1. PERSONAL INCOME TAX (2012)
The purpose of INCOME TAX is to provide financing for government expenditure.
Taxable Income
The taxable incomes are from the employment such as salary.
Deduction on Donation
An individual can claim the deductions for cash donation to Government, State Government or an approved charitable institution or organization and the claim must be substantiated with original receipts. There is no maximum limit for the donation.

2. RELIEF
TYPES OF RELIEF
LIMIT
EXPLANATION
Self
RM9,000
Granted automatically and for disable taxpayer another RM6000 is allowed.
Wife/husband
(Joint assessment only)
RM3,000
Granted automatically if wife/husband has no income and for disable wife/husband another RM500 is allowed
Child Relief:
Below 18 years
18 years and
studying in an
institution of higher
Education
Disable child
RM1000
RM4,000
RM5,000
Unmarried child
No restriction on the number of children.
The wife is eligible to claim child relief if she is assessed separately

3. Contribution to EPF and Life Insurance Premiums (LIP)
RM6,000 maximum
Insurance policy secured on the life of the individual or spouse
Medical Expenses for Parents
RM5,000 maximum
Receipt has to be certified by medical practitioner and the expenses can be claimed by more than one individual
Purchase of supporting equipment for disabled self, spouse, child or parent.
Claim must be supported by receipt

4. Full personal medical checkup
RM500 maximum
SSPN
RM6,000 maximum
Nett saving
Personal computer
RM3,000 maximum
Every 3 years only
Books and megazines
RM1,000 maximum
Annual Internet Fee

5. REBATES
TYPES OF REBATE
LIMIT
EXPLANATION
Self / personal rebate
RM400 maximum.
Taxpayer is entitled to the relief if chargeable income does not exceed RM35,000
Wife/husband rebate
Eligible if the income of the wife/husband is assessed under joint assessment.
Zakat/Fitrah rebate
NIL
Claims must be supported by receipt from Religious Authority.

6. TAX RATE SCHEDULE FOR PERSONAL INCOME
Taxable Income (RM)
Rate
Tax (RM)
On the first
On the next
2,500 0% 1% 25
5,000 3%
150
10,000
175
300
20,000
15,000 7%
475
1,050
35,000
13%
1,525
1,950
50,000
19%
3,475
3,800
70,000
30,000
24%
7,275
7,200
100,000
150,000
27%
14,475
40,500
Excess over
250,000
28%
54,975

7. COMPUTATIONAL OF INCOME TAX
Formula
Total Income = Aggregate Income – Donation
Total Relief = Self + spouse + Children + EPF + LIP + Parent Medical
Chargeable Income = Total Income – Total Relief
Amount of Tax = use Tax Rate Schedule to compute.
Total Rebate = self + spouse + zakat + computer rebates
Tax payable = Amount of Tax – Total Rebates

8. TWO TYPES OF ASSESSMENTS
A) JOINT ASSESSMENT
Only one assessment for both of them and their incomes must be combined. Whatever deduction claimed will be limited to the amount stated except for EPF + LIP (husband + wife) are limited to RM6,000 only.
B) SEPARATE ASSESSMENT ( individual assessment )
Both husband and wife make their own assessment as a single person. In the case of children when wife is assessed separately, she may elect the appropriate deduction be allowed to her. If she so elects, relief in respect of the relevant child will be given fully to her. EPF + LIP are limited to RM6,000 to the husband and RM6,000 to the wife.

9. Example ( AL/OCT 2003/MAT112 – modified )
Zamri and his wife have 3 children below 18 years old. Their income for the year 2004 are as follows:
Zamri
Wife
Monthly salary
RM10,000 per month
RM3,000 per month
EPF monthly
RM1,000 per month
RM300 per month
LIP monthly
RM 20 -
Approved donation
RM5,000
Zakat
RM2,000
RM50
Calculate their tax payable for the assessment year 2005 if they elect separate assessment.

10. Separate Assessment
Zamri
Total Income
120,000
Less deduction
Self
8,000
Children
3 x RM 1,000
3,000
EPF + LIP
6,000
Approved donation
5,000
(22,000)
Chargeable Income
98,000

11. Using tax schedule
On the first RM70,000
7,275
On the next RM28,000 x 24%
6,720
Tax Amount
13,995
Less Rebate
Zakat
(2,000)
Tax Payable
11,995

12. Wife
Total Income
36,000
Less deduction
Self
8,000
EPF + LIP
3,600
(11,600)
Chargeable Income
24,400
On the first RM20,000
475
On the next RM4,400 x 7%
308
Tax Amount
783
Less Rebate
Personal rebate
350
Zakat 50
(400)
Tax Payable
383

13. Example ( CS/MAR 2005/MAT112 – modified )
En Harris has 5 children and his wife is a housewife. His eldest child is studying in UiTM while the rest are still schooling. His income and expenses for the year 2004 were as follows: RM
Salary
48,000
EPF
5,280
LIP
1,000
Parent medical fees
2,000
Donations
500
Zakat
200
Calculate the tax payable for the assessment year 2005.

14. Joint Assessment
En Harris and his wife
Total Income (Husband + Wife)
48,000
Less deduction
Self
8,000
Wife
3,000
Children
1x4,000 – University
4x1,000 – below 18 years old
4,000
EPF + LIP
6,000
Parent Medical Fees
2,000
Approved donation
500
(27,500)
Chargeable Income
20,500

15. Using tax schedule
On the first RM20,000
475
On the next RM500 x 7% 35
Tax Amount
510
Less Rebate
Personal Rebate
Wife Rebate
350
Zakat
200
(900)
Tax Payable
No tax payable for the assessment year 2005

16. Example
A couple with 3 children aged below 18 years old had an annual income as follows
Husband
Wife
Annual Salary
50,000
40,000
EPF (Employee Provident Fund)
5,000
4,000
LIP (Life Insurance Premium))
1,500
1,200
Parent Medical Bill
300
6,000
Zakat 60 50
Computer -
3,500
Donation
100
Compute their tax liability if they choose
Joint Assessment
Separate Assessment

17. a) Joint Assessment on husband’s name
TOTAL INCOME
RM90,000
Self Relief
RM8,000
Wife Relief
RM3,000
Children Relief 3 x RM1,000
EPF + LIP (husband+wife) maximum
RM6,000
Parent Medical Bill Husband only
RM300
Donation
RM100
(RM20,400)
CHARGEABLE INCOME
RM69,600
Tax
On the first RM50,000
RM3,475
On the next RM19,600 x 19%
RM3,724
TAX AMOUNT
RM7,199
Rebates
Zakat (RM50 + RM60)
RM110
Computer
RM500
(RM610)
TAX PAYABLE
RM6,589

18. b) Separate assessment - Husband
TOTAL INCOME
RM50,000
Self Relief
RM8,000
Children Relief 3 x RM1,000
RM3,000
EPF + LIP (husband) maximum
RM6,000
Parent Medical Bill
RM300
(RM17,300)
CHARGEABLE INCOME
RM32,700
Tax
On the first RM20,000
RM475
On the next RM12,700 x 7%
RM889
TAX AMOUNT
RM1,364
Rebates
Self Rebates
RM350
Zakat
RM60
(RM410)
TAX PAYABLE
RM954

19. b) Separate assessment - Wife
TOTAL INCOME
RM40,000
Self Relief
RM8,000
EPF + LIP ( RM4,000 + RM1,200)
RM5,200
Donation
RM100
Parent Medical Bill maximum
RM5,000
(RM18,300)
CHARGEABLE INCOME
RM21,700
Tax
On the first RM20,000
RM475
On the next RM1,700 x 7%
RM119
TAX AMOUNT
RM594
Rebates
Self Rebates
RM350
Computer
RM500
Zakat
RM50
(RM900)
TAX PAYABLE
RM0.00