Individual Tax Filing – Type of Assessment

SEPARATE ASSESSMENT VS JOINT ASSESSMENT
Income Tax Act 1967 Section 45 (2A)
the wife may elect in writing (wife who elects) that her total income shall be aggregated with the total income of her husband and assessed in his name for that year of assessment

Income Tax Act 1967 Section 45 (2B)
the husband may elect in writing (husband who elects) that his total income shall be aggregated with the total income of his wife and assessed in her name for that year of assessment

Type Of Assessment
SEPARATE ASSESSMENT

• Husband & Wife will complete their own tax assessment
• Husband & Wife each entitled to claim their own personnel tax relief
• Disallow to claim spouse relief RM4,000 & disabled spouse relief RM5,000
• Either husband or wife eligible to claim for child relief, but not for both

JOINT ASSESSMENT

• Can elect under name of husband (total income of wife to be aggregated with her husband) or under wife (total income of husband to be aggregated with his wife)
• Personnel tax relief only allow to claim once
• The election shall be made in writing before 1 April in the following year of assessment

Conditions on Eligibility to Elect for Joint Assessment

• Husband and wife were living together in the basis year for a year of assessment & did not in that basis year cease to live together
• Has total income to be aggregated with the total income of the spouse
• The husband / wife must be a Malaysian citizen, if not resident in Malaysia
• The aggregation of total income can be made with one wife only.

SCENARIO Which Is IDEAL For Separate Assessment

• Both husband and wife are earning high income, each individual can enjoy personal tax relief and deduction available.
• Husband/wife with business income while spouse is under employment. Separate assessment can lower the total chargeable income to reduce tax burden

SCENARIO Which Is IDEAL For Joint Assessment

• Individual whose spouse earns a low income or is not taxable. Less impact in tax computation.
• Individual whose spouse has no income during year of assessment. Eligible for spouse relief.
• Husband / wife with business income but incur business losses while spouse is under employment. Elect assessment under working spouse can maximize business losses deduction while to enjoy tax relief available