)Capital allowance detailed report