Step 3 Further Info Request (or so call tax queries)

Refer to the Detail income statement from our example:-

For my practice, I will normally first do the tax computation, plug in the figure and item into the tax computation then analysis on the non appeal item.

I)  First try to put title for each of the item on Note to computation,
II) Leave the unclear point empty, or do highlight/ change the front colour into red so that u will not forget that is unprintable
III) starting from the top and follow sequence,

1) Entertainment - RM 1,000

[An entertainment expense that is wholly and exclusively incurred in the production of

gross income under subsection 33(1) of the ITA is not allowed a deduction of fifty

percent (50%) unless the entertainment expense falls within any of the specified

categories in proviso (i) to (viii) of paragraph 39(1)(l) ITA, then it qualifies for a

deduction of one hundred percent (100%).][Further detail pls refer to PR 3/2008]

if you do have the previous year tax computation, you will have approximate idea on what the expenses normally incurred, how was the company practice from previous, how your presentation should be.

if you have no idea on them, do refer to PR 3/2008, get your idea to know the tax treatment for entertainment expenses, what is the definition for entertainment (Sec 18 ITA).

then mark on your income statement whether your ITC have leave a space for your 1.Entertainment
then mark again for your Tax Queries. [ for me, sign "X" is non deductible eg. Depreciation, "/"have settle, "O" pending, " - " for Nil on current year.

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with the same detail income statement (From business income generate unit cases) you can see how the Note to ITC,
thus, I will only show u TQ here :-