Saturday, April 27, 2013

Deduction of RM5,000 for Education Fees


Question:-
I am a pharmacist. In 2012, I took a professional exam. There were no classes involved. I bought the e-book for US$300 (RM906) online, which I will claim under Books. I also paid US$700 (RM2,115) exam fees. Is this fee tax deductible? Do I claim it under education?

Answer:-
According to Section 46(1)(f) of the Tax Act, a maximum of RM5,000 is deductible in respect of fees expended by the taxpayer on himself in any institution or professional body in Malaysia recognised by the Government or approved by the Finance Minister, as the case may be, for the following:
(i) on any course of study up to tertiary level, other than a degree at Masters or Doctorate level, undertaken for the purpose of acquiring law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications; or
(ii) any course of study for a degree at Masters or Doctorate level undertaken for the purpose of acquiring any skill or qualification.
Please check whether your course of study falls within the above to determine your fees are deductible under “Education Fees”.

Profit for buying and selling share is taxable


Question:- Do I need to declare profit from buying and selling shares as an income?

Answer:-
Whether the profit from buying and selling of shares is regarded as a taxable income would depend on the facts and circumstances of the case. If the transaction can be demonstrated as a realisation of a capital investment, it can then be regarded as a capital gain not subject to income tax. On the other hand, if the transaction is derived from an adventure in the nature of a trade, then the profit from buying and selling of shares would then be seen as a revenue gain subject to income tax.

Thursday, April 25, 2013

Personal Relief - PRS and SSPN - FAQ



Question:- I have four children. Three registered under my wife and one registered under my name for the National Education Savings Scheme (SSPN). How is the tax rebate claimed in such a situation?

Answer:-
Your wife is entitled to claim the net deposits (but limited to a maximum of RM6,000) in the three accounts registered under her own name. Likewise, you are entitled to claim the same for the accounts registered under your name. The claim is only allowed for Years of Assessment 2012 to 2017.

How to open a SSPN account.


Question:- If I invest RM3,000 on the Private Retirement Scheme (PRS) this year, can I claim the rebate, then sell it early next year and reinvest? Can the reinvestment be claimable again against RM3,000? Can this approach also apply to the SSPN scheme?

Answer:-
An individual can claim an aggregate amount of payment of deferred annuity or contribution to the PRS or both up to maximum of RM3,000 for a year. In this respect, technically, you could claim contributions to PRS (assuming that you are not claiming for payment of deferred annuity) based on your aggregate amount of contributions to the PRS as evidenced by the relevant statement issued by the PRS.

However, effective from Jan 1 this year, the withdrawal of contributions from a PRS by an individual before he reaches the age of 55 would be subject to a withholding tax at the rate of 8%. In addition, contributions to a PRS may involve some terms and conditions which may not offer you the flexibility to switch over to another PRS in the subsequent year. The claim for deduction for contributions to PRS is from Years of Assessment 2012 to 2021.

With regard to the deduction for deposits in the SSPN account, the allowable deduction is limited to the net deposit (after taking into account the withdrawals during the same year) and up to a maximum of RM6,000. Further, we understand that there could be some restriction on the quantum that you could withdraw from the SSPN account. The claim for deduction for net deposit into the SSPN account is from Years of Assessment 2012 to 2017.


How to open a PRS account

Tax Deductible Expenses against Rental Income - FAQ



Question:-  I have a few properties, one of which is occupied by my son. Do I have to declare that as rental income? If there is another house left empty, do I have to declare that as well?

Answer:-
You only declare when you start to let out your properties.

Question:-  I receive a rental income from my new apartment. What are the deductions I can claim and are there limits?

Answer:- 
Expenses which are allowed deduction from rental income are the direct expenses that are wholly and exclusively incurred in the production of the rental income.
Examples of such expenses are as follows assessment and quit rent, interest on loan and fire insurance premium, expenses on rent collection, expenses on rent renewal, expenses on repair and service charges. However, only expenses incurred after the new apartment has been rented out are deductible from the rental income. Initial expenses are not deductible. Examples of initial expenses are the cost incurred to obtain the first tenant, such as advertising cost, legal cost to prepare rental agreement, stamp duty and commission for real property agent.



Question:-  I have two properties under joint ownership with my wife. The rental agreement is in my wife's name and she collects all proceeds. She is unemployed and we have separate assessments as she was working previously.Do we need to submit rental income in both our tax submissions equally divided or can she report all the rental income ?

Answer:- 
The registered owners (as evidenced in the title deeds or any equivalent documents to demonstrate ownership) of the properties are the rightful recipients of the rental income. Thus, both you and your wife would be required to declare your respective portion of the rental income in your individual tax returns based on the ratio of your joint ownership.
Question:- I am currently working overseas but own three properties in Malaysia. Do I need to declare anything to the Inland Revenue Board (IRB)?

Answer:-
Generally, Malaysian-derived income is subject to Malaysian income tax. As the properties are located in Malaysia, the rental income from the letting of properties is regarded as Malaysian-derived income. Therefore, you are required to declare the rental income to IRB by completing and submitting the relevant tax return form. The type of tax return to be submitted is dependent on your tax residence for the year concerned. Generally, tax resident individuals are subject to the progressive tax rates and entitled to personal reliefs/deductions and rebates. Non-tax residents are taxed a flat rate of 26% without any personal reliefs/deductions and rebates.


Questions:-  If I have two properties purchased under the DIBS during the qualifying period for housing loan interest deduction, say house A in 2009 (completion 2011) and house B in 2010 (completion 2014), can I claim deduction for house A from 2011 to 2013, and house B from 2014 to 2016? At any one time, I intend to claim deduction for one house only.

Answer:-
The current tax laws only allow an individual who is a Malaysian and tax resident to claim interest expenses on housing loan provided certain conditions are satisfied. Conditions are the claim is limited to only one unit of residential property, the sale and purchase agreement agreement is executed between 10 March 2009 and 31 December 2010, and you do not derived any rental income in respect of that residential property. If you have claimed interest expenses for house A in your 2011 tax return, you will be eligible to claim the interest expenses for house A in your 2012 and 2013 tax returns provided you have fully complied with the stipulated conditions. You would not be able to claim any deduction for house B.



 For more information : - http://www.iproperty.com.my/news/1904/how-to-save-tax-on-your-loan