Salaries tax computation problem (DPA or RCE?)

First we should look at the eligibility of deduction for both DPA and RCE.

Dependent Parent Allowance

Mr. A is eligible to claim dependent parent allowance if he maintains his parent, who at any time in the year of assessment, was:
ordinarily resident in Hong Kong; andwas aged 60 or more or, being under the age of 60, was eligible to claim an allowance under the Government's Disability Allowance Scheme; andhad either resided with Mr. A or his spouse, otherwise than for full valuable consideration, for a continuous period of not less than 6 months, or had received from Mr. A or his spouse not less than $12,000 in money towards her maintenance.So, all conditions above have been met for Mr. A to claim the DPA.

Elderly residential care expenses

The following conditions must be satisfied before the deduction is granted:
The parent is a parent of Mr. A or his spouse.The parent is aged 60 or above at any time in the year of assessment, or under 60 but entitled to claim an allowance under the Government's Disability Allowance Scheme.The parent was receiving residential care in a residential care home in the year of assessment.The expenses were paid to a residential care home or any person acting on its behalf. The expenses were paid by Mr. A or his spouse in the year of assessment (net of any reimbursement by any person or organization).The residential care home is situated in Hong Kong and is licensed or exempted from licensing under the Residential Care Homes (Elderly Persons) Ordinance, or is a nursing home registered under the Hospitals, Nursing Homes and Maternity Homes Registration Ordinance.So, all of the conditions above have been met.

In terms of choosing between DPA and RCE, the annual allowance of DPA is $30,000 while the RCE allowed for tax deduction for Mr. A is $18,000 ($6,000 X 3 months), therefore it is better for Mr. A to claim DPA instead of RCE for the year 2005/06.