Lecture Slides 5 Businness Income(1).pptx - WEEK 5 Business Income Learning Objectives Examine the income is a business income through the badges of

Lecture Slides 5 Businness Income(1).pptx - WEEK 5 Business...

This preview shows page 1 - 11 out of 31 pages.

WEEK 5: Business Income
Image of page 1

Subscribe to view the full document.

Examine the income is a business income through the badges of trade. Explain the taxability of business income from capital gains. Examine the eligibility of income in determining amount of tax to be paid. Learning Objectives SEGi University & Colleges. All rights reserved.
Image of page 2
Differentiate the various business income terms including the need for badges of trade Distinguish between capital income and revenue income Explain the commencement of business the importance Learning Outcomes SEGi University & Colleges. All rights reserved.
Image of page 3

Subscribe to view the full document.

Introduction
Image of page 4
Business income is chargeable under section 4(a). ‘Business’ includes profession, vocation and trade and every manufacture, adventure or concern in the nature of trade. Profession can be carried out by a company or an individual such as carrying on engineering, auditing, legal or medical practice. Vocation - the way of passing life. Example is placing bets systematically. ( Partridge v Mallandaine ) Manufacture: In Aditya Mills Ltd v Union of India means as the original material must undergo a transformation so that a new and different article or product emerges. Introduction SEGi University & Colleges. All rights reserved.
Image of page 5

Subscribe to view the full document.

It involves buying and selling; It consists of a series of transactions , having continuity and repetition; It includes isolated transaction i.e. one purchase and one sale or one purchase and many sales ; Whether a trade exists or not, one must examine the intention at the time of acquisition i.e. whether it was acquired with the intention to make profit, The intention of trade may change through time but such change must be documented. Trade : Characteristics SEGi University & Colleges. All rights reserved.
Image of page 6
Malaysian income tax imposes on transaction that give rise to ‘income’. An isolated transaction would be taxed as business income if it falls into either ‘trade’ or ‘adventure or concern in nature of trade.’ (ACNT) Adventure or Concern in Nature of Trade SEGi University & Colleges. All rights reserved.
Image of page 7

Subscribe to view the full document.

The following conditions is sufficient to establish the existence ACNT: The existence of an organization; Activities which lead to the maturing of the asset to be sold; The existence of special skill, opportunities in connection with the article dealt with; The fact that the nature of the asset itself should lend itself to commercial transactions. Adventure or Concern in Nature of Trade SEGi University & Colleges. All rights reserved.
Image of page 8
Over the years, the courts in Malaysia have laid down various guidelines or tests to distinguish gains arising from the disposal of an investment and gains from trade or ANCT. Badges of Trade SEGi University & Colleges. All rights reserved.
Image of page 9

Subscribe to view the full document.

Subject matter of the transactions : yield income of ownership or resale at a profit? If yes, the subject matter is normally considered trading rather than investment.
Image of page 10
Image of page 11
  • Fall '17

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes