Profits Tax and
Property Tax are chargeable on a person's income from business and let-out
premises respectively. In general, it is advisable for the low-income
earners of such incomes to elect for Personal Assessment because they can
benefit from the deductions or allowances that are not available under
Profits Tax and Property Tax.
Should you
elect for Personal Assessment?
Under Personal
Assessment, income from all employments, businesses or let-out premises are
aggregated, and from this total income the following are deducted:-
-
interest on money
borrowed for buying the let-out premises,
-
approved charitable
donations,
-
elderly residential
care expenses,
-
home loan interest,
-
mandatory
contributions to Mandatory Provident Fund,
-
contribution to a
recognized retirement scheme,
-
business loss,
-
loss brought
forward from last-year Personal Assessment, and
-
personal allowances
such as married personal allowances, child allowances, … etc.
Then, the tax payable
is computed at the sliding rates or standard rate under Salaries Tax on the reduced total income.
In other words, to compute the tax, just substitute the net assessable
income under Salaries Tax by the total reduced income (that is before
deduction of personal allowances) under Personal Assessment.
