2014 Income Tax Exemptions, Deduction, Rates, Reliefs and Rebates



Please be remind that, the last date to submit the 2014 individual income tax return form is on the 30th April 2015 for individual without business income. The date for individual with business income is on 30th June 2015.

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.

To complete tax return form, you may need to have information on tax exemption, rates, reliefs and rebates. if you are not sure what are tax exemption, rates, reliefs and rebates, you can read here.

The easiest way to submit tax return form is via e-Filing. You may see the guides on e-Filing at How to do e-Filing for Individual Income Tax Return. e-Filing system for 2014 tax return form up since 1st March 2015.

Which form to fill in?

Forms Applicable for
Resident B 2014 Business, Employment and Other Income
BT 2014 Business, Employment and Other Income (Knowledge Workers / Expert Workers)
BE 2014 Employment and Other Income
Non Resident M 2014 Business, Employment and Other Income
MT 2014 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.

No Item
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 0 0
5,001 – 10,000 On the First 5,000 0
Next 5,000 2 100
10,001 – 20,000 On the First 10,000 100
Next 10,000 2 200
20,001 – 35,000 On the First 20,000 300
Next 15,000 6 900
35,001 – 50,000 On the First 35,000 1,200
Next 15,000 11 1,650
50,001 – 70,000 On the First 50,000 2,850
Next 20,000 19 3,800
70,001 – 100,000 On the First 70,000 6,650
Next 30,000 24 7,200
Exceeding 100,000 On the First 100,000 13,850
Next RM 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 DependentSpecial relief of RM2,000 will be given to tax payers earning on income of up to RM8,000 per month (aggregate income of up to RM96,000 annually). This relief is applicable for Year Assessment 2013 only. 9,000
2 Medical expenses for parents 5,000 (Limited)
3 Basic supporting equipment i) 5,000 (Limited) – year of assessment 2014 and beforeii) 6,000 (Limited) – with effect from year of assessment 2015
4 Disabled Individual 6,000
5 Education Fees (Individual) 5,000 (Limited)
6 Medical expenses for serious diseases i) 5,000 (Limited) – year of assessment 2014 and beforeii) 6,000 (Limited) – with effect from year of assessment 2015
7 Complete medical examination 500 (Limited)
8 Purchase of books, journals, magazines and publications 1,000 (Limited)
9 Purchase of personal computer (once in every 3 years) 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 (with effect from year of assessment 2010 – 2012) 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 2009and 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. 4,0006000(with effect from year of assessment 2013)
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 authoritiesWith effect from year of assessment 2013 additional exemption is RM6,000 i) 5,000 – year of assessment 2014 and beforeii) 6,000 – with effect from year of assessment 2015
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

  • Srinam 26th April, 2015, 10:30 pm

    May I know how does LHDN treat compensation received under a ‘Court Settlement for wrongly dismissal’?

    Reply
  • irene 13th October, 2015, 10:17 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 pay local income tax?
    my company say it’s my responsibility to find out about the local law pertaining to income tax for obvious reason, they dont want to get involved with the hassle as they are based in US.they will just pay me one lump sum , 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