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,
- Business or profession
- Employment
- Dividends
- Interest
- Discounts
- Rent
- Royalties
- Premiums
- Pensions
- Annuities
- 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.
May I know how does LHDN treat compensation received under a ‘Court Settlement for wrongly dismissal’?
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