TAX RATES AND ALLOWANCES The following tax rates, allowances and values are to be used in answering the questions. Income tax rates Resident Individuals Chargeable income RM First 5,000 (0 - 5,000) Next 15,000 (5,001 - 20,000) Next 15,000 (20,001 - 35,000) Next 15,000 (35,001 - 50,000) Next 20,000 (50,001 - 70,000) Next 30,000 (70,001 - 100,000) Next 150,000 (100,001 - 250,000) Next 150,000 (250,001 - 400,000) Exceeding 400,000 Rate % 0 1 3 8 14 21 24 24.5 25 Cumulative tax RM 0 150 600 1,800 4,600 10,900 46,900 83,650 133,650 Resident company Paid up ordinary share capital First RM500,000 18% 24% Excess over RM500,000 24% 24% RM2,500,000 or less More than RM2,500,000 Non-resident Company Individual 24% 28% Personal reliefs and allowances RM Self 9,000 Disabled self, additional 6,000 Medical expenses expended for parents (maximum) 5,000 Parental care relief: Father 1,500 Mother 1,500 Medical expenses expended on self, spouse or child with serious disease, including up to RM500 for medical examination (maximum) 6,000 Basic supporting equipment for disabled self, spouse, child or parent (maximum) 6,000 Fees expended for skills or qualifications (maximum) 5,000 Lifestyle (maximum) 2,500 - Purchase of books journals, magazines, printed newspaper and other similar publications for self, spouse and child. Purchase of personal computer, smartphone or tablet for self, spouse and child. Purchase of sports equipment and gym membership for self, spouse and child. - Payment of monthly bill for internet subscription Expenses on breastfeeding equipment (maximum) 1,000 Spouse relief 4,000 Disabled spouse, additional 3,500 Child (each) 2,000 Child - higher rate (each) 8,000 Disabled child (each) 6,000 Disabled child - higher rate (each) 14,000 Life insurance premiums and contributions to EPF (maximum) 6,000 Contributions to SOCSO (maximum) 250 Contributions to Private Retirement Scheme or deferred annuity premiums (maximum) 3,000 Medical or education insurance premiums for self, spouse or child (maximum) 3,000 Deposit for a child into the SSPN's scheme (maximum) 6,000 Self-education fee - higher rate 7,000 Child care fees to a child care centre or a kindergarten (maximum) 1,000 Rebates Chargeable income not exceeding RM35,000 Individual Separately assessment Wife / Husband Joint assessment Zakat fitrah RM 400 400 800 Actual Value of benefits in kind Cost Of Car When New (RM) Up to 50,000 50,001 - 75,000 75,001 - 100,000 100,001 - 150,000 150,001 - 200,000 200,001 - 250,000 250,001 - 350.000 350,001 - 500.000 500,001 and above Annual Value Of BIK Fuel Per Annum (RM) (RM) 1,200 600 2,400 900 3,600 1,200 5,000 1,500 7,000 1,800 9,000 2,100 15,000 2,400 21,250 2.700 25,000 3.000 70 Other benefits RM per month Household furnishings, apparatus and appliances Semi-furnished with furniture in the lounge, dining room, or bedroom Semi-furnished with furniture as above plus air-conditioners and/or curtains and carpets 140 Fully furnished premises 280 Domestic help 400 Gardener 300 Driver 600 Capital allowances Initial allowance (IA) Rate % Industrial buildings Plant and machinery - general 20 Motor vehicles and heavy machinery 20 Office equipment, furniture and fittings 20 10 Annual allowance (AA) Rate % 3 14 20 10 Question 1 Mr Voon was promoted as a finance director of Tip-Top Sdn Bhd (the company) on January 1, 2019 and was transferred from branch office in Perak to the main office in Nilai. He did not own any shares in the company. In 2019, he received the following remuneration/benefits: i) Salary and allowance RM (per month) Salary 9,000 Entertainment allowance 2,000 Travelling allowance 1,000 Parking allowance 300 ii) Bonus equivalent to 3 months salary. iii) As his accommodation was not ready, he stayed at a hotel from January to February 2019 where the room rate paid by company was RM200 per day. Subsequently he moved into a fully furnished bungalow for which the company paid a monthly rental of RM4,000 which included RM500 in respect of furniture and fittings. iv) A new car costing RM166,000 was provided to Mr Voon on 1 January 2019. Company also provides the fuel. A driver employed by the company was assigned to drive the car but only during office hour. Other than that Mr Voon needs to drive the car on his own. v) Medical and dental benefits for him and his immediate family worth RM10,000. vi) Handphone model Samsung worth RM2,300. vii) Lunch meal at a cost of RM50 per month. viii) He received dividends amounting to RM6,000 from his shares portfolio in Canada in 2019. He also received rental income (net) of RM150,000 from his family house in Belgium which is directly credited into his account in Canada. He also received interest income from his fixed deposits in CIMB Bank of RM8,450. Mr Voon incurred the following expenses in 2019: i) RM30,000 for entertaining the company's suppliers and customers. ii) RM6,000 on petrol and toll charges for travelling between his house and office. iii) RM8,500 on travelling expenses attending seminars and meeting related to the work. Mr Voon is married with four children. His wife Vivian is a homemaker. A detailed profile of his children is as follows: (i) Robert, 23 years old, is a final year student in University Malaysia and he is married; (ii) Veronica, 21 years old, is a second year engineering student in the United States. She is under a government scholarship but Mr Voon incurs another RM15,000 towards Veronica's expenses; (iii) Violet, 20 years old, is working as a bank clerk and she draws a salary of RM1,800 per month; (e) Rocky, 14 years old, is studying at Nilai International School. Mr Voon bought books and magazines costing RM1,350 in total for the family. He also pays a nursing aide RM1,500 per month for an Indonesian nurse to look after his mother who suffered a stroke in the previous year. His EPF contribution for the year is RM9,800. He pays life assurance premium on his life totalling RM2,700. He is able to support his claims with the necessary documentation and receipts. He contributed a sum of RM4,000 towards a private retirement scheme which is approved by the Securities Commission. Required: Compute the income tax payable by Mr Voon for the year of assessment 2019. Note: You should indicate by the use of the word 'nil' any item referred to in the question for which no adjusting entry needs to be made in the tax computation. Correct classification of income sources into the respective category {Section 13(1)(a), (b),C),(d) and (e)} is essential. (Total: 25 marks)