I'm filing in my income tax now, but there's this part I don't understand.
How do I compute the value for column F (Qualifying Expenditure) in the Form HK 1.2.4? Is there any formula I can use?

Hi Everyone,
Can I ask a question regarding Interest on housing loan under Tax Release?

It says, "Interest on housing loan (must meet eligibility requirements) Sale and purchase agreements signed during the period 10/03/2009 - 31/12/2010 Interest on housing loan (Conditions for eligibility to claim must be fulfilled) The sale and purchase agreement has been Executed within 10/03/2009 - 31/12/2010"

Now, I signed my S&P agreement in 2011, so does that mean I cant put it this year?

Sorry for asking an obvious question but just wanted to be very sure before I submit.

Thank you for your help

Your S&P (Sales and Purchase) agreement - was it signed as per IRB's rules U shared and other T&Cs?
If it does not, which it obviously doesn't, then your housing loan does not qualify for this particular item.

Of course if your house was rented out, different item to knock-off mortgage interest then, IF lar

Thanks so much.
No, it was not rented out. Because we stay there haha.
Yes I guess that means cant put.

Thank you so much again.

HI all, need your advise on Column G, jumlah elaun / pemberian / manfaat yang dikecualikan cukai. How can actually deduce for this one???

Meaning the amount under this section is tax exempted. No need to put into BE form.

Can we actually deduce the amount from the overal earn amount??

I don't think so since it's tax exempted benefits in kin (BIK).

With reference to the Borang BE 2011, the (D18) Annuity plan for the year 2011 is set at RM 1K max. This was introduced in year 2010. However last year in Budget 2011, our beloved PM already announce that this has been increased to RM 3K.

D17 Insurans nyawa dan KWSP ( terhad 6,000)
D17 is where your EPF & life & medical insurance goes into and is limited to RM 6K.

D18 Anuiti tertunda (‘Deferred annuity’)
D18 will be increased to RM 3K for contributions made for 2012 and you're eligible to deduct from tax when you file for it next year.

D19 Insurans pendidikan dan perubatan (limited to Rm 3K)

However do take note for Prudential PruRetirement Reward for D18, at the moment is only approved for RM 1K. We are still waiting for the green light for it to be eligible for RM 3K.

PM me if you need further information on PruRetirement Reward. http://www2.prudential.com.my/corp/prudent...mentreward.html

I have been searching for this info but so far there's no clear explanation.

If let's say I bought a new computer in 2009, I already get the rebate for my Tax Year 2009. If I can do this every 3 years, so meaning I can buy a new computer in 2012 or 2013?

yes in 2012

This post has been edited by rayng18: May 14 2012, 12:21 PM

Thanks!

Qualifying expenditure is the lower of cost vs market value of the asset. This is assuming the asset is purchased on a cash basis.

If it is a hire-purchase asset, then the qualifying cost is equal to the principal amount of intalments paid during the year.

There are additional rules to be observed for motor vehicles.

Yes, it's for motor vehicles. May I know what are the other rules as mentioned?

I did a bit of research and found out that the figure can be calculated with rule 78. In fact, I also tried to call bank & they said they don't have the system to find out how much I paid for my principle last year & they also suggest rule 78.

Defered Annuity
As you approach retirement, you will be faced with the need for a secure source of income. If you are looking toward retirement, you may want to consider annuities as an integral part of your financial plan.

An annuity is a contract between an individual and an insurance company that provides the individual with tax-deferred accumulation and an option to receive a lump sum or fixed periodic payments starting on a specific date.

An annuity can offer benefits such as:

Tax-deferred growth.
No required distributions at age 70½. This means that your money can continue to grow tax-deferred over a longer period of time.
Control over when you pay taxes by timing distributions.
Unlimited contributions.
Option of guaranteed income for life.
Guaranteed fixed rate of return for a fixed annuity.
A death benefit that passes account value to beneficiaries, which may avoid probate, but is not tax-free.

Tax-Deferred Accumulation
If owned by an individual, all earnings in an annuity are free of current federal, state, and local income taxes until you start receiving annual payments. This enables all earned annuity income to compound without being reduced by current income taxes. Withdrawals of earnings are subject to ordinary income tax, and a 10% federal income tax penalty may apply if you take the distribution before you reach age 59½.

Accessing Annuity Income
Although a deferred annuity should be considered a long-term growth vehicle, it does give you access to your money when you need it. (Insurance company surrender charges may apply.) You decide how to access funds from an annuity. You can make withdrawals, receive a lump sum payment or annuitize your annuity and receive monthly payments for your lifetime.

Distributions from a deferred annuity on a non-annuitized basis are withdrawals of earnings first, and therefore taxable. Withdrawals exceeding earnings are considered a tax-free return of principal. This option keeps your money growing tax-deferred while allowing you to draw income. Since you determine the amount of the distributions, you control when and how much taxes you will pay. However, since you are making withdrawals and are not annuitizing the policy, the withdrawals are taxed as earnings first until all the earnings have been withdrawn.

If you choose to receive a lump sum distribution, you will receive the entire value of the contract. This option may be the least effective from a tax standpoint. You bear tax liability for all of your earnings in a single year, which may push you into a higher tax bracket and increase your tax bill. In addition, you have also lost the benefit of continued tax-deferred growth. If you choose a lifetime annuity option, you will receive annuity payments that are taxed according to a concept known as the exclusion ratio. Each payment consists of a partial payment of interest, subject to ordinary income tax, and a partial payment of your principal, tax-free, until all of your principal has been returned.

A federal income tax penalty of 10% is imposed on early withdrawals of earnings from an annuity. However, certain exceptions may apply. For example, the penalty will not apply to a distribution that is:

Made at the time, or after, the taxpayer attains the age of 59½.
Made to a beneficiary upon death.
Made as a result of the taxpayer's becoming disabled.
Part of a series of substantially equal periodic payments that are made for life.

With annuities, there are additional tax considerations you should be aware of. If you want to transfer an annuity to another person, ask about gift and income tax consequences. Finally, if you are buying an annuity for a trust, corporation, or partnership, be aware of the tax effect of Internal Revenue Code Section 72(u). If you want to buy more than one annuity, ask about "aggregation." If you want to move money from one annuity to another, consider a Section 1035 exchange to protect your money from the loss of certain tax advantages

- Motor vehicles that cost up to RM150,000 (on the road price), you can only claim up to RM100,000 qualifying expenditure max.
- Motor vehicles that cost more than RM150,000, you can only claim up to RM50,000 qualifying expenditure.
- The above rules do not apply if your motor vehicle is registered with the Commercial Vehicle Licensing Board, or if you run a "hire-and-drive" car rental business / tour guide business.

If you are paying rental for motor vehicles, the above restrictions apply to your accummulated rentals also.

If you are buying the motor vehicle through hire-purchase, you recognise qualifying expenditure based on the principal portion of the repayment (the HP company must split for you the principal from interest portion). And you can claim the principal payment in the year you make the payment, subject to the above restrictions also.

Example:-

1) You buy a kancil for RM60,000 - your qualifying expenditure is RM60,000
2) You buy a Honda for RM130,000 - your qualifying expenditure is RM100,000 (The excess RM30,000 is permanently lost)
3) You buy a merc for RM200,000 - your qualifying expenditure is RM50,000 (The excess RM150,000 is permanently lost)

If you bought the merc, and it was registered with CVLB, then you can claim the full RM200,000.

Is postpaid phone plan can be used as income tax reduction ?

Of course not

Hi CKJMark,

*regarding your answer to rule 78, - Motor vehicles that cost up to RM150,000 (on the road price), you can only claim up to RM100,000 qualifying expenditure max.

Do this vehicle need to register under company ? I am self - employed, earning sales commission from Securities firm. If need to register under company, I dunno how it is applicable to my scenario.
Waiting for your reply. Thanks.

I have a question for myself. I just got an offer to work oversea. The duration is more than a year. If let say my company pay the oversea tax do i still need to pay msia tax? my salary is in RM by local agency with epf and socso. What i know if i was paid in foreign currency then i dont have to pay msia tax but now is different and with epf some more.

Thank you for valuable advise. Cheers