Non-Business Income

Question 1

Define non-business income and give examples of such income based on the provisions of ITA 1967.

Question 2

There are no specific types of income that are always classified as "business income" or “non-business
income”. Discuss.

Question 3

John lets out his condominium for the first time commencing from 1.4.2023 for RM2,000 a month. He
pays annual assessment of RM1,000 and annual quit rent of RM120 for year 2023. He also incurs
advertising cost of RM300 for obtaining the first tenant and legal fees of RM680 paid to HS Lee & Co for
preparing rental agreement. Compute the adjusted income from rent for Year of Assessment 2023.

Question 4

Jeyapalan received the following sources of income in the year 2023.

a) Dividend income:

Dynamic Bhd (Single tier) 6,000

b) Interest income:

RM3,600 interest on savings in Bank Simpanan Nasional (BSN) (licensed under FSA 2013).

c) Rental income:

Taman Taman
Cahaya Desa
RM RM
Monthly rent 2,000 3,000
Cost of air-conditioner 2,000 -
Annual quit rent and assessment 1,600 2,000
Repairs 4,000 3,000

Compute the aggregate income for Jeyapalan for the year of assessment 2023.
Question 5

Sarina bought a semi-detached house (“property”) in 2019 and had it rented out since then. On 1
January 2023 a new tenant moved in. Sarina has furnished the following statement of rental income for
the year ended 31 December 2023.

Statement of rental income for the period 1 January 2023 - 31 December 2023
RM RM
Gross rental received 36,000
Refundable rental deposit from new tenant 3,000 39,000

Less: Expenses
Quit rent 330
Assessment 780
Fire insurance premium on building 1,350
Replacement of damaged bathroom door 640
Replacement of the old air conditioner 1,800
Extension of storage space to kitchen 3,000
Interest on loan 14,000 21,900
Net rent 17,100

Sarina has provided the following additional information:

(i) Quit rent of RM330 includes RM30.00 being amount short paid for the previous year.

(ii) Sarina obtained a bank loan to purchase the property in 2019. In 2023, another bank, MBF offered a
much lower interest rate. The balance of the old loan was RM130,000 at the end of 2019. Sarina
then transferred her finance to MBF which approved a non-revolving loan of RM175,000. She used
the balance of RM45,000 as working capital for her business. For the year ended 31 December 2023
she paid an interest of RM14,000 and claimed this against her rental income.

Required:

Compute the adjusted rental income of Sarina from the property for the year of assessment 2023.