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



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 0 25
5,001-10,000 On the First 5,000   25
Next 5,000 3 150
10,001-20,000 On the First 10,000   175
Next 10,000 3 300
20,001-35,000 On the First 20,000   475
Next 15,000 7 1,050
35,001-50,000 On the First 35,000   1,525
Next 15,000 12 1,800
50,001-70,000 On the First 50,000   3,325
Next 20,000 19 3,800
70,001-100,000 On the First 70,000   7,125
Next 30,000 24 7,200
Exceeding 100,000 On the First 100,000   14,325
Next 50,000 26 ………

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.


  • SM 23rd February, 2011, 11:08 pm

    refers to tax relief table, 13 (iii). S&P signed between March – Dec 2010 means, date we go sign at developer office or date it was stamped?

  • JG 10th March, 2011, 6:07 pm

    Under Tax Relief, item 20, I believe RM6k is for Life Insurance/EPF whereas a RM1k is for deferred anunity. Can you define what that means?

  • jasmine 22nd April, 2011, 9:59 pm

    My husband had lost both his hearings (rt and left ears; left ear since birth and rt ear close to 19 yrs back but has to wear hearing aid, without which he couldn’t hear but not very clearly. He retired since 2007 and is no longer working ever since. In this instance, can he be categorised as “orang kurang upaya” and claimable for tax deduction in my submission of tax returns? What about the rebate of RM350 (his)? Please advise. Thank you very much.

  • 1-million-dollar-blog 22nd April, 2011, 10:20 pm

    SM,

    It should be the date S&P signing.

    jasmine,

    I believe you can claim under Tax Relief (Basic supporting equipment, item 3) which limited to RM5,000. You should be able to claim RM350 rebate as well.

    • SM 3rd November, 2011, 11:56 am

      but at the signatories page, there’s no date column.. so how to prove T____T

      for 2011, there’s no more relief like this isnt?

  • Min Yee 18th May, 2011, 9:10 pm

    Hi,

    I would like to ask an amount of RM1000 donated to Orphanage Foundation is to be deducted from salary at Sec13(1)(a) or is considered as a tax relief?

    Thank u in advance.

  • 1-million-dollar-blog 19th May, 2011, 3:13 am

    Min Yee, it should fall under tax deduction.

  • kim 29th May, 2011, 7:34 pm

    I have some servicing fees from overseas. How do I submit to tax department.

  • SS 10th June, 2011, 12:10 am

    Hi! The income tax rate table provided as above, is base on annual or monthly salary?

  • 1-million-dollar-blog 10th June, 2011, 1:11 am

    SS, it is for the total taxable income for the year

  • Micole Sia 23rd June, 2011, 1:26 am

    hi, when the wife died at childbirth in January 2010 after giving birth to a daughter, Evana, who was born with a defective heart and lived for only 15 days. then his wife had no total income in 2010. in this case, he can deduct for his wife and child with what sec?

  • dedy rintho 13th July, 2011, 10:56 am

    Hi there,

    Ii’m foreigner who work here in malaysia and my tax was paid by company and recently I got an information that I got tax rebate. My question is, should company pay it to me or company can take it as company who pay the tax. ??

    Thanks in advance for your respond.

    Regards,
    dedy

  • anne 25th October, 2011, 9:44 pm

    I’m Singaporean,just bought a house at JB.Intend to rent it.
    Do I need to pay any tax? What is the rate? Is there any relief for foreigner? Pls adv. Thanks.

  • valerie 3rd November, 2011, 11:32 pm

    hi, i’m malaysian. I have 4 children and their medical expenses worth RM1000. It’s that considered as tax relief for assessment year 2010?

  • 1-million-dollar-blog 4th November, 2011, 5:36 pm

    valerie, there is no tax relief for normal medical treatment for children.

    • valerie 9th November, 2011, 4:32 pm

      ok. Thank you :-)

  • aron 27th November, 2011, 12:20 am

    can i ask if the child age 22 is working part time and earn income but studying in university, would i entitle for child relief of 4000 for the year assessment 2010

  • 1-million-dollar-blog 27th November, 2011, 7:43 am

    aron, according to item 17 of tax relief in the table above, I think you are entitled but better confirm with IRB.

  • Amit 9th January, 2012, 3:59 pm

    Hi,

    I am from india, working here in malaysia since 29 june 2011. I am paying tax flat 26% since July 2011 to Dec 2012. I have taken Leaves and went back to India from “26th August 2011 to 04th Sep 2011″ And “26 Oct 2011 to 29th Oct 2011″. So I have completed 182 days in malaysia from 29 June to 31 Dec 2011.

    My Questations are : -
    1. “26% Taxes deducted from my salary for the initial six months:, Can I reimburse that extra money?. Because now am under residencial slab. If yes, can please tell me the procedure?

    2. Is there any tax rebate, as I have my family (Wife & 1yrs old child) here (On Dependent Visa)?

    Can please advice,, Thanks in advance.

  • 1-million-dollar-blog 9th January, 2012, 9:53 pm

    Amit, I’m not that familiar regarding tax for non-resident. However, I think the 182 days, you must be in Malaysia. If not you have to pay 26% flat.

  • Pang Ah Wooi 2nd February, 2012, 2:45 pm

    Hi, my income tax refund cheque for year 2010 was expired when I bank in to the bank, what shoul I do to get another cheque ? Or they will combine the amount during my year 2011 refund?

    • 1-million-dollar-blog 3rd February, 2012, 8:16 am

      Better ask for another cheque.

  • John 2nd March, 2012, 11:02 pm

    Hi,
    what are the exemptions under the column ” Basic supporting equipment “. Pls help to provide some examples.

    Thanks.

  • Foo 7th March, 2012, 12:58 pm

    Hi,

    I am working outside Malaysia. Y2011, totally I spent about 120 days in Malaysia only. Am I considered Tax Exempted from Malaysia? Thanks

  • 1-million-dollar-blog 11th March, 2012, 8:49 am

    Foo, you still have to pay Malaysian Tax

  • Glen 1st April, 2012, 4:48 pm

    Can i get a tax relief for a PC i bought in 2010 for my e-filling for year 2011?

  • 1-million-dollar-blog 2nd April, 2012, 8:15 am

    Glen, you can’t.

  • Tan 9th April, 2012, 11:12 pm

    Hi,

    My wife is working but her income is not taxable.
    We do the tax separately.
    For the type of assessment, i chose no. 4 “if the individual is married with a spouse who has no source of income or has income which is tax exempt”
    and e-filling automatically give RM3000 relief in the column of “Husband/Wife/Payment to alimony to former wife”

    am i correct.
    Thanks

    Tan
    am i correct?

  • tan 15th April, 2012, 6:45 pm

    Hi

    Can I use Takaful Family Plan and Medical insurance for my child as tax relief?

    Thank you.

    tan

  • ahsiang888 25th April, 2012, 8:08 am

    Is sport shoe claimable?

  • AR 27th April, 2012, 1:33 am

    Hi,

    In Malaysia last year I joined in the company and my employment pass start date is on 19th July 2011. and for the year 2011 it comes less than 182 days, do i fall in the resident or non resident cadre.

    If I fall in the non-resident cadre then do I get any relaxation or I need to pay flat 26% of the amount.

    Please any one help me.

    Thanks
    AR

  • NYC 8th May, 2012, 10:37 am

    Hi,

    On purchase of books, can one use bank credit card statement to show as proof of book purchase, if the actual receipts were lost? Thanks!

    Aaron

  • Akiko 12th June, 2012, 12:10 pm

    What does it mean by “Self and Dependent”? I live alone and depend on myself, am I includes?

  • Jenny 3rd August, 2012, 3:12 pm

    May i know decoration such as art paint or plotted plant for apartment deductible for Company’s tax or not? Under which tax act?

  • soh siaw chee 28th August, 2012, 1:30 pm

    how to do about expired check refund return from LHDN? tq

    • 1-million-dollar-blog 28th August, 2012, 2:26 pm

      Go to their office & ask for replacement.