PR 2/2001 Computation of IA & AA in Respect of Plant & Machinery

- Paragraph 15, Schedule 3, Income Tax Act 1967
- Income Tax (Qualifying Plant Annual Allowances) Rules 2000 [P.U.(A) 52/2000]
- Re-categorised into 3 classes w.e.f Ya2000 (CYB)

1. Classification of Assets and the prescribed rates of IA & AA
a) Heavy machinery, motor vehicles - IA 20%, AA 20 %
b) Plant and machinery (air conditioners, medical & laboratory equipment) - IA 20%, AA 14 %
c) Others (Office equipment, furniture&fittings) - IA 20%, AA 10 %

unless special Rules or special rates apply

2. Assets with life span not exceeding 2 years: replacement basis
- Claim as replacement basis
- Allowed as deductible expenditure under section 33(1)(c)
- Amount recovered from the disposal of replacement assets be treated as income
- E.g. : Bedding & linen; crockery & glassware; cutlery & cooking utensils (other than stainless steel or silver); loose tools; accessories.

initial expenses (first time expenses) will be treated as capital expenditure, no deduction/CA is allow

Source: summarised from
http://www.hasil.gov.my/pdf/pdfam/PR2_2001.pdf