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28 FEB 2024
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FAQ Guide to Malaysia Personal Income Tax 2024

As income tax submission season rolls around, we want to demystify and make all your tax dealings as hassle-free as possible. Use this guide to get answers to frequently asked questions or speak to any of our tax consultants for more in depth support.

Overview of Personal Income Tax in Malaysia

What is personal income tax in Malaysia?

Personal income tax in Malaysia is governed by the Inland Revenue Board of Malaysia, also known as LHDN. The tax system in Malaysia is progressive, meaning that individuals with higher incomes are subject to higher tax rates. The income tax rates for resident individuals are structured into tax brackets.

A person is considered a Malaysia tax resident if he / she stays for 182 days in Malaysia in a calendar year. 

What is the tax rate for personal income tax in Malaysia? 

With effect from YA 2020, income tax rates are applied on a graduated scale starting from 0% on the first RM5,000 to a maximum of 30% on income exceeding RM2 million. Non-resident individuals are imposed with a flat rate of 30%, whilst other rates are applicable to special classes of incomes and designations.

Read more: Malaysia Personal Income Tax Rates 2024

The amount of tax payable for the year of assessment 2023 can be calculated by considering your chargeable income.

Get a quick forecast: Free Personal Income Tax Calculator

What is the minimum income to pay income tax in Malaysia for individuals?

Individuals who earn a minimum of RM34,000 annually (after EPF deduction) from all sources of income, including but not limited to salary, must register for a tax file.

As of 2022, all resident individuals aged 18 and above with employment are required to register for a tax identification number (TIN) and subsequently, file income tax.

Personal Income Tax Calculation and Submission

How do I calculate my chargeable income or taxable Income?

Calculating your chargeable income or taxable income involves several steps. Here’s a simplified overview of the process:

  1. Determine your total income such as employment, business, rental and other forms of earnings
  2. Identify and subtract any income that is exempted from taxes, such as certain allowances and benefits. 
  3. Deduct any tax reliefs that you qualify for. Common deductions include EPF contributions, life insurance premiums, and certain lifestyle expenses. 
  4. Next, apply the tax rates applicable to calculate your income tax payable. Keep in mind that the tax rates vary depending on your income bracket. 
  5. Finally, take into account any tax rebates to help reduce your final tax payable amount.   

Simply put, in a formula:

Chargeable / Taxable Income = Total Income − Exempt Income − Deductions and Tax Reliefs

Once you have your taxable income, you can use the tax rates to calculate the income tax payable.

Personal income tax calculators are a great tool to help you with this process. Find out how much tax you’ll pay quickly and easily: Malaysia Personal Income Tax Calculator

When is the deadline for filing my personal income tax?

It depends whether you’re filing as a salaried employee, business owner, as a resident / non-resident and a number of other categories. 

For many of you, you should submit your tax returns via Form BE (residents who do not carry on business) by 30th of April 2024, with a grace period of 15 days for e-Filing by 15th of May 2024.

Tax Form TypeDescriptionDeadline
Form BEIncome tax return for individual who only received employment income30th April 2024

15th May 2024 for e-Filing
Form BIncome tax return for individual with business income (income other than employment income)30th June 2024

15th July 2024 for e-Filing

How do I get my income tax number? 

If you were previously employed, you may already have a Tax Identification Number (TIN).

You can check by calling LHDN – do have your IC or passport number on hand.

  • 03-8911 1000 (Local number)
  • 03-8911 1100 (Overseas number)

Alternatively, you can visit the official tax portal (MyTax) to register and get both your income tax number (TIN) and registered LHDN branch.

What types of income is taxable in Malaysia? 

Listed below are the different types of income that are taxable in Malaysia:

  1. Employment – Employees receiving a salary from their company. 
  2. Business – Applicable to all types of companies and existing professions which receive money into a bank account, including those pursuing digital lifestyle professions such as social media influencers and freelancers.
  3. Rent – Profit gained by renting out a house, a vehicle, land or even goods 
  4. Royalties – Payments received by an individual or company for the ongoing use of their creative assets such as songs and publications
  5. Interests & Dividends – Earnings from dividends. However, dividends from ASB, Unit Amanah, Tabung Haji and interest on loans from an employer are exempt. 
  6. Discounts – Referred to as income you didn’t receive in the form of cash but as a benefit-in-kind
  7. Premiums – Applicable to rewards and gifts e.g. vouchers, vacations, cash (excluding bonuses) telephones, laptops, or even houses
  8. Pensions – Received by retired government servants. 
  9. Annuities – Recurring payments paid by the company to employees for a specific period
  10. Perquisites – Employer-offered benefits such as company credit cards, bill claims, sponsored club memberships, loans, personal driver, and childcare fees. 
  11. Alimony received for previous marriage 
  12. Gains and profits not covered under Section 4(a) to 4(e) of the Income Tax Act –  These incomes typically generally include payments made to a non-resident in respect to commissions, guarantee fees and introducer’s fees.

What types of personal income tax reliefs can I claim in 2024?

When it comes to tax reliefs in Malaysia, personal reliefs and deductions can be helpful for reducing your taxable income. This, in turn, can lower your taxes and help you save a considerable amount on taxes with proper planning.

Read more: Malaysia Personal Income Tax Reliefs 2024 

What are the income tax rebates available for 2024? 

In addition to tax reliefs, there are a number of tax rebates available for Malaysian resident individual taxpayers. 

Learn about YA 2023 rebates and how to calculate them correctly for further reduction on your final tax amount: Reduce Your Income Tax Further with Tax Rebates

What income is not taxable in Malaysia? 

Some common types of income that are typically exempt from taxation are: 

  • Grants and scholarships for education purposes
  • EPF withdrawals
  • Amount received as death gratuity
  • Gratuity from working with a company for more than 10 years and reaching retirement age
  • Compensation for lost of employment (CLE, VSS/MSS) due to redundancy or company restructuring

Learn all: Income Types Exempt from Tax

Do I need to file income tax if I’m unemployed? 

Yes! Even if you haven’t earned the taxable amount for the year of assessment, you’re required to file your taxes each year once you’ve registered for your tax file.

Personal Income Tax Payment and Late Payment Penalty

How do I pay my personal income tax in Malaysia? 

If you have paid additional income tax through monthly tax deductions (MTD), the excess amount is reimbursed into your bank account.

On the other hand, tax dues can be paid through a wide range of methods such as online banking, credit / debit card, collection agents and ATMs. 

Read more: All Payment Methods You Can Use for Personal Income Tax in Malaysia

Can I make income tax payments by installments? 

Yes, you do have the option to apply for making your tax payments by installments if you find that you’re unable to pay the full amount of your income tax by the given deadline. 

To do so, you must file a letter of appeal before 30th April to the Collection Unit of your LHDN branch (where your income tax file is physically kept and maintained). 

What are the income tax payment codes? 

You’re required to provide your income tax payment code when making payment at Commercial Banks and Post Office which have been appointed as LHDN’s collection agents. Below are the codes for tax installment payments: 

Payment CodeDescription
084Tax Installment Payment/Tax Balance – Individual
086Tax Installment Payment – Company

See here: Full List of Tax Payment Codes

What’s the penalty for late income tax payment? 

If you’re unable to pay your income tax by 30th April, you’ll be charged with a 10% penalty on the unpaid tax balance (with effect from YA 2021).

How do I appeal for a penalty incurred from late income tax payment? 

If you disagree with any late payment penalty imposed on you, you can file an appeal in writing against it. The appeal needs to be filed to the relevant branch within 30 days from the issuance date of the penalty (Notice of Increased Assessment). 

Do note that even with an appeal, you’re still obliged to pay the payment. If your appeal is successful, LHDN will refund the penalty amount back to you. 

Got Other Questions? 

Bispoint Group offers comprehensive financial and tax services for individuals and SME companies alike, including tax planning, tax filing and tax compliance. 

Our team of highly skilled professionals can swiftly and expertly implement solutions to meet your business needs. Currently, we have over 70 dedicated teams, including Chartered Accountants, managers, supervisors, and junior associates in our offices serving over 1,000 private companies. 

Speak to us to get the best advice and assistance for any of your financial needs. 

TAGS :FAQincome tax