The Process of your Income Before Being Taxed! aiyoyo..

Alright, always the issue of how much money will I be taxed, how can I run away from being taxed and etc.

Alright, below are the procedures that is taken from my lecture notes on how Chargeable Income (the income where the taxes are charged) are computed.

The steps is as follow (the following steps is very essential especially for taxpayer, at least you have a good understanding on the process of it);

1. Gross Income: all the income that includes any sums, before deduction of any allowable expenses
2. Adjusted Income: calculated by deducting all outgoings and expenses incurred in the production of gross income
3. Statutory Income: determined by adding balancing charge with the adjusted income any by deducting capital allowances
4. Aggregate Income: Combination of statutory incomes less the business losses from the previous year
5. Total Income: aggregate income - current year adjusted business loss, less others
6. Chargeable Income: Total Income - Personal Relief

I would like to take this opportunity in this post, to talk a little on Personal Relief. Apparently with so much taxes being taken away, from our income, our Government had the so-call incentives (thankful for feeding them with money), that is called the relief, as if you have wife, children, books, and etc.
The below are the list of reliefs (adapted from http://www.mida.gov.my/en_v2/index.php?page=personal-income-tax)

4.1.1 Personal Relief

The chargeable income of resident individuals is computed by deducting the personal reliefs from the total income. The types of relief available are:

Relief	RM
Self	RM8,000
Further self relief - disabled	RM6,000
Wife/ husband	RM3,000
Further wife/ husband relief - disabled	RM3,500
Medical expenses for parents;	RM5,000
Medical expenses for taxpayer, spouse or children on serious diseases (include RM500 for medical examination);	RM5,000
Expenses on supporting equipment for disabled taxpayer, spouse, children or parent;	RM5,000
Expenses on supporting unmarried children:
i. Below 18 years of age;	RM1,000
ii. Disabled child	RM5,000
iii. Over 18 years old (pursuing tertiary education at university or college)	RM4,000
Life insurance premiums or approved fund contributions	RM6,000
Insurance premiums for education or medical benefit	RM3,000
Annuity premium on annuity purchased through EPF Annuity Scheme	RM1,000
Fee of acquiring law, accounting, Islamic finance, technical, vocational, industrial, scientific or technological skills or qualification. In cases of post graduate studies, no restrictions on the field of study.	RM5,000
Purchase of books, journals and magazines and other similar publication (excluding newspapers).	RM1,000
Purchase of computer for once every three years with effect from the year of assessment 2007	RM3,000