INCOME TAX ACT 1967 (ACT 53)
PART III - ASCERTAINMENT OF CHARGEABLE INCOME
Chapter 4- Adjusted income and adjusted loss
Section 34. Special provisions applicable to adjusted income from a business.
(1) In ascertaining the adjusted income of a person from a business for the basis period for a year of assessment, deductions shall be made from the gross income from the business for that period in accordance with the following subsections (the person, business, period and gross income in question being referred to in those subsections as the relevant person, the business, the relevant period and the relevant gross income respectively).
(2) There shall be deducted in the case of any debt as defined in subsection (3)-
(a) if at the end of the relevant period the debt is reasonably estimated in all the circumstances of the case to be wholly irrecoverable, an amount equal to the amount of the debt;
(b) if at the end of the relevant period the debt is reasonably estimated in all the circumstances of the case to be partly irrecoverable, an amount equal to so much of the debt as is estimated to be irrecoverable,
the deduction being in either case reduced by the amount of any deduction made under this subsection rerespect of the debt for the basis period for a year of assessment prior to the year of assessment to which the relevant period relates.
(3) In subsection (2) "debt" means-
(a) a debt arising in respect of any matter referred to in subsection 24(1) or in respect of interest of the kind referred to in section 24(5), where the amount of any such debt has been included in the relevant gross income or in the gross income of the relevant person from the business for the basis period for a year of assessment prior to the year of assessment to which the relevant period relates; or
(b) a debt arising in respect of a loan of the kind mentioned in subsection 24(5) granted in the course of carrying on the business in the relevant period or in the basis period for any such prior year of assessment.
(4) Where in the relevant period the relevant person has made a contribution to an approved scheme in respect of an employee of his, then-
(a) if the employee's remuneration as determined under the rules, regulations, by-laws or constitution of that scheme for the period for which the contribution is made (that period being a period which coincides with or overlaps the relevant period) is deductible as a whole, or in parts aggregating the whole, in computing the adjusted income from the business for any basis period or periods for a year or years of assessment in relation to the business, there may be deducted from the relevant gross income an amount equal to the contribution or nineteen per cent of the employee's remuneration as so determined for the period for which the contribution is made, whichever is the less;
[Am. Act 578:s.9]
(b) if only a part or parts of that remuneration is or are so deductible, there may be deducted from the relevant gross income an amount equal to so much of the contribution or of that percentage of the remuneration (whichever of those amounts is the less) as bears to the whole of the contribution or to that percentage of the remuneration, as the case may be, the same proportion as that part or the aggregate of those parts, as the case may be, bears to the whole of that remuneration.
(5) Where on the first establishment of a scheme of the kind referred to in subsection (4) a special contribution thereto is made in the relevant period by the relevant person whereby any of his employees engaged in activities relating to the production of the relevant gross income or gross income of the relevant person from the business for the basis period for a year of assessment (that basis period being prior to the relevant period) may qualify for the benefits under that scheme, the Director General may when approving that scheme authorize deductions in respect of that special contribution of such amounts (being amounts which in total are equal to or less than the special contribution) from the gross income of the relevant person from the business for the basis periods for such years of assessment as he thinks fit.
(6) There may be deducted from the relevant gross income-
(a) an amount equal to any payroll tax paid by the relevant person in the relevant period in respect of any remuneration paid by him to any person employed by him in the production of gross income of his from the business;
(b) an amount equal to any turnover tax in respect of the turnover of the business paid by the relevant person in the relevant period;
(c) where any part of the relevant gross income is derived from the working of a mine, such amounts in respect of capital expenditure as may be allowed for the relevant period pursuant to Schedule 2;
[Am. Act 476:s.5]
(d) where any part of the relevant gross income is derived from the working of a farm relating to cultivation of crops, an amount equal to any expense (not being an expense which is qualifying expenditure or qualifying agriculture expenditure for the purposes of Schedule 3 or incurred in the acquisition of land or anything growing thereon) incurred by the relevant person in the relevant period in replanting the farm for the purposes of cultivation of crops or in effecting any improvement of the farm or any part of the farm in connection with such replanting;
[Am. Act 497:s.4]
(e) an amount equal to the amount of expenditure incurred by the relevant person in the relevant period on the provision of any equipment necessary to assist any disabled person employed by him in the production of gross income of his from the business;
[Ins. Act 476:s.5; Am. Act 497:s.4]
(f) an amount equal to the expenditure incurred by the relevant person in the relevant period in respect of translation into or publication in the national language of cultural, literary, professional, scientific or technical books approved by the Dewan Bahasa dan Pustaka;
[Ins. Act 497:s.4; Am. Act 557:s.8]
(g) an amount equal to the expenditure incurred by the relevant person in the relevant period on the provision of library facilities which are accessible to the public and in respect of contributions to public libraries and libraries of schools and institutions of higher education.
[Ins. Act 513:s.6; Am. Act 557:s.8]
Provided that the amount that may be deducted shall not exceed one hundred thousand ringgit.;
(h) an amount equal to the expenditure incurred by the relevant person in the relevant period on the provision of services, public amenities and contributions to a charity or community project pertaining to education, health, housing infrastructure and information and communication technology, approved by the Minister:
[Ins. Act 557:s.8; Am. Act 591:s.4;
Am. Act 608:s.6]
Provided that where a deduction has been made under this paragraph, no further deduction of the same amount shall be allowed under subsection 44(6);
(i) an amount equal to the expenditure incurred, not being capital expenditure on land, premises, buildings, structures or works of a permanent nature or on alterations, additions or extensions thereof or in the acquisition of any rights in or over any property, by the relevant person in the relevant period on the provision and maintenance of a child care centre for the benefit of persons employed by him in his business;
[Ins. Act 557:s.8; Am. Act 578:s.9]
(j) an amount equal to the expenditure incurred by the relevant person in the relevant period in establishing and managing a musical or cultural group approved by the Minister.
[Ins. Act 557:8; Am. Act 578:s.9;
Am. Act 608:s.6]
(k) an amount equal to the expenditure incurred by the relevant person in the relevant period for sponsoring any arts or cultural activity approved by the Ministry of Culture, Arts and Tourism:
Provided that the amount deducted shall not exceed two hundred thousand ringgit; and
[Ins. Act 578:s.9; Am. Act 608:s.6]
(l) an amount equal to the expenditure incurred by the company in the relevant period on the provision of a scholarship to a student for any course of study leading to an award of a diploma, or degree (including a degree at a Masters or Doctorate level) or the equivalent of a diploma or degree undertaken at a higher educational institution established or registered under the laws regulating such establishment or registration in Malaysia or authorised by any order made under section 5A of the Universities and University Colleges Act 1971[Act 30]:
Provided that the scholarship-
(a) shall only be given to a student-
(i) who is receiving full-time instruction at such higher educational institution;
(ii) who has no means of his own; and
(iii) the total monthly income of whose parents or guardian, as the case may be, does not exceed five thousand ringgit; and
(b) shall not include payments other than payments required by such higher educational institution relating to the course of study, and educational aids and reasonable cost of living expenses during the student's period of study at such higher educational institution;
[Ins. Act 608:s.6; Am. Act 619:s.4]
(m) an amount equal to the expenditure, not being capital expenditure, incurred by the company in the relevant period for the purposes of obtaining certification for recognized quality systems and standards, and halal certification, evidenced by a certificate issued by a certification body as determined by the Minister:
Provided that the expenditure incurred in the relevant period shall be deemed to be incurred by the company in the basis period for the year of assessment in which the certificate is issued; and
[Subs. Act 608:s.6; Am. Act 619:s.4]
(n) an amount equal to the expenditure incurred by a person in the relevant period on the provision of practical training in Malaysia, in relation to his business, to an individual who is—
(i) resident in the basis year for a year of assessment; and
(ii) not an employee of that person.
[Ins. Act 619:s.4]
(7) There may be deducted from the relevant gross income any expenditure, not being capital expenditure incurred on plant, machinery, fixtures, land, premises, buildings, structures or works of a permanent nature or on alterations, additions or extensions thereof or in the acquisition of any rights in or over any property, incurred by the relevant person during the relevant period on scientific research related to the business and directly undertaken by him or on his behalf.
(8) Where any deduction in respect of any matter is capable of being made under this section, no deduction or allowance in respect of that matter shall be made under section 33 or Schedule 3, as the case may be.
[Am. Act 476:s.5]
| Related reading: |  |
| [ Act 513:s.6; Act 578:s.9;
Act 476:s.5; Act 497:s.4; Act 608:s.6; Act 619:s.4] |
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