CONFIDENTIAL

FINAL EXAMINATION

COURSE : PERSONAL TAXATION

COURSE CODE : PTX1033

DURATION : 3 HOURS

INSTRUCTIONS TO CANDIDATES :

1. This question paper consists of FOUR (4) questions

2. Please check to make sure that this examination pack consists of :

i. The Question Paper
ii. Appendices – 1) Appendix 1: Tax Rates of Chargeable Income
2) Appendix 2: Capital Allowances
3) Appendix 3: Real Property Gain Tax Rates

3. The answers must be in handwriting. Please write your answers using a ball-point pen
on foolscap papers. The answer need to be submitted to your respective lecturer either
using:

i. Scan and submit the answer (in PDF) through OLES (Online Learning System) /
Google Classroom or any other medium OR,

ii. Scan and email the answer (in PDF).

4. Plagiarism, copying and cheating will not be tolerated where no marks will be given and
disciplinary actions can be taken.

MYKAD NO : _____________________________________________________
ID. NO. : _____________________________________________________
LECTURER : _____________________________________________________
SECTION : _____________________________________________________

DO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO

The question paper consists of 8 printed pages

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FEBRUARY2021/A/PTX1033

ESSAY

1. (25 points)

a.
i. Determine the qualifying plant expenditure under the following circumstances:

a. Motor vehicle not apply to commercial vehicle with the total cost of
RM170,000
b. The lorry was licensed for commercial purposes with the total cost of car
RM75,000
c. A second hand truck (license for commercial vehicle) purchased at RM90,000
d. Motor vehicle is provided for General Manager with cost of purchase
RM78,000
e. The company purchase a second hand motor vehicle amounted to RM65,000
(5 points)

ii. What are the qualifying plant expenditures entitle to claim capital allowance under
Schedule 3 of Income Tax Act 1967? (3 points)

iii. State TWO (2) conditions when balancing charge may arise. (2 points)

b. Manikam Jauhari Enterprise involves in printing business. It was incorporated on 1

April 2013 and made up its account annually to 30 June. The followings are the
assets owned by this company.

ASSETS RM DATE OF PURCHASE

Duplicating machine 67,500 17 April 2017

Digital printing machine 56,000 16 March 2018

Office equipment 7,900 18 July 2019

dy dah masuk utk 2020

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These are the fixed assets bought by the company throughout its operations:

1. The old duplicating machine was traded in for a new one on 1 February 2018. The
cost of the new machine is RM 75,600. The trade-in value was RM 60,000. disposal

2. Honda CR-V was purchased on 1 November 2016, the cash price being
RM 160,000. It is used by general manager. On August 2019, the car was sold for
RM 75,000. Non - commercial
disposal = (qce/cp) x sp

Required:

Compute the capital allowances and balancing charges or allowances (if any) for
Manikam Jauhari Enterprise for all relevant years of assessment up to 2020. Show all
workings. (15 points)

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2. (20 points)

On 31 August 2017, Luqman signed a sale and purchase agreement to acquire his second
residential property, a condominium for RM 380,000. Stamp duty and legal fees incurred
during the acquisition were of RM 9,000 and RM 11,000 respectively.

Luqman decided to renovate the kitchen and living hall area, incurring enhancement costs of
RM 67,000. He received RM 15,000 from the developer as compensation for damages to his
accommodation caused by the construction work at the nearby industrial area.

Burden with too much of commitments, Luqman wanted to sell the house and put it on
advertisement. On 15 April 2020, Luqman found the buyer, Wana and sold the condominium
to her for RM 470,000. Upon disposal, he incurred RM3,000 for advertisement and RM
2,200 for legal fees.

Required:
a. Compute the real property gains tax (RPGT) arising from the disposal of the
apartment by Luqman to Wana. (10 points)

b. State FOUR (4) circumstances where the disposal price of a chargeable asset is
deemed to be equal to its acquisition price. (4 points)

c. Explain the treatment of the disposal of a chargeable asset by way of a gift under the
RPGT Act 1976. (6 points)

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3. (30 points)
a.
i. Define the allowable business expenditure. (2 points)
ii. List THREE (3) examples of allowable business expenditure. (3 points)

b. Zara operates a boutique under the name of Zara Boutique. The following is the
Statement of Comprehensive Income for the year ended 31 December 2020:

RM RM
Gross sales 675,400
Less : Cost of goods sold 1 (309,000)
Gross profit 366,400
Add: Other Income
Profit from sales of motor van 10,600
377,000
Less : Expenses
Salary, bonus and EPF 2 82,416
Bad debts 3 3,700
Entertainment 4 4,850
Rent 5 36,000
Water and electricity 6 9,800
Depreciation 3,760
Taxes 7 3,280
Motor vehicles expenses 8 2,460
Miscellaneous expenses 9 5,900 (152,166)
NET PROFIT BEFORE TAX 224,834

Notes to the accounts:

1. Cost of goods sold included:

A stock worth for RM 3,500 taken by Zara for her owns use. The market value for the
stock is RM 4,200 was recorded.

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2. Salary, bonus and EPF consists of the following :

Salary Bonus EPF

RM RM RM
Zara 30,000 2,500 5,895
Isma 20,400 1,700 3,348
Sofea 14,400 1,200 2,973

3. Specific and general provisions for bad debts were RM2,000 and RM1,700
respectively.

4. Entertainment

Annual dinner and family staff RM 3,710

Hi tea for suppliers RM 1,140

5. Zara rented a double storey shop house. The ground floor was used for the business
while her family occupied the upper floor. The Inland Revenue Board has agreed that
65% of the rent were for business purposes.

6. Only 50% of the water and electricity expenses were for private usage.

7. Taxes consist of the following:-

Zara’s personal tax and road tax RM 2,710

Road tax for motor vehicle used in the business RM 570

8. It was agreed that 80% of the motor vehicle expenses were for business use.

9. Miscellaneous expenses include RM 3,570 air fares to Korean for Zara's daughter.

10. Capital allowance is RM 7,500 and balancing charge is RM 13,000 respectively.

Required:

Starting with net profit before tax, compute the statutory business income of Zara for the
year of assessment 2020. (Indicate 'nil' or '-' in the appropriate column for any item/s that
does not require any adjustment). (25 points)

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4. (25 points)

a. Define the following term:

i) Wife (2 points)
ii) Alimony payment (3 points)

b.
Amir owned a tuition centre in Kota Bharu and his wife Lini is an accountant at KEL Bhd.
Both of them are resident in Malaysia for the year 2020. Below were the income of Amir
and Lini.
Amir Lini
Business Income : sec 4a Rental income from terrace house in
Gross income RM 125,000 Kota Bharu:
Deductible expenses RM 60,000 Rental income RM 18,000
Allowable expenses RM 10,000 sec d
Dividend from ABX Bhd RM38,000 Gross Monthly salary RM 4,500 (EPF

sec 4c 11%-employee)
sec b
Royalty of RM 15,000 for the translation of
books approved by Ministry of Higher
Education (MOHE)
sec 4d

Additional information:
1. Lini spent on medical expenses in respect of her parent amounted to RM 7,000
2. During the year, Amir incurred RM 4,800 medical expenses for his father who was
hospitalized.
3. Amir spent RM 3,500 and RM 2,100 for medical and education insurance premium
respectively.
4. Amir and Lini were blessed with seven (7) children:
• Ahmad : 27 years old, married , Michigan State University, USA
• Basri 25 years old, work as Admin executive with YTL Group
• Che Da : 23 years old, studying at Brunel University, United Kingdom.
• Daud : 21 years old, disabled child, studying at Kolej Poly Tech MARA Kota
Bharu
• Ema : 19 years old, studying at UKM, Malaysia.
• Faiz: 13 years old, studying in MRSM Pengkalan Chepa.
• Gina : 11 years old, studying in SK Langgar, Kota Bharu
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5. Lini claimed child relief.

6. Amir bought laptop at cost RM 2,400 for Ema’s use on 25th October 2020.
7. Lini also subscribe Karangkraf’s Magazine for RM850 per year.
8. Amir purchased sport equipment cost RM700.
9. Amir spent RM 4,600 for Daud supporting equipment in 2020.
10. Life insurance premium paid by Amir was RM 3,500 on himself, his wife and children.
11. Amir paid zakat of RM 5,000 Pusat Zakat Kelantan.

Required:
Compute the income tax payable by Amir and Lini (separate assessment) for the year
assessment 2020. (20 points)

END OF QUESTION PAPER

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