Tuesday 14 September 2010

Income Tax (Special Treatment on Interest on Housing Loan)(Amendment) Regulations 2010 [P.U.(A) 288/2010]

The Order amends Regulation 5 of the Income Tax (Special Treatment on Interest on Housing Loan) Regulations 2009 [P.U.(A) 109/2009] and is retrospective from year of assessment 2009 and subsequent years of assessment.

A moratorium of housing loan interest approved by a bank or financial institution shall not constitute the gross income of that bank or financial institution. Previously, such treatment is applicable where the employment of the individual to whom the housing loan was granted has been terminated pursuant to a separation scheme or retrenchment on or after 1 July 2008 and the housing loan was granted prior to the termination of the employment.

The conditions are now relaxed by this Order to include the individual who is carrying on a business, the individual whose monthly income has been reduced due to a salary cut or in the case of joint loan, the employment of the individual’s spouse has been terminated on or after 1 July 2008, as well as the individual who is a guarantor under a housing loan where the employment of the guarantor is terminated pursuant to a separation scheme or retrenchment on or after 1 July 2008. For the individual who is carrying on a business, the housing loan was granted before 10 March 2009.

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