Tax267 Feb2021 Ss.pdf

CONFIDENTIAL 1 AC/FEB 2021/TAX267
UNIVERSITI TEKNOLOGI MARA

ANSWER SCHEME
COURSE : TAXATION 1
COURSE CODE : TAX 267
EXAMINATION : FEBRUARY 2021
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
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QUESTION 1
A. TWO (2) types of income which are exempted from tax in Malaysia:
 Foreign income of any person arising from sources outside Malaysia and
remitted into Malaysia.
 Compensation for loss of employment if due to ill health.
 Dividends paid under single-tiered system.
 Interest accruing to a resident individual from deposit placed in licensed
institutions.
(OR any acceptable answers)
(Any 2√ x 2 marks = 4 marks)
B. TWO (2) events that give the rights to taxpayers to make an appeal:
 When a taxpayer is dissatisfied with the deemed notice of assessment or
additional assessment.
 Personal reliefs have not been appropriately given
 Taxpayer have forgotten to claim certain expenses for reliefs
 There is an error on the assessment issued by IRB office

C. FOUR (4) responsibilities of individual taxpayers:
 Furnish tax return within stipulated time
 Declare all income correctly
 Keep supporting documents such as receipts and purchase of books within
7years
 Computing and paying own income tax payable
D.
YA Period of stay No. of Status/ Reasons

days Section
2017 1/4 – 28/4 28 R√ In Malaysia for at least 90 days √ and
20/10 – 20/12 62 s 7(1)(c)√ 3 out of 4 the immediate preceding
90 YAs (YA2016, YA2015, YA2014) he
was a resident or stays√ in Malaysia
for at least 90 days or more√
2018 Nil 0 R√ Resident in 3 immediate preceeding
s 7(1)(d)√ YAs (YA2017,YA2016,YA2015) √ and
resident in the immediate following YA
(YA2019) √
2019 31/7 – 31/12 154 R√ In Malaysia less than 182 days and the
s 7(1)(b)√ period is linked to YA2020√
for at least 182 consecutive days
inclusive TA√
2020 1/1 - 9/2 40 R√ In Malaysia at least 182 days√
10/2-28/2 (19) TA s 7(1)(a)√
29/2-31/12 307
347
(16 x ½ mark = 8 marks)
(Total: 20 marks)
QUESTION 2
Computation of Statutory Employment Income of Alisha for the YA2020

RM RM
s 13(1)(a) Salary (9,000 x 11 months) 99,000√√
Entertainment allowance (1,000 x 11 months) 11,000√√
Petrol allowance (500 x 11) – 6,000 exemption Nil√
Parking fees allowance - exempted Nil√
Reimbursement – servant salary (800 x 11) 8,800√
Interest on loan = 3% x RM400,000 = 12,000
Subsidised interest on loan = 300,000/400,000 √ x
12,000 = 9,000 x 11/12 = 8,250 √ 3,750√ 122,550
s 13(1)(b) Furniture (280 x11 months) 3,080√

Car (9000/2 x 11/12) 4,125√
Driver (600 x 11 months ) 6,600√
Corporate membership (200 x 11 months) 2,200√
Leave passage – Melbourne, Australia
Cost of airfares (3,500 – 3,000 √ exemption) 500 √
Meals & accommodation 5,000 √
Dental treatment – exempted Nil√ 21,505
s 13(1)(c) Bungalow
Defined value (2,000 x 11) = 22,000 √
OR 30% x S13(1)(a) [ 30% √ x 122,550 (OF) √=
36,765
WIL √ therefore = 22,000 22,000
s 13(1)(d) Withdrawal from unapproved fund

(250,000 x 60%) 150,000√√
s 13(1)(d) Compensation for the loss of employment

[140,000 – (10,000 x 8)√] 60,000√
GROSS EMPLOYMENT INCOME 376,055

LESS: ALLOWABLE EXPENSES
Entertainment expenses (11,000 x 50%) (5,500)√
Nominal rent (400 x 11 months) (4,400)√
STATUTORY EMPLOYMENT INCOME 366,155
(28 √ X ½ mark = 14 marks)
QUESTION 3
Computation of Statutory Business Income of Bonda Enterprise for the YA2020
RM RM
Net Profit as per SOPL 147,700√
Add: Adjustment-Drawing (diff) (1,800 – 1,500) 300 √
148,000
Less: Non-Business-income
Interest income (CIMB bank) 4,500√
Interest income (Customers) 8,900√
Rental income 10,800√ (24,200)
123,800
Add: Non-Allowable Expenses
Remuneration:
Salary, bonus and EPF (Halim) 97,000√
Salary and bonus (normal employees) NIL√
EPF (all employees) 17,615√
44,500-(19% x 141,500 = 26,885)
Fees:
Accounting service NIL√
Fines paid for exceeding speed limit 1,800√
Legal fees for purchase of land 3,500√
Legal fees on recovery of trade debts NIL√
Fees for designing business logo 2,400√
Entertainment expenses:
Gift vouchers to customers NIL√
Annual dinner for employees NIL√
Lunch with suppliers (2,500 x 50%) 1,250√
Family Day with staff and their families 5,400√
Donations:
Business zakat 4,200√
Contribution made to a political party 2,500√
Contribution to an approved institution:
(Infrastructure for the poor s 34(6)(h)) NIL√
Repair and maintenance:
Repair of delivery van NIL√
Renovation of business premise 6,800√
Installation of new air conditioner in the premise 2,600√
Repainting of Halim’s house 2,300√
Bad debts:
Net increase in specific provision NIL√
Net increase in general provision 3,200√
Trade bad debts written off NIL√
Travelling expense:
Carriage cost for delivering stock to customer NIL√
Halim’s holiday to Langkawi 3,000√
Water and electricity expenses (80%) NIL√
Water and electricity expenses (20%) 1,460√
Compensation to dismissal an employee NIL√
Depreciation 12,800√ 167,825
291,625
Less: Double deduction

Remuneration of disabled employee (16,200) √
Adjusted Business Income√ 275,425
Less: Capital Allowance (25,000)
Statutory Business Income√ 250,425
(36 √ x ½ mark = 18 marks)
QUESTION 4
A. THREE (3) circumstances a wife may elect for joint assessment:
 The husband and wife must be living together and did not in the basis year
cease to live together or to be husband and wife of each other.
 The wife elects in writing before 1st April in the following YA.
 She must have total income to be aggregated with her husband.
 If the wife is non-resident for the basis year for a YA, she must be Malaysian
citizen.
(Any 3 √ x 2 marks = 6 marks)
B.
Computation of Income Tax Payable for YA2020
Samad Athirah
RM RM
s 4(a) Business Income
Adjusted BI 81,000 √
(-) Capital allowance (25,000)√

Statutory Business Income 56,000
(-) Unabsorbed buss loss b/f -
Net Statutory Business Income 56,000 56,000
s 4(b) Employment Income
Salary (8,800 x 6 (Jan-June)) 52,800 √

Gratuity (50,000-(1,000 x14 years)) 36,000√
s 4(c) Dividend, Interest
ASB - exempted Nil √
s 4(d) Rent, Royalty
Terrace house
Rental received (2,000 x 3) 6,000√
Less: allowable expenses
Quit rent (1200 x 3/12) (300)√
Advertisement cost NA√
Repair and maintenance NA√
5,700 5,700
Apartment
Rental received (1,000 x 12) 12,000√
Less: allowable expenses
Quit rent (600)√
Repair and maintenance (500)√
10.900 10,900
Royalty:
(65,000 – PARA 32D exempt 20,000) 45,000√
s 4(f) Other Income
Honororium 55,000√
AGGREGATE INCOME √ 117,600 143,800
Less: Approved Donations:

Cash (6,000+3,500=9,500) (9,500)√
(restricted to 10% of AI = 14,380)
TOTAL INCOME√ 117,600 134,300
Reliefs:
Self relief (9,000)√ (9,000)√
Wife relief (Puan Siti 4,000 + 3,500) (7,500) √
Child relief:
Sufian NA √
Syaqira NA √
Sofwan (2,000) √
Medical expenses serious disease Pn Siti (6,000) √
Basic Supporting equipment - wheel chair Pn Siti (limit (5,000) √
6,000)
Mutually exclusive:
Medical expenses, Father (3,200 + 2,500) (limit 5,000) (5,000) √
Or parental care 2,500 (limit 1,500)
Life style expenses: (limit 2,500) (2,500)√
Samad: 450 +2,100
Athirah:2,500 + 2,000 + 6,000 = 10,500 (2,500)√
EPF: Sakinah (11% x RM52,800 = RM5,808) - restricted to (4,000)√
Life insurance premium – restricted to (3,000)√
Medical insurance – restricted to (3,000)√
CHARGEABLE INCOME√ 80,600 112,800
Computation of income tax payable:
Samad
Tax on the first (70,000) 4,600√
Tax on the next (10,600 x 21%√) 2,226 6,826
Athirah
Tax on the first (100,000) 10,900√
Tax on the next (12,800 x 24%√) 3,072 13,972
Rebate:
Zakat (3,000)√ (10,000)√
NET INCOME TAX PAYABLE√ 3,826 3,972
√ provided for all correct sections i.e: s 4(a) – s 4(e)
(40√ x ½ mark = 20 marks)
(Total: 26 marks)
QUESTION 5
A. TWO (2) circumstances of non-entitlement of agriculture allowance are:
i. If at the end of the basis period, he was not the owner of the asset√
ii. If at the end of the basis period, the asset is not use for the purpose of the
business √
iii. If the asset is transferred and it was not use for the purpose of the business
within one (1) month before transfer √
(Any 2√ x 1 mark = 2 marks)
B.
Car
Capital portion = Cash price – Deposit
No of installment
= RM200,000 – RM 50,000
60 months
= RM2,500 √
YA RM
2018 QE (Deposit + No of installment)
[RM50,000 √ + (RM2,500 x 9) √ but restricted to 50,000 √
IA (20%) √ (10,000)
AA (20%) √ (10,000)
RE 30,000
2019 AA (20%) (10,000) √
RE 20,000
2020 AA (20%) (10,000) √
RE 10,000
(8√ x 1 mark = 8 marks)
Computer
YA RM
2020 QE 4,500
IA (20%) √ (900)
AA (20%) √ (900)
RE 2,700
(2√ x 1 mark = 2 marks)
Constructed Factory
RM
Cost of land Nil √
Architect’s fees 45,000 √
Cost of clearing the land 30,000 √
Electrical wiring and fitting 55,000 √
Construction costs 750,000 √
Aggregate Cost 880,000
10% Rule
Since the office (NIB) is more than 10% (1/8 = 12.5%) √ of the total floor area,
therefore the qualified QBE is = 7/8 x RM880,000 = RM770,000. √
YA RM
2019 QBE 770,000
IA (10%) √ (77,000)
AA (3%) √ (23,100)
RE 669,900
2018 AA (3%) (23,100) √
RE 646,800
(√10 x 1 mark = 10 marks)

(Total: 22 marks)
END OF SOLUTION
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CONFIDENTIAL 1 AC/FEB 2021/TAX267

UNIVERSITI TEKNOLOGI MARA

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

(OR any acceptable answers)

YA Period of stay No. of Status/ Reasons

Computation of Statutory Employment Income of Alisha for the YA2020

s 13(1)(b) Furniture (280 x11 months) 3,080√

s 13(1)(d) Withdrawal from unapproved fund

s 13(1)(d) Compensation for the loss of employment

GROSS EMPLOYMENT INCOME 376,055

STATUTORY EMPLOYMENT INCOME 366,155

(28 √ X ½ mark = 14 marks)

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

Less: Double deduction

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

(-) Capital allowance (25,000)√

Salary (8,800 x 6 (Jan-June)) 52,800 √

Less: Approved Donations:

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

(√10 x 1 mark = 10 marks)

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

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