Gross Income From An Employment

Gross Income from an Employment
By Tan Thai Soon

The following shall be treated as gross income from an employment.

Section 25 (1)
Where gross income from an employment:-
(a) is not receivable in respect of any particular period; and
(b) first becomes receivable in the relevant period,
it shall when received be treated as gross income of the relevant person for the relevant period.

Comment
The assessability of employment income is on receipt basis, and "received" means legal entitlement of the income or is able to obtain the receipt on demand e.g. Salary. However, any bonus proposed in 2008 but not receive in the same year will not be assessed as gross income in that particular year.

Section 25(2)
Where gross income from an employment is receivable in respect of the whole of the relevant period it shall when received be treated as gross income of the relevant person for the relevant period.

Section 25(3)
Where gross income fails to be treated under subsection (1) and (2) as gross income for the relevant period, then if its receipt first becomes known to the DG on a day more than 5 years after the end of the relevant period, it shall be treated for the year of assessment which begin 5 years before the beginning og the year of assessment which includes that day.

Comment
This section serves as an anti avoidance provision to prevent loss of revenue, if the DG discovers the receipt of employment income is time barred.