Karen , a Malaysian citizen and resident is a top scientist at Super Palm Oil Berhad. She is married to Jimmy and the couple has a year old baby boy. Karen 's employment income and other relevant details for the year of assessment (YA) 2020 are as follows: She was paid a monthly gross salary of RM200,000Her employer deducted 11% from her salary in respect of her contributions to the employees provident fund (EPF).Karen was provided with a monthly child care allowance of RM1,200.She was entitled to an interest subsidy based on a loan of RM600,000 to buy a house in Ara Damansara. The interest subsidy received by Karen for the year RM82,000.She received a service excellence award of RM8,000.Karen 's employer incurred RM7,000 for her medical benefits under an employee's medical insurance scheme.As her work for the company was excellent, her employer provided a leave passage of RM5,000 to Sri Lanka during Chinese New Year.Her employer liquidated a pension scheme atter the application for approval of the scheme for tax purposes was rejected by the tax authorities. She received RM12,000 of which her portion was RM7,000 and her employer's portion was RM5,000.Karen is multi-talented. She received a royalty of RM12,000 from writing the theme song to the Astro Awani News.She sold her shares of Tenaga Nasional Berhad for RM190,000. She bought the shares for RM100,000 in 2015.Karen purchased breast feeding equipment during the year for RM3,000. Jimmy 's relevant details for YA 2020 are as followsHe received interest income of RM35,000 from a fixed deposit placed at Affin Bank.He received interest RM4,000 from a loan he gave to a classmate.Jimmy incurred an adjusted loss of RM2,000 from his boutique business. The couple decided to file a joint assessment together under Karen’s name. RequiredCalculate Karen 's chargeable income and income tax payable for the year of assessment 2020.You should indicate by the use of '0' any item referred to in the question for which no entry needs to be made of for which no personal reliefs are given in the tax computation.[30 marks]Discuss whether Jimmy’s move to elect for joint assessment under his wife’s name for the year of assessment 2020 is a right move or not.[5 marks]As Karen is a very important employee to Super Palm Oil, it was rumoured that Karen will be added to the list of employees entitled to the Employee Share Option Scheme (ESOS) programme in 2021.Explain the treatment of this programme to Karen’s.Please give explanation and calculation in details.

Income from remunerative work performed by a person while they are an employee in a relationship…

Answered: Karen , a Malaysian citizen and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Karen , a Malaysian citizen and resident is a top scientist at Super Palm Oil Berhad. She is married to Jimmy and the couple has a year old baby boy.

Karen 's employment income and other relevant details for the year of assessment (YA) 2020 are as follows:

She was paid a monthly gross salary of RM200,000
Her employer deducted 11% from her salary in respect of her contributions to the employees provident fund (EPF).
Karen was provided with a monthly child care allowance of RM1,200.
She was entitled to an interest subsidy based on a loan of RM600,000 to buy a house in Ara Damansara. The interest subsidy received by Karen for the year RM82,000.
She received a service excellence award of RM8,000.
Karen 's employer incurred RM7,000 for her medical benefits under an employee's medical insurance scheme.
As her work for the company was excellent, her employer provided a leave passage of RM5,000 to Sri Lanka during Chinese New Year.
Her employer liquidated a pension scheme atter the application for approval of the scheme for tax purposes was rejected by the tax authorities. She received RM12,000 of which her portion was RM7,000 and her employer's portion was RM5,000.
Karen is multi-talented. She received a royalty of RM12,000 from writing the theme song to the Astro Awani News.
She sold her shares of Tenaga Nasional Berhad for RM190,000. She bought the shares for RM100,000 in 2015.
Karen purchased breast feeding equipment during the year for RM3,000.

Jimmy 's relevant details for YA 2020 are as follows

He received interest income of RM35,000 from a fixed deposit placed at Affin Bank.
He received interest RM4,000 from a loan he gave to a classmate.
Jimmy incurred an adjusted loss of RM2,000 from his boutique business.

The couple decided to file a joint assessment together under Karen’s name.

Required

Calculate Karen 's chargeable income and income tax payable for the year of assessment 2020.

You should indicate by the use of '0' any item referred to in the question for which no entry needs to be made of for which no personal reliefs are given in the tax computation.

[30 marks]

Discuss whether Jimmy’s move to elect for joint assessment under his wife’s name for the year of assessment 2020 is a right move or not.

[5 marks]

As Karen is a very important employee to Super Palm Oil, it was rumoured that Karen will be added to the list of employees entitled to the Employee Share Option Scheme (ESOS) programme in 2021.

Explain the treatment of this programme to Karen’s.

Please give explanation and calculation in details.

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