Question 2 Would the following constitute assessable income? Give brief reasons

Question

Question 2

Would the following constitute assessable income? Give brief reasons for your answers.

a)    Wages from part time employment as a bar attendant.

b)    Director's fees paid by a company.

c)    A lottery prize of RM10,000.

d)   A voluntary payment of RM5,000 to a solicitor by a generous client. The solicitor had already been paid by the client for work done.

e)    Payment received under an agreement to deal only in a certain brand of products.

f)     Proceeds of an insurance pay out on a policy in respect of the theft of household goods.

Explanation / Answer

The following would constitue assessable income:-

a) Wages from part time employment as a bar attendant

Reasons:- Wages from part time employment is an income derived in normal course of business/profession/rendering services. Hence it is part of assessabel value.

b) Directors fess paid by a company

Reasons:- This is regarded as employment income.

d) Voluntary payment of RM 5,000 :-

Reasons:- Since these arise out of services rendered, would form part of assessabel income.

Note: The question is solved as per Malaysian laws since payment received in RM (Malaysian Ringet)

lottery income is not taxable income in Malaysia. Further payment received under an agreement to deal only in certain brand of products is capital receipt. Further proceeds of an insurance pay out on a policy in respect of theft of household goods is not part of assesable income since it is in nature of compensation of loss and hence not taxable

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