2012 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 2012, the last date to submit the individual income tax return form is on the 30th April 2013 for individual without business income. The date for individual with business income is on 30th June 2013.

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.

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

Which form to fill in?

Forms Applicable for
Resident B 2012 Business, Employment and Other Income
BT 2012 Business, Employment and Other Income (Knowledge Workers / Expert Workers)
BE 2012 Employment and Other Income
Non Resident M 2012 Business, Employment and Other Income
MT 2012 Business, Employment and Other Income (Knowledge Workers  Workers)

Kindly refer to this page for more information.

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 Gratuity paid out of public funds
5 Gratuity paid to a contract officer
6 Compensation for Loss of Employment
7 Pensions
8 Death gratuities
9 Scholarships
10 Income of an individual resident in Malaysia in respect of his    appearances in cultural performances approved by the Minister
11 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
12 Dividend from exempt accounts of companies, co-operative societies, unit    trust approved by the Minister of Finance.
13 Royalty from publication of artistic works/recording discs/tapes,    translation of books/literary works and publication of literary    works/original paintings/musical compositions.
14 Income Remitted from Outside Malaysia
15 Fees or Honorarium for Expert Services
16 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 5,000

Next 5,000

 

3

25

150

10,001-20,000 On the First 10,000

Next 10,000

3 175

300

20,001-35,000 On the First 20,000

Next 15,000

 

7

475

1,050

35,001-50,000 On the First 35,000

Next 15,000

 

12

1,525

1,800

50,001-70,000 On the First 50,000

Next 20,000

 

19

3,325

3,800

70,001-100,000 On the First 70,000

Next 30,000

 

24

7,125

7,200

Exceeding 100,000  On the First 100,000

Next RM

 

26

14,325

…..

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 Net saving in SSPN’s scheme (with effect from year assessment 2012 until year assessment 2017) 6,000 (Limited)
12 Purchase of sport equipment for sport activities 300 (Limited)
13 Subscription fees for broadband registered in the name of the individual 500 (Limited)
14 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)
15 Husband/Wife/Alimony Payments 3,000 (Limited)
16 Disable Wife/Husband 3,500
17 Ordinary Child relief 1,000
18 Each unmarried child of 18 years and above who is receiving full-time education (“A-Level”, certificate, matriculation or preparatory courses). 1,000
19 Each unmarried child of 18 years and above that:
(i) receiving further education in Malaysia in respect of an award of diploma or higher (excluding matriculation/preparatorycourses).
(ii) receiving further education outside Malaysia in respect of an award of degree or its equivalent (including Master or Doctorate).
(iii) the instruction and educational establishment shall be approved by the relevant government authority.
4,000
20 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
21 Life insurance dan EPF 6,000 (Limited)
22 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) – deleted from year assessment 2012 until year assessment 2021 1,000 (Limited)
23 Deferred Annuity and Private Retirement Scheme (PRS) – with effect from year assessment 2012 until year assessment 2021 3,000 (Limited)
24 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.


Leave a Comment

  • Kiwak 27th March, 2013, 6:08 pm

    Is it true if u declare ur income as biz income..ur tax bracket can be lowered down although if ur salary actually belongs to 26% taxable income?

    Reply
    • 1mdb.com 27th March, 2013, 8:41 pm

      If you are talking about individual income tax with sources of income from Business & Employment, they will fall under the same tax bracket.

      Reply
  • angie 30th March, 2013, 4:56 pm

    Dear Sir,
    Thanking you for such good infos. Im a new tax payer for this year June 2013. Im self-employed for online internet income about RM5k per month. What should i do to declare for my tax? Please guide me. Many thanks in advance.

    Reply
    • 1mdb.com 31st March, 2013, 10:19 am

      angie,

      Last week I manage to talk to IRB personal regarding internet income. IRB officer said that the income will be tax exempted if it derived from overseas & the server that you are using not in Malaysia.

      Reply
  • CS 4th April, 2013, 12:01 pm

    Hi,

    I would like to ask if i signed my S&P in year 2011 and started paying house loan in 2012 since it’s a second-hand house. Should I claim for the tax relief since it said interest paid for the 3 consecutive years? most of the comments just stated on year 2010 where this tax relief is first amended. Thanks for your advise..

    Reply
    • 1mdb.com 4th April, 2013, 12:26 pm

      Hi, if you signed S&P in 2011, you not entitle for tax relief.

      Reply
  • yvonne 24th April, 2013, 10:46 am

    Hi,
    I would like to ask if company pay a fixed travel allowance of RM900 monthly, is it right that its exempted up to RM6,000? How about the balance of RM4,800? Thanks for your advise.

    Reply
    • 1mdb.com 24th April, 2013, 12:44 pm

      Hi, where do you RM6,000 exemption from? I think travel allowance is not taxable.

      Reply
  • Alan 27th April, 2013, 5:58 pm

    Hi,

    I would like to understand further on tax deduction on Life insurance and EPF, should I just calculate
    how much of epf deducted from may salary last year or otherwise. Kindly advise.

    Reply
  • gloria 10th May, 2013, 12:49 pm

    hi good morning i wanna ask regarding 5percent deduction for a tax year 2015..in malaysia
    i want to know any information regarding that,,,,,,pls
    thank u i wanna see the list as well,,,,,,,

    Reply
  • CH 13th May, 2013, 10:14 pm

    Hi Good Evening,
    May I ask if the Transport Allowance and the Parking Allowance are tax exempted? As my employer stated as part of income in EA form, how can I proceed with the tax exemption for these two during the tax declaration? Also, what is the limit for Parking Allowance per annum?
    Regards,
    CH

    Reply
    • 1mdb.com 13th May, 2013, 10:31 pm

      Hi, I think allowances are not taxable.

      Reply
  • Lim 17th May, 2013, 9:53 am

    I would like to know whether treadmill consider sport equipment and qualified for tax relief of maximum RM 300?

    Reply
  • ckm 18th June, 2013, 5:18 pm

    Hi,

    If a divorced husband has remarried again and still paying alimony fee to the ex-wife, further the present wife is filing the Form B separately. Whether he is entitle to relief of RM3,000.00 in his tax?

    Thank you.

    Reply
  • TS 30th June, 2013, 6:53 pm

    I want to use my PBB Flexi-house loan Statement of Account to support my claims for tax deductible (rental income) on interest paid. But the loan statement reflects the monthly instalment interest paid as $0. Hence I could not report any interest paid for income tax purpose.
    1. Is there any bank in Malaysia that reflects the interest paid on each monthly instalment without deduct interest earned from money in my current account?
    2. Without a loan statement that reflects the interest paid, is there any other way we can claim for tax deductible?
    3. Is there any organisation or authority can I approach for help?

    Appreciate any advice you can give.

    Reply
    • 1mdb.com 2nd July, 2013, 10:43 pm

      I guess you better ask PBB regarding this matter. They should be able to provide this information.

      Reply
  • chan 24th February, 2014, 5:25 pm

    Hi,

    If one gets paid RM0.80/km for mileage. Will it be taxable income?

    Reply
  • irene 13th October, 2015, 10:00 am

    Hi there,

    My scenario :
    – Working in Malaysia for a US company
    – Salary remitted monthly into my local account directly from US in RM.

    Question :
    – Do i need to declare local tax?
    my company say it’s my responsibilty to find out about the local law pertaingn to income tax for obviuos reason, they dont want to get involved with the hassle as they are based in US.they will just pay me one lumpsum , including EPF employer portion as well. Whether i want to put into EPF is my choice. I am working in a regional office based in KL.

    irene

    Reply