Simplesmile,

Yes, you can construct you wages in that kind of structure, but bare in mind, the tax allowance issue can be changing year to year, sometimes, it is kind of troublesome for company to restrucuture the salary to meet the changing rules. Company generally won't bother to change the whole system (especially for company having many employee one), as it means troublesome in acounting as well as auditing issue.

Sometimes, it is not wise to save up some on tax allowance issue by reducing the basic salary and large portion to allowance side.
Eg. previously you have 5,000 basic and no allowance. Now you want to save a bit of tax, then change it to 4,000, and lot of allowance that allowed for tax relief.

Why I said so, because if company want to retrench the employee, compensation is solely based on basic alone.

give and take lar.

you want to save now you suffer later lor.

Lower basic also means lower increment as it's based on Basic

Source

Am i in the right section?

My dad asked me if i wanted a new computer.His budget is RM3K.I was suprised why so sudden?he said to reduce his income tax.

So i was wondering if i planned to build my own pc(more cheaper and more powerful) rather then buying from a company like Dell HP etc2, can that be count as buying computer as well?I'll be buying them online which includes receipt as well.

i would think so, because your are building a full computer

I see .What if my computer doesnt have a monitor? can reduce a bit

Printers are not tax-deductible according to LHDN officer's briefing

it's simple, just tell the shop to include the printer cost in to the computer hardwares cost. then list the printer as freebie. then your problem is solved!

also can do that meh?

Whenever possible do not list printer in the receipt/invoice

why not, you can argue that it's a promotion/package

If the printer is included, LHDN will try to pro-rate the price of the printer even if it's bundled.

Eg. Computer + Printer = RM3000
Printer may pro-rate to RM500, thus effectively you can claim RM2500 only.

1. Increase expenditure - More effective to Sole Proprietor and Sdn Bhd. For Both Sole Proprietor and Sdn. Bhd., Only Expenditure that is use for business operation are allowed for tax deduction or Otherwise for Sole Proprietor, refer to below website. For example if you are a Director of the Company and you bought a ticket to Paris for Vacation and not for business purpose, the Amount of air fair cannot be included as company's Expenditure.

2. Buy lots of assetts - vehicles h&p, building s&p, etc - ONLY apply to Sdn Bhd.

3. Pay high salary to "family employees" - Some people do that, But u have to proof that u really give them the Amount of salary by Amount u paid for EPF at KWSP, otherwise, LHDN will says it's a Drawing from the Owner of the company.

For Updated Individual (Sole Proprietor & Partnership) Tax Relief, U can refer to Inland Revenue Board of Malaysia - Individual

For Company, You can refer to Public Rulings

This post has been edited by chamyk2311: Sep 30 2009, 10:04 AM

based on the IRB notes attached with the Form B/BE, there is no clear guideline that printer cannot claim under the Computer Relief.

Just in case, the officer review your case, they want to add back the printer cost, there will only be extra balance of tax. shouldn't be any penalty on the mistake since there is no clear definition on 'Computer'.

therefore, i would say that 'it worths a try'.

only noob officer would issue additional tax on those small figures of taxes. RM200 * 27% * 60% = RM32.40

waste time and energy, rather go catch some big fishes

what if i just buy the pc without the monitor,can? also count as a computer?

This post has been edited by Turnip: Sep 30 2009, 03:35 PM

of course, but may not worthwhile to claim since the cost is lower without the monitor.

@nothingz: Under Section 46(1)(j), A tax rebate of RM3,000 given once in every 3 years to an individual for the purchase of a personal computer for family use. Effective Date, Year of Assessment 2007.

So, A personal Computer is refer as a set of Desktop Computer, Laptop Computer & Handheld Computer. Printer is an Hardware and definitely cannot be included for tax deduction as the IRB does not states that "Hardware" can be claim under computer Relief.

@Turnip. A PC without a Monitor cannot be claimed because it's not a PC anymore. It is known as a Hardware too. A Personal Computer must contain a Monitor, a CPU, a Key Board and a Speaker in a Single Receipt. Therefore, if Your bought a new Hard Disk for your computer, I'm sorry, they are not included for Tax deduction too.

This Explanation Does not created By me nor my Audit Firm's Auditor. It's explained by A Fellow Member of The Association of Chartered Certified Accountants (FCCA) in a Practical Auditing which will be held every year when there is Amendments in Income Tax.

FYI: You cannot Simply put Something for claim as "Worth a Try" because IF IRB discovered a Mistakes in Your Tax Computation, you will be in a very Big trouble. If they take it easy on you, they will penalize u for the Year only. If they took it seriously, they will not only penalize you for that year only, they will penalize every previous 10 years. That is why we need to refer a Auditor for Advice before we Submit our Form B/BE. Therefore, All others Personal Reliefs must exactly same with the Legislation. Even a small amount is counted (You know how Poor our government now right?).

This post has been edited by chamyk2311: Oct 1 2009, 10:17 AM

But it says under "buying Computer" means it could be a supercomputer,personal computer etc.Supercomputer doesn't have monitors etc.Erm thanks for the info anyway.

This post has been edited by Turnip: Oct 1 2009, 12:21 PM

Very well said....

The Legislation says purchase "A Personal Computer". So, Your supercomputer receipts must have included a monitor, otherwise they won't let you to have the rebate. They can give you the excuse saying that it is a Hardware. You know how poor in our government now right? The will try to get as much taxes as they can while we must provide solid proofs to shut their mouth.

This post has been edited by chamyk2311: Oct 1 2009, 02:26 PM