Question 14 (10 marks):
Mr Fariss and his wife received annual salaries of RM 79 450 and RM 56 540 respectively in 2020. They each donated RM 645 to a goverment-approved welfare organization in that year. The table 3 shows the information of joint tax assessment and separate tax assessment that can be claimed by Mr Fariss and his wife while Table 4 shows the chargeable income.
Table 3
Table 4
Solution:
Total income tax for Mr Fariss and his wife by using joint tax assessment = RM 13 168
Total income tax for Mr Fariss and his wife by using separate tax assessment = RM 2 022.70 + RM 84.13 = RM 2 106.83
Thus, separate tax assessment is more suitable to be used by Mr. Fariss and his wife.
Mr Fariss and his wife received annual salaries of RM 79 450 and RM 56 540 respectively in 2020. They each donated RM 645 to a goverment-approved welfare organization in that year. The table 3 shows the information of joint tax assessment and separate tax assessment that can be claimed by Mr Fariss and his wife while Table 4 shows the chargeable income.
| Item | Joint tax assessment | Separate tax assessment | |
| Husband and wife | Husband | Wife | |
| Total income | RM 135 990 | RM 79 450 | RM 56 540 |
| Tax exemption | RM 1 290 | RM 645 | RM 645 |
| Tax relief | |||
| Individual | RM 9 000 | RM 9 000 | RM 9 000 |
| Lifestyle (limit RM 2 500) | RM 2 500 | RM 3 150 | RM 2 800 |
| Life insurance (limit RM 7 000) | RM 7 000 | RM 8 688 | RM 6 969 |
| Medical insurance (limit RM 3 000) | RM 3 000 | RM 4 550 | RM 2 955 |
| Zakat payment | RM 900 | RM 800 | RM 100 |
| Chargeable income (RM) | Calculations (RM) | Rate (%) | Tax (RM) |
| 20 001 – 35 000 | On the first 20 000 Next 15 000 | 3 | 150 1 200 |
| 50 001 – 70 000 | On the first 50 000 Next 20 000 | 14 | 1 800 2 800 |
| 100 001 – 250 000 | On the first 100 000 Next 150 000 | 24 | 10 900 36 000 |
Table 4
Calculate the total income tax for Mr Fariss and his wife by using joint tax assessment and separate tax assessments. Next state between the joint tax assessment and the separate tax assessment, which is more suitable to be used by Mr. Fariss and his wife.
Solution:
| Item | Joint tax assessment | Separate tax assessment | |
| Husband and wife | Husband | Wife | |
| Total income | RM 135 990 | RM 79 450 | RM 56 540 |
| Tax exemption | – RM 1 290 | – RM 645 | – RM 645 |
| Tax relief | |||
| Individual | – RM 9 000 | – RM 9 000 | – RM 9 000 |
| Lifestyle (limit RM 2 500) | – RM 2 500 | – RM 2 500 | – RM 2 500 |
| Life insurance (limit RM 7 000) | – RM 7 000 | – RM 7 000 | – RM 6 969 |
| Medical insurance (limit RM 3 000) | – RM 3 000 | – RM 3 000 | – RM 2 955 |
| Chargeable income | RM 113 200 | RM57 305 | RM 34 471 |
| Base tax | RM 10 900 | RM 1 800 | RM 150 |
| Tax on the next balance | Balance = 113 200 – 100 000 = 13 200 RM 13 200 × 24% = RM 3 168 | Balance = 57 305 – 50 000 = 7 305 RM 7 305 × 14% = RM 1 022.70 | Balance = 34 471 – 20 000 = 14 471 RM 14 471 × 3% = RM 434.13 |
| Tax rebate | – RM 0 | – RM 0 | – RM 400 (Chargeable income ≤ RM 35 000) |
| Income tax payable | RM 10 900 + RM 3 168 – RM 900 (Zakat) = RM 13 168 | RM 1 800 + RM 1 022.70 – RM 800 (Zakat) = RM 2 022.70 | RM 150 + RM 434.13 – RM 100 (Zakat) – RM 400 = RM 84.13 |
Total income tax for Mr Fariss and his wife by using separate tax assessment = RM 2 022.70 + RM 84.13 = RM 2 106.83
Thus, separate tax assessment is more suitable to be used by Mr. Fariss and his wife.