TAX Computation

[seliong ak wau]

TAX Computation – until March 31st.

(As a CFP and IFP certified, aku ngaris (guide) tax planning and computation with clients.)

This topic is posted as an offer to answer questions on personal tax. Enti bisi business tax (small business aja), tau mega di tanya. Ngambi ke chunto: How to compute tax for Partnership business?

This offer is made on voluntary basis, and opinion provided in good faith. Enti aku enda nemu, I will say so, and you need to see a tax consultant.

“Limited to DAYAKS only.”

Thank you.

[seliong ak wau]

Enti nuan nanya: What income bracket is taxable? It shows you might have been paying unnecessary amount of tax. Huhh..?

Yes. Look at the basic tax structure:

A. Income: Salary, rental, dividend etc RM50,000 (example)

B. Less Reliefs:
Personal,
Medical,
parents’ medical,
wife,
children (all sorts of categories)
EPF/insurance,
computer (once in 3 years),
Treatment for serious sickness (Chronic).

Total RM20,000

C: Taxable income: A – B. RM30,000 taxable income - for this you refer to the computation table for the rate.

That basic structure should alert you on your reliefs not computed. For people doing sole-proprietorship or partnership, you can also take off as expenses on your transport (petrol, toll and capital allowances).

[seliong ak wau]

Section 4 of the ITA 1967 defined the following income as taxable:

Section 4 (a) Gain or profit from business for whatever period of time carried on
Section 4 (b) Gain or profit form employment
Section 4 (c) Dicidend, interest and discounts
Section 4 (d) Rent royalties and premium
Sec 4 (e) Pesnions annuities and other periodical payments
Sec 4 (f) gains or profits that do not fall under the above.

What about remittances from overseas? Since 1995, there is no tax on this.
What about prizes and other form of rewards? No, not regular income.

Resident status as defined under ITA?

Rebates? Under section 46 - section 49, you have a list of allowable rebates and amount.
If you have complex tax structure, you can still prepare your own returns. A book by Chong Kwai Fatt (Pricewaterhouse coopers) whould be a good guide.

Some other considerations to consider are:
Section 13 (1)(a): Direct payment
Section 13(1)(b) Benefits in kind (BIK)
Section 13(1)(c) Living accomodation
Section 13 (1)(d) Unapporoved fund withdrawal
Section 13 (1) (e): Compensation for loss of employment.

I am not an expert in taxation, relevant laws and all the allowable rebates. As I often joked "I am concerned about making making, not paying." However it is also important we do not overpay our tax in order we have enough money ofr investment. Tax planning is in fact part of investment. Tax planning is also part of my studies in Financial Planning.

Questions are only limited to Dayaks. Thank you.