Below is an illustration showing
how Personal Assessment tax is computed.
Year of Assessment 2005/06
|
|
|
Husband |
Wife |
|
|
Net assessable value
– Property tax |
0 |
48,000 |
|
|
Net assessable income
before donations – Salaries tax |
360,000 |
0 |
|
|
Assessable profits
after donations – Profits tax |
0 |
90,000 |
|
|
|
--------- |
-------- |
|
|
|
360,000 |
138,000 |
|
Less: |
Mortgage interest –
for purchase of let-out property |
0 |
30,000 |
|
|
|
--------- |
-------- |
|
|
|
360,000 |
108,000 |
|
Less: |
Concessionary
deductions not yet allowed : |
|
|
|
|
Approved charitable
donations |
0 |
3,000 |
|
|
Mandatory
contributions to MPF |
12,000 |
0 |
|
|
Elderly residential
care expenses |
40,000 |
0 |
|
|
Home loan interest |
50,000 |
50,000 |
|
|
|
-------- |
-------- |
|
|
|
258,000 |
55,000 |
|
Less: |
Business losses
|
8,000 |
0 |
|
|
|
--------- |
-------- |
|
|
Total Income |
250,000 |
55,000 |
|
|
|
====== |
===== |
|
|
Joint Total Income
|
|
305.000 |
|
Less: |
Married person
allowances |
|
200,000 |
|
|
|
|
--------- |
|
|
Net chargeable income |
|
105,000 |
|
|
|
|
====== |
|
|
Tax thereon |
|
10,200
===== |
Check if Standard Rate (16%)
is applicable.
SR tax $305,000 * 16% = 48,800 > Graduated rates tax $10,200.
Therefore, SR is inapplicable.
The tax payable $10,200 is
apportioned between the spouses as follows.
Husband: $10,200 * 250,000 /
305,000 = $8,360.
Wife: $10,200 * 55,000 / 305,000 =
$1,840.
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