Assignment Task: You are required to analyze the contents of the stimulus package and need to discuss the aim of such package introduced in February 2020.
Case Study:
Mr Sambar born on 1/1/1965 married to PuanMeenu who is 5 years younger than him, born on the same date and month as the husband. They got married on1/7/1991.Tax file number of Mr.Sambar is SG 8765-9876-21.The following data is given in respect of Mr. Sambar:
Mr.Sambar, aged 55, retired as a manager in a Kari SdnBhd on 31 July 2019. He had worked in Kari SdnBhd since 1 December 2007. During the year 2019, Mr.Sambar received the following payments and benefits from the company:
Net monthly salary of RM7,700 after deducting EPF contribution of 11% and scheduler tax deduction of RM1,200.
Upon retirement, he received a gratuity of RM90,000.
Watch costing RM1,800 as an appreciation of his long service with the company.
A fully-furnished house was provided by the company for the period 1 January 2019 to 30 April 2019. The monthly rent of RM1,200 (including furniture of RM160) was paid by the company.
Dental surgery expenses incurred for his child RM4,000.
A holiday package for him and his wife to Australia including:
(a) Air fares (includes insurance of RM3,000) RM13,000
(b) Hotel accommodation RM 11,000
1. He withdrew RM80,000 from the company's unapproved retirement fund of which RM40,000 represents his contributions.
2. On 1 August 2019, Mr.Sambar was offered a post as a non service director in Rasam SdnBhd with the following remuneration scheme:
i. Director fees of RM8,000 per month, ignore EPF contribution.
ii. Entertainment allowance of RM3,000 a month.
iii. Mr.Sambar was provided with a mobile phone. The cost of all business calls was paid by the company.
iv. A new company car costing RM220,000 was purchased and provided to Mr.Sambar with a driver from 1 August 2019. Fixed cash fuel benefit also provided to him, at a cost of RM7,000.
v. For the month of August 2019, Mr.Sambar was provided with accommodation in a hotel, with daily room rate of RM250, during his visit to the branch office in Kuala Lumpur. The company gave him RM500 per month for him to pay for his house rental from November 2019.
vi. The company also provided him with a servant and a gardener with a monthly salary of RM600 and RM500 respectively, effective from 1 September 2019.
vii. Mr.Sambar's wife, PuanMeenu is a housewife. She likes to invest in overseas market. During the year 2019, she received RM4,000 dividend from foreign investee companies. Mr.Sambar received RM10,000 from Masala Bhd being a single tier dividend.
viii) Additional information:
a) They have four unmarried children and the details are as follows:
Age Name Status
First child 29 years Vadai Working
Second child 21 years Idli Studying in University Malaya
Third child 19 years Muruku Physically disabled & studying at Dublin Univ.
Fourth child 16 years Poori Adopted child and studying in a secondary school
b) During the year 2019, Mr.Sambar incurred the following expenses:
RM 1,800 for a complete medical examination on himself.
RM 4,000 medical expenses for his parents.
RM 1600 on a wheel chair for his third child.
RM 550 for purchase of "The Star" newspaper.
c) Mr.Sambar purchased a computer costing RM 3,500 in YA 2019 for her second child. He has purchased and claimed tax relief on a computer costing RM3,000 in 2018 for himself.
d) Life insurance policies were purchased and paid by Mr.Sambar for him and his third child with a monthly premium of RM500 and RM600 respectively.
e) Mr.Sambar made approved cash donations of RM22,000.
Required: Draft a letter attaching a solution for the following issues:
Part A:
(a) Compute the income tax (if any) payable by Mr.Sambar for the year of assessment 2019, clearly showing Aggregate Income/Total Income/Chargeable Income Tax
Liability/Tax Payable.
All the items listed in the questions must be presented whether they are taxable or not.
(b) Discuss the significance of determining the residence status of Sambar for Malaysian income tax purpose.
ASSIGNMENT
Required: Write a letter to Sambar addressing the tax issues for the following matter
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Attachment:- Case Study-Taxation.rar