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2010 Income Tax Exemptions, Deduction, Rates, Reliefs and Rebates

19th January, 2011

in Individual Income Tax

Similar to previous years, this is the time where we have to prepare and submit individual income tax return form to IRB. For 2010 individual income tax, the last date to submit the individual income tax return form is on the 30th April 2011.

Any delay is subjected to penalty as below;

Any tax due and payable but has not been paid by the taxpayer by the due date shall be increased by 10% and any balance remaining unpaid upon the expiration of 60 days from the due date shall be further increased by 5% of the balance unpaid.

Read more to find out more information on free tax software, tax exemption, deduction, rates, reliefs and rebates for individual for year 2010.

If you are not sure what are tax exemption, rates, reliefs and rebates, you can read here.

Which form to fill in?

B 2010 – For individuals with Business, Employment and Other Income

BE 2010 – For individuals with Employment and Other Income.

M 2010 – Non-resident individuals. Business, Employment and Other Income.

Taxable Income

Taxpayer is required to pay tax on all kind of earnings, including incomes from,

  1. Business or profession
  2. Employment
  3. Dividends
  4. Interest
  5. Discounts
  6. Rent
  7. Royalties
  8. Premiums
  9. Pensions
  10. Annuities
  11. Others

Tax Deduction

The following items are eligible for tax deduction under donation and gift.

No Contribution
1 Gift of money to the Government, State Government or Local Authorities
2 Gift of money to Approved Institutions or Organisations
(Amount is limited to 7% of aggregate income)
3 Gift of money or cost of contribution in kind for any Approved Sports Activity or Sports Body
(Amount is limited to 7% of aggregate income)
4 Gift of money or cost of contribution in kind for any Approved Project of National Interest Approved by Ministry of Finance
(Amount is limited to 7% of aggregate income)
5 Gift of artifacts, manuscripts or paintings
6 Gift of money for provision of Library Facilities or to Libraries
7 Gift of money or contribution in kind for the provision of facilities in Public Places for the benefit of disabled persons.
8 Gift of money or medical equipment to any healthcare facility approved by the Ministry of Health.
9 Gift of paintings to the National Art Gallery or any State Art Gallery.

Tax Exemption

The followings are exempted from tax.

  1. Leave passage
  2. Medical and dental benefit
  3. Retirement gratuity
  4. Compensation for Loss of Employment
  5. Pensions
  6. Death gratuities
  7. Scholarships
  8. Income of an individual resident in Malaysia in respect of his appearances in cultural performances approved by the Minister
  9. Interest from money deposited in a licensed bank or a finance company, development financial institution, Lembaga Tabung Haji, Malaysia Building Society Berhad and Borneo Housing Finance Berhad
  10. Dividend from exempt accounts of companies, co-operative societies, unit trust approved by the Minister of Finance.
  11. Royalty from publication of artistic works/recording discs/tapes, translation of books/literary works and publication of literary works/original paintings/musical compositions.
  12. Income Remitted from Outside Malaysia
  13. Fees or Honorarium for Expert Services
  14. Income Derived from Research Findings

Refer to this page for details explanation.

Income Tax Rate

Chargeable Income Calculations (RM) Rate % Tax(RM)
0-2500 On the First 2,500 0 0
2,501-5,000 Next 2,500 1 25
5,001-10,000 On the First 5,000Next 5,000 3 25150
10,001-20,000 On the First 10,000Next 10,000 3 175300
20,001-35,000 On the First 20,000Next 15,000 7 4751,050
35,001-50,000 On the First 35,000Next 15,000 12 1,5251,800
50,001-70,000 On the First 50,000Next 20,000 19 3,3253,800
70,001-100,000 On the First 70,000Next 30,000 24 7,1257,200
100,001-150,000 On the First 100,000Next 50,000 26 14,32513,000
150,001-250,000 On the First 150,000Next 100,000 26 27,32526,000
Exceeding 250,000 On the First 250,000Next RM 26 53,325……….

Tax Relief

You are entitle for tax relief for the items in the table below.

No. Individual Relief Types Amount (RM)
1 Self and Dependent 9,000
2 Medical expenses for parents 5,000 (Limited)
3 Basic supporting equipment 5,000 (Limited)
4 Disabled Individual 6,000
5 Education Fees (Individual) 5,000 (Limited)
6 Medical expenses for serious diseases 5,000 (Limited)
7 Complete medical examination 5,00 (Limited)
8 Purchase of books, journals and magazines 1,000 (Limited)
9 Purchase of personal computer 3,000 (Limited)
10 Net saving in SSPN’s scheme 3,000 (Limited)
11 Purchase of sport equipment for sport activities 300 (Limited)
12 Subscription fees for broadband registered in the name of the individual 500 (Limited)
13 Interest expended to finance purchase of residential property. Relief of up to RM10,000 a year for three consecutive years from the first year the interest is paid.Subject to the following conditions:

(i) the taxpayer is a Malaysian citizen and a resident;

(ii) limited to one residential unit;

(iii) the sale and purchase agreement is signed between 10th March 2009

and 31st December 2010; and

(iv) the residential property is not rented out.

Where:

(a) 2 or more individuals are eligible to claim relief for the same property ; and

(b) total interest expended by those individuals exceeds the allowable amount for that year ,

Each individual is allowed an amount of relief for each year based on the following formula:

A x B / C

where;

A = total interest allowable in the relevant year;

B = total interest expended by the relevant individual in the relevant year;

C = total interest expended by all the individuals.

10,000 (Limited)
14 Husband/Wife/Alimony Payments 3,000 (Limited)
15 Disable Wife/Husband 3,500
16 Ordinary Child relief 1,000
17 Child age 18 years old and above, not married and receiving full-time tertiary education 1,000
18 Child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities 4,000
19 Disabled childAdditional exemption of RM4,000 disable child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities 5,000
20 Life insurance dan EPF 6,000 (Limited)
21 Premium on new annuity scheme or additional premium paid on existing annuity scheme commencing payment from 01/01/2010 (amount exceeding RM1,000 can be claimed together with life insurance premium) 1,000 (Limited)
22 Insurance premium for education or medical benefit 3,000 (Limited)

Tax Rebate

  • Income Tax Rebates For Resident Individual With Chargeable Income Less Than RM35,000 is RM400.00
  • Zakat/Fitrah but subjected to the maximum of tax charged.

If you need more information kindly proceed to LHDN webpage.

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