Mr. Edmund married Eunice on 24 October 2018. They have two children who are twins. Edmund has the following income for the year ended 31 December 2019:

1. Employment with a listed company as a senior marketing manager.

He is paid a monthly salary of RM15,000. A few times in the year, he travels to various countries in South East Asia to meet corporate clients. He is paid a total allowance of RM10,000 for the overseas work duties. The allowance is credited to a bank in Singapore.

Other forms of remuneration provided to him:

• A monthly traveling allowance for official duties of RM1,000.
• A new car costing RM175,000 was provided to him from 1 April 2019. No related car expenses were provided.
• A driver and a servant from 1 April 2019.
• One leave passage of RM11,000 to Austria for him and his family.
• Water and electricity bills (under the employer’s name) of RM5,000.
• Monthly child care allowance of RM500.

2. Dividend

Single tier dividend of RM6,000 and a foreign dividend remitted to Malaysia from Singapore of RM9,000 respectively.

3. Rental

A total rental of RM53,000 was received from renting a house. Included in the amount were a month’s advance rental of RM5,000 and a deposit of RM8,000. Expenses incurred relating to the house were:

Advertisement for first new tenant	1,000
Quit rent and assessment	500
Repainting of kitchen	2,300
Interest paid to the bank	4,000

Meanwhile, Eunice has the following income for the year ended 31 December 2019:

4. Tuition business

The adjusted income from the business is RM145,000. The current capital allowance and the unabsorbed business loss brought forward are RM22,000 and RM225,000 respectively.

5. Royalty

Payment of RM60,000 received from publishing textbooks for secondary schools. She incurred editing expenses of RM12,000 in publishing the book.

Other expenses incurred by Edmund during the year 2019 were:

1. Paid medical expenses of RM4,500 for Eunice’s mother.
2. Fitness equipment costing RM9,600.
3. A cash donation to an approved institution of RM3,000.
4. The EPF contributions by him and his employer were RM18,000 and RM21,000 respectively.

Required:

1. Compute the chargeable income of Mr. Edmund and Eunice (on a separate assessment basis) for the year of assessment 2019.

(All items stated in the question are to be included in the computation. Where an item is not taxable or deductible, indicate ‘nil’ in the computation).

2. Explain the tax treatment for the allowance of RM10,000 received in respect of work duties overseas (see note 1).                                                                                                                   
3. Explain tax treatment for leave passage (overseas and local). [30 marks]

Answer rating: 100% (QA)

Comp ute the charge able income of Mr Edmund and E un ice on a separate assessment basis for the yea... View the full answer