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Consumer Mathematics: Taxation · Form 5

Consumer Mathematics: Taxation: Worked Examples (Medium)

This set combines two or three steps: work out chargeable income, apply a progressive rate table band by band, then deduct a rebate. It suits students ready to read a rate table.

General information only, not financial or tax advice.

Written by the spmmath.com.my editorial team.

Worked example 1

A tax rate table is given: on the first RM5,000 the rate is 0%; on the next RM15,000 (RM5,001–RM20,000) the rate is 1%; on the next RM15,000 (RM20,001–RM35,000) the rate is 3%. A taxpayer has a chargeable income of RM30,000.

Calculate the income tax charged.

  1. First RM5,000 at 0% = RM0 (band 1).
  2. Next RM15,000 at 1% = RM150 (band 2, covering up to RM20,000).
  3. Remaining = 30,000 − 20,000 = RM10,000 (income left in band 3).
  4. RM10,000 at 3% = RM300 (band 3).
  5. Tax charged = 0 + 150 + 300 = RM450 (add all bands).

Worked example 2

Puan Devi earns RM72,000 in a year and her total reliefs are RM26,000. The tax table states: tax on the first RM35,000 is RM600, and the rate on the next band (RM35,001–RM50,000) is 8%.

Calculate the income tax charged.

  1. Chargeable income = 72,000 − 26,000 = RM46,000 (income minus reliefs).
  2. Tax on the first RM35,000 = RM600 (from the table).
  3. Excess = 46,000 − 35,000 = RM11,000 (amount in the 8% band).
  4. RM11,000 at 8% = RM880 (apply the band rate).
  5. Tax charged = 600 + 880 = RM1,480 (add).

Worked example 3

Encik Faizal's chargeable income after reliefs is RM33,000. The tax table gives: tax on the first RM20,000 is RM150, and the rate on the next band (RM20,001–RM35,000) is 3%.

He qualifies for a rebate of RM400 because his chargeable income does not exceed RM35,000. Calculate his income tax payable.

  1. Tax on the first RM20,000 = RM150 (from the table).
  2. Excess = 33,000 − 20,000 = RM13,000 (amount in the 3% band).
  3. RM13,000 at 3% = RM390 (apply the band rate).
  4. Tax charged = 150 + 390 = RM540 (add).
  5. Tax payable = 540 − 400 = RM140 (deduct the rebate).

Worked example 4

A chargeable income is RM50000. Tax on the first RM35000 is RM600 and the balance is taxed at 8%.

Calculate the tax charged.

  1. Tax on first RM35000 = RM600
  2. Amount above RM35000 = 50000 − 35000 = RM15000
  3. Tax on that = 8% × 15000 = RM1200
  4. Total tax = 600 + 1200 = RM1800

Worked example 5

Encik Zaid's income is RM90000 and his reliefs total RM30000. Tax on the first RM50000 of chargeable income is RM1500 and the balance is taxed at 11%.

Calculate the tax charged.

  1. Chargeable income = 90000 − 30000 = RM60000
  2. Tax on first RM50000 = RM1500
  3. Amount above RM50000 = 60000 − 50000 = RM10000
  4. Tax on that = 11% × 10000 = RM1100
  5. Total tax = 1500 + 1100 = RM2600

Worked example 6

A chargeable income is RM31000. Tax on the first RM20000 is RM150 and the balance is taxed at 3%.

An individual rebate of RM400 applies. Calculate the tax payable.

  1. Tax on first RM20000 = RM150
  2. Amount above RM20000 = 31000 − 20000 = RM11000
  3. Tax on that = 3% × 11000 = RM330
  4. Tax charged = 150 + 330 = RM480
  5. Chargeable income ≤ RM35000, so subtract RM400 rebate: 480 − 400 = RM80

Worked example 7

Encik Amir earns RM65,000 a year and claims total tax reliefs of RM21,000. Using the tax table, tax on the first RM35,000 is RM600, and the rate on the next band (RM35,001–RM50,000) is 8%, calculate his income tax charged.

  1. Chargeable income = RM65,000 − RM21,000 = RM44,000
  2. Amount in the higher band = RM44,000 − RM35,000 = RM9,000
  3. Income tax charged = RM600 + 8% × RM9,000 = RM600 + RM720 = RM1,320

Worked example 8

Puan Mei's chargeable income for the year is RM24,000. Using the tax table, tax on the first RM20,000 is RM150, and the rate on the next band (RM20,001–RM35,000) is 3%, calculate her income tax charged.

Since her chargeable income does not exceed RM35,000, she also qualifies for a rebate of RM400. Calculate her income tax payable.

  1. Amount in the second band = RM24,000 − RM20,000 = RM4,000
  2. Income tax charged = RM150 + 3% × RM4,000 = RM150 + RM120 = RM270
  3. Rebate = RM400, which is more than the tax charged of RM270
  4. Income tax payable cannot be negative, so income tax payable = RM0

Source:DSKP KSSM Mathematics Form 4 and 5 (Versi English)

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Frequently asked questions

What extra elements appear in medium-level taxation questions?

Medium questions combine several reliefs and possibly a tax rebate in one problem, requiring you to work through chargeable income, apply the tax rate table across a band, and then subtract any rebate to reach the final tax payable. You need to keep each stage of the calculation organised and labelled.

What mistake happens when applying tax rebates?

Students sometimes apply the rebate before calculating the tax amount, or confuse a rebate (subtracted from tax payable) with a relief (subtracted from income before tax is calculated). Rebates and reliefs act at different stages, always apply reliefs first to find chargeable income, then compute tax, then subtract rebates.

How should the calculation be laid out for full marks?

Show chargeable income first, then the tax computed from the rate table (including any base amount for that band plus the percentage on the excess), then the rebate subtracted, ending with the final tax payable clearly stated. Each stage should be a separate, labelled line rather than one combined calculation.

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