Reference no: EM133013289

Question - COMPUTATION OF TAX PAYABLE - Mad Sidek is a director of a company from which he receives a salary of RM10,000 per month. He also received director's fees of RM5,000 during the year ended 31 December 2019. The benefits provided to him included:

Accommodation for which the company pays monthly rental of RM3,000 (the company did not provide any furnishings for the house).

Employer's contribution to the Employee's Provident Fund of 16% of salary.

A company car costing RM150,000.

A part-time gardener who is paid RM400 per month.

A domestic servant who is paid RM500 per month.

Leave passage for himself and his family (in 2019, they went to Japan for their holiday and the company paid RM6,000 for their air fairs).

Mad Sidek also received the following Malaysian income during the year ended 31 December 2019:

Royalties of RM22,500 from the publisher of his book on taxation.

Rental income of RM2,200 per month.

He pays interest of RM560 per month on a loan obtained to purchase the property. He also paid assessment and quit rent of RM1,350 per annum as well as cost of repairs amounting to RM4,500 made up of repainting (RM1,000) and extension of the kitchen (RM3,500).

Mad Sidek's wife earns a salary of RM3,200 per month. She is allowed to make use of a company car (cost RM70,000) during office hours but is but allowed to drive it home. She also has interest income of RM850 from her savings account with Bank Simpanan Nasional. She made a cash donation of RM2,500 to an approved institution as well as donated books worth RM1,200 to the same institution.

Mad Sidek and his wife contribute to the EPF at the statutory rate of 11%. They have three children:

Irina, 20 years, who is studying at the University of Southampton, England. The annual costs of educating and maintaining her in 2019 amounted to RM18,300.

Illyana, 15 years, who is schooling in Singapore. The annual costs of educating and maintaining her in 2019 amounted RM4,500.

Daud, 13 years, who is schooling in Malaysia and staying with his parents.

During the year, Mad Sidek also incurred RM5,500 in medical expenses in respect of his parents. He also has a life insurance policy taken out on the life of his wife on which he pays a premium of RM1,400 per annum. He also made zakat and fitrah contributions amounting to RM5,600 in 2019.

Compute the tax payable by Mad Sidek and his wife for the year of assessment 2019 (separate assessment).