CONFIDENTIAL 1 BA/JAN 2024/ FIN533

FACULTY OF BUSINESS AND MANAGEMENT

FINAL TEST

COURSE : PERSONAL FINANCIAL PLANNING

COURSE CODE : FIN533
FINAL TEST : JAN 2024
TIME : 2 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of five (5) questions. Answer ALL questions.

2. This question paper consists of an appendix on tax reliefs and tax schedule.

3. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This final test consists of 13 printed pages

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QUESTION 1

In the face of economic challenges and the escalating cost of living in Kuala Lumpur,
married couple like Afiq and Sheena, both working in the IT sector, need to strategize on
boosting their income to meet growing family expenses. Afiq, employed as an Information
Technology engineer, and Sheena, a data analyst, each receive a monthly net income of
RM8,578 and RM6,235 (after tax and EPF deductions) respectively, along with a combined
bonus of RM15,000 for the year 2023. Afiq and Sheena send their two young children, aged
4 and 3, to a playschool cum childcare centre, with a combined monthly fee of RM2,400 for
both children.

The followings were combined assets, liabilities, investments and expenses Afiq and Sheena
had incurred in 2023 (All figures are in Ringgit Malaysia RM).

Vertica Condominium monthly rental 2,890

Toyota Vios purchase price in 2019 95,000
Toyota Vios current value 65,000
Toyota Vios monthly instalment 1,232
Toyota Vios loan balance as at 31 December 2023 67,030
Household furniture and electrical appliances current value 10,500
Motorcycle Yamaha Yamaha XMax-250 current value 22,298
Motorcycle Yamaha Yamaha XMax-250 monthly instalment 427
Motorcycle Yamaha Yamaha XMax-250 2023 loan balance 20,514
Hand phones current value 6,000
Investments in Amanah Saham Bumiputera as at 31 Dec 2023 11,000
Employee Provident Fund as at 31 December 2023 245,300
Cash at bank as at 31 Dec 2023 5,000
Cash in hand as at 31 Dec 2023 3,500
Credit Card balance as at 31 Dec 2023 15,580
Credit card monthly payment 200
PTPTN loan balance – as at 31 December 2023, outstanding 12 years
PTPTN loan monthly payment 250
Groceries per month 1,500
Utility bills per month 350
ASTRO and Netflix per month 150
Parents’ allowances per month 400
Road tax and insurance for both car and motorcycle – annually 2,095
Transportation expenses per month 500
Coway rental per month 65
Vacation to Europe for the whole family in June 2023 28,000
Miscellaneous expenses per month 300
Children needs and expenses monthly 1,000

a) Using the above information, construct a balance sheet as at 31 December 2023 for Afiq
and Sheena combined.

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(10 marks)

b) Using the information provided, construct a cash flow statement for the financial year
ended 31 December 2023 for Afiq and Sheena combined.

(10 marks)

c) Compute and comment the following ratios:

i) Current ratio
ii) Liquid assets to take home pay ratio
iii) Debt ratio
iv) Debt service coverage ratio
(10
marks)

d) Analyse the financial situation for Afiq and Sheena in 2023:

i) Provide feedback on Afiq and Sheena's net worth statement and their current cash
flow situation.
ii) Offer advice on how a young couple like Afiq and Sheena with young children, can
adopt prudent spending habits, have some form of insurance protection, diversified
investments, home ownership and effectively prepare for their early retirement
planning.
(10 marks)

QUESTION 2

Danial is a teacher in a government school. He earned a total of RM67,456 of taxable

income in 2022. He paid RM148.55 of monthly tax deduction. Danial has a wife, an
OKU/PWD (person with disability) who is not working. They have two (2) children who are
both in primary school.

During the year 2022, Danial incurred the following: -

Dividends from Tabung Haji for year 2022 – RM372

Donation in the form of Waqaf, one-time only – RM100
Life insurance (Takaful) for himself and wife combined – RM400 monthly
SSPN net deposits – RM200 monthly
Covid-19 test kit (total spent) – RM100
Educational books for children (total spent) – RM200
Desktop ACER for personal use – RM1,979
Handphone Samsung for personal use – RM1,599
Gym membership (Danial) – RM75 monthly
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Internet subscription (Danial) – RM95 monthly

He has been saving RM200 monthly for 5 years to go to Umrah with TH Travel in 2023.
Spent RM268 per night for two (2 nights) at Artworks Hotel (approved by MOTAC) in Ipoh
for their short holiday.

a) Given the tax relief for resident individuals and marginal tax rate in the Appendix, assist
Danial to calculate his income tax payable for the year of assessment 2022.

(15 marks)

b) Buying electric vehicles (EVs) in Malaysia has become more affordable following the new
tax incentives that came into force at the start of 2022. As of January 1, 2022, EV
producers can benefit from a variety of tax exemptions, including on imports, excise, and
sales.

State in detail the tax incentives applied for individual owners of EV.

(5 marks)
QUESTION 3

On 1st Jan 2024, Encik Tarmizi discovered that his EPF accounts balances were
RM365,355 (Account 1) and RM156,580 (Account 2). He has many plans for the year 2024
to utilize his EPF accounts for both investments and withdrawals. His plans included:

 To invest in Public Mutual Berhad a sum of RM10,000 in February 2024 and in RHB
Islamic International Asset Management Berhad a sum of RM15,000 in July 2024.
(Encik Tarmizi is 45 years old on 7 January 2024 and his basic savings requirement is
RM125,000).

 Encik Tarmizi is planning to withdraw a sum of RM20,000 to finance the tuition fees of
his daughter who is currently pursuing her Law foundation studies at Multimedia
University.

 Encik Tarmizi is planning to withdraw a sum of RM10,000 to finance the tuition fees of
his nephew who is currently pursuing his architectural studies at Multimedia University
too.

 Encik Tarmizi is planning to pay for his wife’s knee surgery which is scheduled in
June 2024. The surgery will cost RM22,800.

 Encik Tarmizi also plans to make a withdrawal from his Account 2 to reduce his
housing loan balance.

Encik Tarmizi has approached you for advice. Assuming there are no further
contributions to both accounts:

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a) You need to compute the following in order to advise Encik Tarmizi.

i) The maximum amount that Encik Tarmizi can actually invest for both his
investments.

ii) Compute the balance amount that Encik Tarmizi has in his EPF account after the
intended investments.

iii) After taking into account all eligible withdrawals, determine the maximum
eligible withdrawal amount for Encik Tarmizi to reduce his housing loan
balance.

(10 marks)
b) Discuss briefly some misconceptions on retirement planning.
(5 marks)

QUESTION 4
The Faraid chart applies for questions below.

a) Encik Shahrul died, leaving behind an estate worth RM4,000,000. Nevertheless, he

had incurred a debt totalling RM585,000. He left behind his mother, wife, one (1) son
and two (2) daughters. Calculate the portion for each of the beneficiaries in Ringgit
Malaysia (to the nearest RM).
(5 marks)

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b) Puan Shazni passed away, leaving behind her father, husband, two (2) sons, and two
(2) siblings (one brother and one sister). Her estate amounted to RM2,000,000 with
no debt left behind. Determine the distribution amount for each beneficiary in Ringgit
Malaysia (rounded to the nearest RM).
(5 marks)

c) Discuss briefly two (2) differences between a conventional will and an Islamic will in
Malaysia.
(5 marks)

QUESTION 5

a) Define fintech and the reason fintech has gained popularity.

(5 marks)

b) Recently, the use of robo-advisors has been on the rise. Explain briefly what is a
robo-advisor and the reason robo-advisors are better off than human-advisors.

(5 marks)

END OF QUESTION PAPER

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APPENDIX

Year of Assessment 2022

No Individual Relief Types Amount (RM)

1 Individual and dependent relatives 9,000

Medical treatment, special needs and carer expenses for 8,000

2
parents (Medical condition certified by medical practitioner) (Restricted)

Purchase of basic supporting equipment for disabled self, 6,000

3
spouse, child or parent (Restricted)

4 Disabled individual 6,000

Education fees (Self):

i. Other than a degree at masters or doctorate level –

Course of study in law, accounting, islamic
financing, tehcnical, vocational, industrial, scientific
or technology 7,000
5
ii. Degree at masters or doctorate level – Any course (Restricted)
of study

iii. Course of study undertaken for the purpose of

upskilling or self-enhancement (Restricted to
RM2,000)

6 Medical expenses on: 8,000

(Restricted)
i. Serious diseases for self, spouse or child

ii. Fertility treatment for self or spouse

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iii. Vaccination for self, spouse and child (Restricted

to RM1,000)

Expenses (Restricted to RM1,000) on:

i. Complete medical examination for self, spouse or

child
7 ii. COVID-19 detection test including purchase of self-
detection test kit for self, spouse or child

iii. Mental health examination or consultation for self,

spouse or child

Lifestyle – Expenses for the use / benefit of self, spouse or

child in respect of:

i. Purchase or subscription of books / journals /

magazines / newspapers / other similar publications
(Not banned reading materials)

ii. Purchase of personal computer, smartphone or 2,500

8
tablet (Not for business use) (Restricted)

iii. Purchase of sports equipment for sports activity

defined under the Sports Development Act 1997
and payment of gym membership

iv. Payment of monthly bill for internet subscription

(Under own name)

9a Lifestyle – Additional relief for the use / benefit of self, 500 (Restricted)
spouse or child in respect of:

i. Purchase of sports equipment for any sports activity

as defined under the Sports Development Act 1997

ii. Payment of rental or entrance fee to any sports

facility

iii. Payment of registration fee for any sports

competition where the organizer is approved and
licensed by the Commissioner of Sports under the

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Sports Development Act 1997

Lifestyle – Purchase of personal computer, smartphone or

2,500
9b tablet for own use / benefit or for spouse or child and not
(Restricted)
for business use

Purchase of breastfeeding equipment for own use for a

1,000
10 child aged 2 years and below (Deduction allowed once in
(Restricted)
every TWO (2) years of assessment)

Child care fees to a registered child care centre / 3,000

11
kindergarten for a child aged 6 years and below (Restricted)

Net deposit in Skim Simpanan Pendidikan Nasional (Net

8,000
12 deposit is the total deposit in 2022 MINUS total withdrawal
(Restricted)
in 2022)

4,000
13 Husband / wife / payment of alimony to former wife
(Restricted)

14 Disabled husband / wife 5,000

15a Each unmarried child and under the age of 18 years old 2,000

Each unmarried child of 18 years and above who is

15b receiving full-time education ("A-Level", certificate, 2,000
matriculation or preparatory courses).

15b Each unmarried child of 18 years and above that: 8,000

i. receiving further education in Malaysia in respect of

an award of diploma or higher (excluding
matriculation/ preparatory courses).

ii. receiving further education outside Malaysia in

respect of an award of degree or its equivalent

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(including Master or Doctorate).

iii. the instruction and educational establishment shall

be approved by the relevant government authority.

Disabled child 6,000

Additional exemption of RM8,000 disable child age 18

15c years old and above, not married and pursuing diplomas or
above qualification in Malaysia @ bachelor degree or
8,000
above outside Malaysia in program and in Higher
Education Institute that is accredited by related
Government authorities

Life insurance and EPF

i. Pensionable public servant category who do not

contribute to EPF or any approved scheme

o Life insurance premium

OR 7,000
16
(Restricted)
ii. OTHER than 16(i) category

o Life insurance premium (Restricted to

RM3,000)

o Contribution to EPF / approved scheme

(Restricted to RM4,000)

3,000
17 Deferred Annuity and Private Retirement Scheme (PRS)
(Restricted)

3,000
18 Education and medical insurance
(Restricted)

19 Contribution to the Social Security Organization (SOCSO) 350 (Restricted)

20 Domestic tourism expenses on: 1,000

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i. Payment of accommodation at the premises

registered (Click here) with the Commissioner of
Tourism under the Tourism Industry Act 1992

ii. Payment of entrance fee to a tourist attraction

(Restricted)
iii. Purchase of domestic tour package through a
licensed travel agent registered with the
Commissioner of Tourism under the Tourism
Industry Act 1992

Payment of installation, rental, purchase including hire-

purchase of equipment or subscription for use of electric 2,500
21
vehicle charging facility for his own vehicle (Not for (Restricted)
business use)

Assessment Year 2022

Category Chargeable Income Calculations (RM) Rate % Tax(RM)

A 0 - 5,000 On the First 5,000 0 0

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On the First 5,000 0

B 5,001 - 20,000 Next 15,000 1 150

On the First 20,000 150

C 20,001 - 35,000 Next 15,000 3 450

On the First 35,000 600

D 35,001 - 50,000 Next 15,000 8 1,200

On the First 50,000 1,800

E 50,001 - 70,000 Next 20,000 13 2,600

On the First 70,000 4,400

F 70,001 - 100,000 Next 30,000 21 6,300

On the First 100,000 10,700

G 100,001 - 250,000 Next 150,000 24 36,000

On the First 250,000 46,700

H 250,001 - 400,000 Next 150,000 24.5 36,750

On the First 400,000 83,450

I 400,001 - 600,000 Next 200,000 25 50,000

On the First 600,000 133,450

J 600,001 - 1,000,000 Next 400,000 26 104,000

On the First 237,450

K 1,000,001 - 1,000,000 28 280,000
2,000,000 Next 1,000,000

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On the First 517,450

L Exceeding 2,000,000 2,000,000 30 ..........
Next ringgit

END OF APPENDIX

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