Tax relief for transportation allowance

[apollo]

Hi,

In budget 2009 there are tax relief for transportation allowance that is RM2,400 for going to work, and RM6,000 for business related transportation.

Where do I enter those in TaxSaya as relief?

TaxSaya is a very useful program and if it meets my requirement, I'll fire my tax consultant and register to paid version.

[Thanabalasingam]

Hi,

Well, I'm glad to hear that taxsaya has "fired' you up. Indeed knowledge is key and it is very empowering. Tax should start with everyone on the street and I believe taxsaya has helped to do just that by providing the tool to bring back some control of one's taxes into his/her  hands judging from the "educated" questions we are receiving.

Anyway, answering your question.

The Exempted BIK ( Benefit in Kinds ) for transportation is stated in your EA Form under PART G.

For your computation, TaxSaya recognises only the total amount declared in your EA FORM after the Part D which is your TOTAL TAXABLE SALARY.
(which does NOT include the exempted BIK's.)

As such if you wish for record purposes, you CAN enter these exempted amount (BIK) in under the employment income section in taxsaya but it does not affect your tax as you are only taxed on your TOTAL TAXABLE SALARY. (TOTAL AFTER PART D)

Hope that helps.

Regards,

Thana

[apollo]

As such if you wish for record purposes, you CAN enter these exempted amount (BIK) in under the employment income section in taxsaya but it does not affect your tax as you are only taxed on your TOTAL TAXABLE SALARY. (TOTAL AFTER PART D)

I don't quite understand that part (as I am not from Finance/Tax background). Does this mean that I deduct the exempted amount from my salary when I key in my employment income into the system?

Also I don't understand the part "but it does not affect your tax as you are only taxed on your TOTAL TAXABLE SALARY." Isn't that BIK will reduce my total taxable salary?

[Trevor Keegan]

Hi,

Hi,

In budget 2009 there are tax relief for transportation allowance that is RM2,400 for going to work, and RM6,000 for business related transportation.

Where do I enter those in TaxSaya as relief?

TaxSaya is a very useful program and if it meets my requirement, I'll fire my tax consultant and register to paid version.

Thanks for your support and encouragement....I am certainly very happy to hear that you find the application useful.  I do hope that you will share our website with your friends.

Also I don't understand the part "but it does not affect your tax as you are only taxed on your TOTAL TAXABLE SALARY." Isn't that BIK will reduce my total taxable salary?

BIK means Benefit in Kind, which in effect increases your income (because you are you are being paid in kind).  Since the Travel Allowance BIK has been exempted, it means that for tax purposes it does not form part of your income.

If you enter in the information that appears on your EA form, then TAXSAYA will take care of the rest for you

Hope that this helps

Regards
Trevor Keegan

[chuck]

my wife gets a petrol card from her company. so does she claim 6000 or 2400 allowance?
its kind of difficult to draw the line because she uses the car to go to work and also for your work.
of course she wants to claim the 6000 allowance.
IRB says must keep receipts for this but what receipts and from who? Since its a petrol card.

[Trevor Keegan]

 
Exemptions for travel/petrol allowances are given as follows:

• RM2,400 for home/office travel
• RM6,000 for business travel

 
Whether you are able to claim for both the RM2,400 and RM6,000 travel allowance exemption depends on whether your company analyse the allowances in your Form EA.

• Where an analysis is provided - you can claim the RM2,400 (home/office) and RM6,000 (business travel) separately.
• Where an analysis is NOT provided - you can claim only RM6,000 (i.e. only for business travel)

For Business travel allowances in excess of RM6,000 (or where no analysis is provided in respect of travel allowances).  Any excess of travel allowances given by the company in excess of RM6,000 will be subject to tax

Eg. Business allowances given - RM7,000
Exempted = RM6,000
Taxable = RM1,000

If you are claiming business travel expenses against the RM1,000 taxable allowances
You will need to provide supporting documentation (travel logs/business mileage claims) for the whole amount of the RM7,000 (not only the taxable RM1,000)

Regards
Trevor Keegan