Chapter 9 PTX1033/Personal Tax

CHAPTER 9

PERSONAL RELIEF &

REBATES AND PERSONAL
TAXATION

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FORMAT COMPUTATION OF INCOME TAX PAYABLE FOR INDIVIDUAL

RM RM RM
Section 4 (a) - Business income
Business I
Gross income XX
Less
: wholly and exclusively expenses (X)
Adjusted INCOME XX
Add
: Balancing charge X
Less
: Capital allowance
unabsorbed capital allowance b/f (X)
current year capital allowance (X)
balancing allowance (X) (X)
Statutory income XX

Business II
Gross income XX
Less
: wholly and exclusively expenses (X)

Adjusted LOSS Nil

Add
: Balancing charge X
Less
: Capital allowance
unabsorbed capital allowance b/f (X)
current year capital allowance (X)
balancing allowance (X) (X)
Statutory income XX
Aggregate of statutory income XX
Less
: Business lossess b/f (X)
XX

Section 4 (b) - Employment income

Section 13 (1)(a) - monetary value * (note 1) X
section 13 (1)(b) - benefits in kind * (note
2) X
Section 13 (1)(c) - living accommodation * (note 3) X
section 13 (1)(d) - unapproved fund * (note
4) X
Section 13 (1)(e) - compensation * (note 5) X
XX
Less
: Allowable expenses * (note 6) (X) XX

Section 4 (c) - Dividend, interest &

discounts (DID)
Dividend
Gross income XX
Less
: Allowable expenses (X) XX

Interest

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Gross income XX
Less
: Allowable expenses (X) XX

Discounts XX XX

Section 4 (d) - Rental, royalties &

premiums (R²P)
Rental
Gross income XX
Less
: Allowable expenses (X) XX

Royalties
Gross income XX
Less
: Exemption (X) XX

Premiums XX XX

Section 4 (e) - Alimony, pension &

annuity (APA)
Alimony XX
Pension XX
Annuity XX XX

Section 4 (f) - Other income

Income that does not fall into sec 4a to sec 4f XX
AGGREGATE INCOME         XXX
Less
: Current year business loss (current year) (XX)
Approved donation
sec 44(6)(i): donations to Gov, state (X)
gov, a local authority

sec 44(6)(ii): donations to approved institutions/Gov

(CASH CONTRIBUTION will be restricted
to :)
- non company 7% from Aggregate
(X)
income
- company 10% from Aggregate
(X)
income
sec 44(6A): donations of artefact, (X)
manuscript or painting to Gov

sec 44 (8): cash donation to libraries

(public, school, institutions of higher (X)
education)
(restricted to RM 20,000)

sec 44(9): cash or contribution in kind

for provision of facilities in public (X)
places for disabled person

sec 44(10): cash or medical equipment to (X)

approved healthcare facility (restricted

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to RM 20,000)

sec 44(11): painting to national or state (X)

art gallery

sec 44(11A): zakat perniagaan (restricted (X)

to 2.5% of Aggregate income)

sec 44(11B): cash contribution or in kind

for approved sport activity, restricted
to :
- non company 7% from Aggregate
(X)
income
- company 10% from Aggregate
(X)
income

sec 44(11C): cash contribution or in kind

for project of national interest,
restricted to :
- non company 7% from Aggregate
(X)
income
- company 10% from Aggregate
(X)
income (XX) (XX)

TOTAL INCOME         XXX

Less
: Reliefs
(9,000
personal relief )
(6,000
disabled taxpayer )
wife / husband relief (if wife elects (4,000
joint assessment) )
(5,000
disabled wife/husband (additional relief) )

child relief :

disabled child (unmarried) (6,000) per child

child (under 18) (2,000) per child

child (over 18): not studying/married NIL
child (over 18): studying at local (8,000
universities ) per child
child (over 18): studying at overseas (8,000
universities ) per child
Per
(14,000 chil
Disable child (over 18) :studying ) d
(8,000
medical expenses for TAXPAYER's PARENTS ) (restricted to)
(supporting document- evidence)
(8,000 (restricted to)
medical fees for TAXPAYER, SPOUSE + )
CHILDREN on serious diseases or
vaccination up to RM1,000 (w.e.f YA
2021)  (include RM 1,000 for complete

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medical examination)

basic supporting equipment for disable (6,000

TAXPAYER, SPOUSE, CHILDREN or PARENTS ) (restricted to)

fees education for TAXPAYER

This includeThis includes fees for
attending upskilling and self-
enhancement courses , limited to (7,000
RM1,000 (w.e.f YAs 2021 to 2022) ) (restricted to)

Lifestyle:
purchase or subscriptions of reading
material
personal computer, tablet and smart phone
purchase of sport equipment
internet subscription (2,500
gym membership fees ) (restricted to)

(3,000
Takaful / Life insurance premium )
Approved provident fund contribution
(EPF) (4,000)
(the total relief for life insurance
premium & EPF not exceed RM7,000)

education and medical insurance TAXPAYER, (3,000

SPOUSE + CHILDREN ) (restricted to)

Parental Care (father and mother) (1,500) each

Private retirement scheme (3,000)
(8,000
amount deposited into SSPN for his child )

Domestic travelling expenses (payment

for accommodation and fee for (1,000)
entrance to tourist
attractions) (Special Relief for expenses
incurred between 1 March 2020 until 31 December 2021.

Additional relief (on top of

lifestyle relief) for expenditure
related to cost of purchasing sports
equipment, entry/ rental fees for
sports facilities and registration
fees for sports competitions of RM500
(w.e.f. YA 2021) (500)

Breastfeeding equipment (1,000)

Fees paid to child care center and

kindergarten (1,000)
250

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SOCSO
(XXX
total reliefs )
CHARGEABLE INCOME         XXX

Tax payable (at scaled rate) XX

Less
: Rebates
Rebate if chargeable income is LESS than RM35,000 (400)
Rebate (wife) - for joint assessment (400)
zakat and fitrah (XX)
Rebate for departure levy paid for
performing umrah and pilgrimage to
holy places. (twice a life time) (XX)

NET INCOME TAX PAYABLE         XX

1.0 INTRODUCTION

An individual’s income tax liability is determined by aggregating all his sources of income such
as business, employment, investment and other sources of income to arrive at total income.
Relief and rebate would reduce the amount of income tax payable.

2.0 RELIEF
Reliefs are available to an individual who is a tax resident in Malaysia in that particular YA.
Companies, trusts, clubs and estates under administration are not entitle o reliefs and rebates.

2.1 Meaning of wife

Wife means a woman who is regarded by virtue of any law or custom as the wife
of a man or as one of his wives.

2.2 Definition of child

A child is defined to include:
i) A legitimate child of the individual or his wife;
ii) A step child of an individual (inclusive of his wife’s);
iii) A child adopted by the individual or his wife in accordance with any law.

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2.3 Definition of disable person

Disable person is defined in s 18 to mean any individual certified in writing by
Department of Social Welfare to be disable person.

EXAMPLE

En Muhammad and his wife Puan Khadijah are resident in Malaysia for the year 2021. Below
were the income of En Muhammad and Puan Khadijah :

En Muhammad

1. Monthly salary of RM 3,200 (section 4b)

2. Dividend: RM 3,000 from Bank Islam Berhad (section 4c)
RM 2,000 from ASB

3. En Muhammad has an apartment in Ampang and it was rented out. Below are the
information relating to the apartment : (section 4d)
Monthly rental RM1,500

Quit rent (per annum) RM1,000

Repair RM7,000

4. Business income (section 4a)

Adjusted income RM24,000
Balancing charge RM3,500
Capital allowance RM7,800

Puan Khadijah

1. Business Income (section 4a)

Adjusted loss RM6,800
Balancing charge RM2,300
Capital allowance RM5,600

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2. Monthly salary of RM 5,000 (section 4b)

3. Royalty of RM 28,000 for the translation of books approved by Dewan Bahasa dan Pustaka
(section 4d)

Additional information: - relief

1. En Muhammad and Puan Khadijah were blessed with seven children :

Qaasim : 25 years old, married

Abdullah : 23 years old, married and full time student at KPTM

Ibrahim : 21 years old, physically disabled and studying in UiTM

Zainab : 17 years old, married

Rukaiyah : 15 years old, physically disabled

Fatimah : 10 years old, studying at SMK Ampang Tasik

Umi Khalsom : 3 years old

2. Puan Khadijah claimed relief for all children

3. RM 3,500 education insurance premium paid by En Muhammad
4. Puan Khadijah bought a wheel chair costing RM 2,800 for Rukaiyah
5. En Muhammad and Puan Khadijah spent RM 1,000 and RM1,600 respectively on books
6. En. Muhammad bought a sport equipment and one original jersey amounted to RM530
and RM250 respectively. (jersey tk leh claimed)
7. Life insurance premium paid by En Muhammad was RM 7,000 on himself and his wife
8. En Muhammad and Puan Khadijah paid zakat of RM 2,000 and RM 2,500 to Pusat Zakat
Selangor (rebate)
9. Puan Khadijah enrol her daughter Umi Khalsom at child care centres (registered with the
Department of Social Welfare) near her office and paid RM350 every month.
10. Both elected for separate assessment

Required:
Compute the income tax payable by En Muhammad and Puan Khadijah for the YA 2021.

Computation of the Income Tax Payable by Muhammad and Khadijah for YA 2021

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Muhammad Khadijah
RM RM RM RM
Section 4a

Adjusted Income / (loss) 24,000 Nil

(+) Balancing charge 3,500 2,300
(-) Capital allowance (7,800) (5,600)
Statutory Income 19,700 Nil

Section 4b
Salary 3,200 * 12 38,400 5,000 * 12 60,000

Section 4c
Dividend – Bank Islam exempted Nil
- ASB Exempted Nil

Section 4d
Rental
Rental income [1,500 * 12] 18,000
(-) Allowable Expenses
Quit rent (1,000)
Repair (7,000) 10,000

Royalty
Royalty received (translation) 28,000
(-) exemption Para 32A (12,000) 16,000

AGGREGATE INCOME 68,100 76,000

Less: current year business loss (6,800)
TOTAL INCOME 68,100 69,200

Less : Reliefs
Personal 9,000 9,000
Child :
Qasim NA
Abdullah NA
Ibrahim 14,000
Zainab NA
Rukhaiyah 6,000
Fatimah 2,000
Umi Kalsom 2,000
Education Insurance –max 3,000
Supporting equipment 2,800
Life style 1,530 1,600
Life insurance premium 3,000
EPF (11% * 38,400) = RM4224 max 4,000
(11% * 60,000)= RM6,600 max 4,000
Child care center - max 1,000
(20,530) (42,400)

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CHARGEABLE INCOME  47,570 26,800

Muhammad Khadijah
Income tax payable:
First RM 35,000 RM600
Next RM 12,570 *8% RM1,005.60
1,605.60
First RM20,000 150
Next RM6,800*3% 204
345
Less : Rebates
Zakat (2,000) (2,500)
CI < RM35,000 (400)
Net tax payable Nil Nil

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