This proposal will be effective from the year of assessment 1999. However, interest income received by an individual from certain savings or fixed deposits in financial institutions is exempted from tax. As a measure to develop unit trusts and property unit trusts as a collective investment vehicle, it is proposed that interest income received by them be exempted from tax. This proposal will be effective from the year of assessment 1999 . 3 Present Position Loan instruments are liable to stamp duty at RM2.50 for every RM500 as determined under Item 27 of the First Schedule of the Stamp Act 1949.
Loan refinancing for the purpose of settlement of the original loan also requires a loan agreement.
This new agreement for refinancing attracts stamp duty. This proposal will be effective from 24 October 1998. It is observed that the tax treatment on the actuarial surplus based on accrual principle does not encourage shareholders to retain the surplus available for apportionment in the Life Fund. To encourage shareholders to retain their actuarial surplus in the Life Fund for the development of the life insurance industry, it is proposed that the income tax treatment on actuarial surplus apportioned to the Shareholders' Fund be changed from accrual principle to the surplus actually transferred.