2000 BUDGET ISSUE


 
4. Income Tax Rate for Companies [Paragraph 2, Schedule 1]

There is no change in the 28% rate of income tax for companies.


5. Personal Deduction for Individual and Hindu Joint Family [Section 46(1)]

Currently, the personal deduction for an individual or a Hindu joint family is RM4,000. In addition, an extra RM 1,000 is automatically granted for dependent relatives.

It is proposed that the personal deduction allowed for an individual (in respect of himself and his dependent relatives, if any) or a Hindu joint family be increased to RM8,000 effective year of assessment 2000 (current year basis).



6. Deduction for Medical Expenses - Serious Disease [Section 46(1) (g)]

Current legislation provides for a deduction of up to RM5,000 in respect of medical expenses incurred by an individual on himself, his wife or his child suffering from a serious disease or in the case of a wife, on herself, her husband or her child suffering from the said disease.

It is proposed that the language of the further proviso in Section 46(1)(g) be improved such that, from year of assessment 2000 (current year basis), where the wife has no total income, any amount expended by her shall be deemed expended by her husband so long as the deduction does not exceed RM5,000.



7. Education or Medical Insurance Premium [Section 49]

It is proposed that from year of assessment 2000 (current year basis), the current ceiling of RM2,000 given to a resident individual for any premium paid by him for the purchase of insurance on education or for medical benefits be increased to RM3,000.


8. Employees Provident Fund (EPF) Annuity Scheme [New Sub-Section 49(1C)]

The EPF is promoting the purchase of an annuity under the EPF Annuity Scheme.

It is proposed that a new relief of RM1,000 be granted to a resident individual for any premium paid by him, or his wife but deemed paid by him, for the purchase of an insurance policy determined by the EPF Board utilising the amount standing to his credit in the EPF. Where his wife has no total income, the total deduction allowed shall not exceed RM1,000.

The above proposal is to be effective from year of assessment 2000 (current year basis).



9. Tax Exemption on Income in respect of Musical Composition / Translation of Books / Literary Work [Paragraph 32A, Schedule 6]

Tax exemption is presently accorded in respect of RM12,000 income received by a resident individual for any musical composition, translation of books or literary work at the specific request of any agency of the Ministry of Education or the Attorney General's Chambers provided the income does not form part of his emoluments in the exercise of his official duties.

It is proposed that effective from year of assessment 2000 (current year basis) the exemption level be increased from RM12,000 to RM20,000.


10. Application to Vary Tax Instalments [Section 107B(2)]

Currently, under the preceding year basis, a person who is required to make payments by instalment on account of tax may apply to the Director General of Inland Revenue (DG) not later than the fifteenth of April in that year of assessment to vary the amount and number of instalments.

With the change from the preceding year basis to the current year basis of assessment from year 2000, it is proposed that a person may make an application for a variation of the amount and number of instalments before the thirtieth day of June in that year of assessment.

This proposal is to be effective from year of assessment 2000 (current year basis).




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