Please enable JavaScript.
Coggle requires JavaScript to display documents.
SPECIFIC DEDUCTIONS SECTION 14(1) (SECTION 14(1)(d) Impairment loss on…
SPECIFIC DEDUCTIONS
SECTION 14(1)
SEC 14(1)(a
) :
interest payable
on any money BORROWED for the purpose of acquiring income
MUST BE TRACEABLE
E.g Income--dividend----asset shares----Financed by Loan---interest charged(will be deducted against dividend income)
FOR EXAMPE:
LOAN TRANSACTION: TO acquire capital for business
PRODUCTION OF INCOME? Business Profit
INTEREST EXPENSE DEDUCTIBLE? Yes
DEDUCTED AGAINST: Sec10(1)(a) income:
ALLOWABLE INTEREST EXPENSES
1.Interest on Loans/Hire purchase used to acquire fixed assets employed in existing business
2.Interest on Bank Overdraft
3.Interest on loans used to acquire shares that produces income
DIS ALLOWABLE INTEREST EXPENSE
1.Interest loan used to pay dividends shareholder
2.Interest on loan to acquire assets
Interest on loans to pay income tax
SECTION 14(1)(d) Impairment loss on account receivable when deduction is granted, amount recovered will be treated as a trading receipt
Debt is related to trade
Debt has become irrecoverable and satisfied CIT
debt has been recognized as trader's income either in current or previous year
Specific Provision has been made
Debt has become bad or doubtful in the basis period
SECTION 14(1)(b) Rent in respect of any land or building occupied for the purpose of acquiring income.
E.g Rental of shops and office premises
SECTION 14(1)(c) Expenses incurred for REPAIR of premises,plant, machinery or fixtures employed in acquiring income or for the
renewal
Repair=Maintaining current working condition
Repairs that improve the condition=capital expenditure(not deductible)
SECTION 14(1)(e)
:
CPF contribution
when an Employer contributes to CPF or a designated approved pension or provident fund, the deduction allowed is limited to the amount of COMPULSORY CONTRIBUTION
55 years and below is 17%
55 years and above is 13%
Overall cap of total $102,000 per year
SECTION 14(1)(f): Contributes to the Medisave account of an employee in lieu of hospitalization benefits subject to a maximum deduction of $1500 per annum per employee
SECTION 14(1)(g) Religious dues Example:ZAKAT---tithe payable annually
Fitrah--amount of rice or its equivalent value in money payable annually at the end of fasting month