Question

Identify and briefly explain any FOUR (4) expenses which are disallowable Section 39 of the Income Tax Act 1967.

Answer 1

Section 39 of Income tax Act 1967 provides that there will not be any deduction from the gross total income for the following type of expenses-

• Any expenses being a domestic or private expenses in nature.
• any amount in respect of any payment to any pension, provident, savings, widows and orphans or other similar fund or society which is not an approved scheme
• Any amount paid by way of rentals in respect of motor vehicle other than a motor vehicle licensed by the appropriate authority for commercial transportation of goods or passengers, in excess of fifty thousand ringgit: Provided that if the motor vehicle has not been used by any person for any purpose prior to the rental and the total cost of the motor vehicle does not exceed one hundred and fifty thousand ringgit, any sum paid by way of rental in excess of one hundred thousand ringgit: Provided further that the maximum amount of deduction in respect of the rentals of such motor vehicle in the year of assessment and subsequent years of assessment shall not in the aggregate exceed fifty thousand ringgit or one hundred thousand ringgit, as the case may be, in respect of that vehicle.
• Interest or royalty derived from Malaysia from which tax is deductible under section 109, if tax has not been deducted therefrom and paid to the Director General in accordance with subsection (1) of that section: Provided that this paragraph shall not apply if the payer has paid the amount referred to in subsection (2) of that section;