Part 1

Objective

This assignment focuses on key provisions of the Malaysian Income Tax Act 1967. It includes identifying disallowable expenses, understanding when interest income is deemed Malaysian-sourced, distinguishing between tests for capital nature items, explaining ‘royalty’ under the Act, outlining instances for child relief claims, and preparing capital allowance and residual expenditure schedules for business assets. The aim is to enhance students’ knowledge and practical application skills in Malaysian tax law.

Requirements

1. Questions
   
   1. Identify and explain any FOUR (4) expenses which are disallowable Section 39 ofthe Income Tax Act 1967.
   
   2. Explain under the Income Tax Act 1967 instances whereby interest income is deemed to be derived from a Malaysian source.
   
   3. Distinguish between “the enduring benefit asset test” and the “fixed and circulating capital test” when testing for items which are “capital in nature”.
   
   4. Explain “royalty” under the Income Tax Act 1967.
   
   5. Provide instances whereby a taxpayer can claim child relief  according to Section 48(1) of the Income Tax Act 1965.
   
   6.(a) Provide the costs incurred on the plant or machinery used for the purpose of the business which is entitled to be included as  “qualifying expenditure”in tax law.
   
   (b) Tingtong bought the following assets during the year 2017 for his retail business. The Inland Revenue has sent notice to him that he is being audited for the years of assessment 2018 to 2022.
   – A van costing RM30,000
   – Air conditioner costing RM3,000
   – Table and chairs costing RM2,000
   – Computer costing RM4,000
   
   Required:
   
   Prepare the capital allowance and residual expenditure schedules for the aboveassets for the years of assessment 2018 to 2021.

Part II

Online Class 

Discuss the following topic(s) in the forum and submit proof of your participation in the online discussions: