Browsing: Income Tax

Malaysia IRB @ LHDN: Income Tax Relief for Assessment Year 2017@ 2018 Tax Filling

It is now towards the last quarter of 2017. In less than 2 months time, we will be leaving 2017 and welcoming 2018. Time flies. It is also time for us to have a look at our financial plan including to have a picture of our yearly income tax assessment. It is better for us to do earlier so that we have sufficient time to plan and act on what to spend and what not to spend.
For income tax assessment year 2017, there are some changes and additional items on tax relief compare to assessment year before. The changes and additional tax relief for assessment year 2017 as below:
1) Tax Relief for ‘Lifestyle’ Limited to RM2500 for:
  (i) Purchase of books journals, magazines, printed newspaper and other similar publications (except banned reading materials) for self, spouse or child;
 (ii) Purchase of a personal computer, smartphone or tablet for self, spouse or child;
(iii) Purchase of sports equipment for any sports activity as defined under the Sports Development Act 1997 (excluding motorized two-wheel bicycles) and gym memberships for self, spouse or child; and
(iv) Payment of monthly bill for internet subscription
2) Tax Relief for ‘Purchase of breastfeeding equipment’ Limited to RM1000
3) Tax Relief for ‘Child care fees to a Child Care Centre or a Kindergarten’ Limited to RM1000
For assessment year 2017, item (1)(iv) is a ‘come back’ from year 2010-2015. Item (2) and (3) are something new compare to assessment year before. For purchase of personal computer, previously was RM3000 and only once in every 3 years. 
The full list of Tax Relief for Resident Individual is available at IRB@LHDN website. For additional details, you might be interested to check out Malaysian Tax Booklet here.
Hope the above will guide you in your 2017 tax planning, especially on tax relief.

photo credit: wuestenigel Calculator , close up via photopin (license)

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IRB@LHDN – 2014 Overpaid Tax Refund

I submitted my 2014 IRB@LHDN tax return on 26 May 2015. By middle of July 2015, I have not received any emails or notification from IRB@LHDN with regards to my overpaid tax refund. So, in the middle of August, I filed a complaint to IRB@LHDN through their website, to enquire the status of my overpaid tax refund. Within the next working day, I received a reply from IRB@LHDN officer, informing that she had submitted my case to the local IRB@LHDN for further processing. And it will require 14 days before I can expect any reply from them.

One week later, I saw IRB@LHDN made the transfer to my bank account.

For those of you in same situation like me, I suggest you to file a complaint to IRB@LHDN through their website. Or, go to IRB@LHDN official website. Look for Feedback -> Customer Feedback Form -> Taxation Inquiry -> Tax Refund. You will need to fill in the form. So, make sure you have your tax return details with you.

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How To Check LHDN @ IRB Travel Blacklist

Yesterday, I read from The Star Online here and here that Lembaga Hasil Dalam Negeri (LHDN) @ Inland Revenue Board (IRB) is barring tax evaders from leaving the country at Immigration counter or airport auto-gate. It looks like now, the IRB has engaged the support from Immigration Department to enforce travel ‘blacklist’ for those who didn’t settle their tax accordingly. I can’t imagine the trouble of being stopped at immigration counter or auto-gate when we are ready to board the flight somewhere for a nice vacation which we had been waiting for so long. Can’t imagine had to tear off the boarding pass 🙁

So, if you suspect you are one of the the tax evaders, it’s better to check whether you’re in the LHDN @ IRB Travel Blacklist or not, before you proceed with your travel arrangement. You can check for LHDN @ IRB Travel blacklist here. Just key-in your 12 digits Malaysian Identity Card (IC) Number will do. From the reply, you will know whether you’re valid to travel or had been restricted to do so. If you’re restricted to do so, there’re possibilities that you’re blacklisted and you must contact Immigration Department for further information.
Paying taxes is part of our duties as Malaysian citizen. Just make sure you file your yearly tax accordingly, to avoid being blacklisted by LHDN @ IRB.

photo credit: Walt Jabsco via photopin cc

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How Long Can We Expect Tax Refund from Inland Revenue Board (IRB) @ Lembaga Hasil Dalam Negeri (LHDN)?

I read from The Star Online that Inland Revenue Board (IRB) @ Lembaga Hasil Dalam  Negeri (LHDN) stated that all tax refund are processes within 30 days from the e-filing submission.
I submitted my 2013 income tax through e-filing on 17 June 2014. I have tax paid in excess due to my monthly tax deduction through PCB (Potongan Cukai Bulanan). Yesterday (8 July 2014), I received the overpaid tax through direct transfer to my bank account. So, what do you think about the time frame of the tax refund? I would say IRB@LHDN had done a great job to keep their promise. Their efficiency had made many Malaysian smiles. Keep up the good work! 
photo credit: Tax Credits via photopin cc

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LHDN@IRB – Overpaid Tax Refund

I submitted my 2009 income tax in April 2010 through e-Filing. The process was very fast and convenient. For my 2009 tax return, I have an overpaid. My employer deduct the tax on monthly basis from my payroll. Well, not a big amount but it is my money and I want it to be returned to me.
I read from local news that LHDN@IRB will return the overpaid tax within a month from the date of submission especially for those who submitted through e-Filing. Towards June 2010, I have not received any news on my tax refund yet. So, I sent an email to LHDN@IRB to enquire on the status of my refund. Within 2 days, I received a reply mentioning that my tax refund request had been sent for processing at the local tax office, LHDN@IRB Kuching. Within 2 weeks from the date of my email, I received the cheque from LHDN@IRB.
Even though I didn’t not received the refund within one month from my income tax submission but I am quite satisfied with their prompt reply on my request. Quite an impressive improvement. Hope that for 2010 tax return, tax payers will receive their tax refund within one month time, as mentioned by LHDN@IRB.

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Malaysian Income Tax – e-Filing Step-By-Step

I submitted my 2008 income tax through e-Filing on last Monday, 20th April 2009. That’s 5 days delay from my 2009 financial goals. Anyway, I am glad I submitted my 2008 income tax before the due date.
If you are still working on your 2008 income tax, I suggest you use e-Filing. It’s fast and convenient. Before you start you e-Filing project, make sure you’ve the followings ready:
1) Your pin number for e-Filing. You can find the pin number on hardcopy of your income tax form. Or you can go to the nearest LHDN @ IRB office to get your e-Filing pin number;
2) Your EA form from your employers. If you have more than one employer for 2008, you’ll need to contact your employers to get all the EA forms;
3) Your 2008 insurance premium statement from your insurance company;
4) Other important official receipts which you will need for tax relief;
5) A calculator for your to help you with your calculations.
Then, go to LHDN@IRB website and look for e-Filing website. It will be a good idea if you can read through some of the details such as the first time log-in guide and e-Filing user guide. At least you have a rough idea on the e-Filing features. Once you’ve logged in, just fill in the details accordingly and remember to save all the details before move to the next page. 
Before you decided to click the ‘Submit’ button, make sure you double check all details. Once you submitted the your tax details, don’t forget to print the acknowledgement receipt and a copy of your income tax form for your records. Do keep together with the rest of tax related details such as your EA form, insurance premium statement and related official receipts. And most important, if your payable tax, don’t forget to pay your tax.
Enjoy your e-Filing submission and must submit latest by 30 April 2009.

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Malaysian Income Tax – The Advantages and Disadvantages Of E-Filing

I have been thinking about the advantages and disadvantages of e-Filing by Inland Land Revenue (IRB) or Lembaga Hasil Dalam Negeri (LHDN). The points as below:

Advantages of e-Filing:

1) Fast and Convenient

E-Filing is fast and convenient. There is no need to send income tax form to the IRB or LHDN office. You will save your fuel and precious time and parking fees. Also, you no need to worry it gets lost in the post and didn’t arrived at the IRB or LHDN office.

2) Environmental Friendly

Anything related to e-ways or electronic ways will save a lot of paperworks and plain papers as well. So, we are saving the planet by using e-filing.

3) Simpler and Easier

It’s much easier to use e-filing as you no need to refer to the explanatory notes. You just need to select the options from the drop down menu. All the additional details are also just a click away. This saves you a lot of time.

4) More Efficiency

This is for IRB @ LHDN. It’s much more efficient to process the form submitted through e-filing compare to the traditional hardcopy way. With this, e-filing is reducing a lot of headache of IRB @ LHDN personnel.

5) Faster Tax Refund

This is related to point number 4 above. When the IRB @ LHDN managed to process the form faster, you will get your tax refund faster as well. Of course this is only for those who has refund from their income tax.

Disadvantages of e-Filing:

1) Must be IT-Literate

One must be IT-Literate or at least with basic computer skills to file in their income tax through e-fling. For those with computer phobia, it’s rather hard to file their income tax form the e-ways. Or for those older generations, they really have no idea how to operate with the computer. And it’s hard for them to learn the computer skills. The solutions is to get a friend or family member to help to do the e-filing. Or can hire an income tax agent. But you will need to pay them for their services.

2) Access to Internet

Yes, you must have Internet access to access to the IRB @ LHDN e-filing website. If you don’t have Internet access at home, you can use the Internet access from work. Just make sure you don’t do it during office hours. Try to do in during lunch hour or after working hours. Or, you can go to cybercafe.

3) System Down

You will never have system down problem if you’re using hardcopy. For e-filing, sometimes, the systems do have problem. System could also be slow as too many people access to the system at one time. Just make sure you don’t file your e-filing during last minutes.

4) Forgot Your Password

It is easy to forget your password as nowadays there are so many pin numbers and passwords that we need to remember. If you’ve forgotten your password, just contact the IRB @ LHDN office for a new password. Or, the easiest and fastest is to visit the e-filing. Within minutes, you’ll get your passwords.This is from my own experience.

Overall, I see more advantages in e-filing. If you still have problem with e-filing, the last solution is to bring along all your details to IRB @ LHDN e-filing centre. But, make sure you go weeks before the due date (30 Apr). Usually, the IRB @ LHDN office is very very packed and busy during the last few days of April.

Any points I missed out? Do share with me.

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Malaysian Income Tax – My Visit To IRB @ LHDN Office

30th April is another 3 more weeks to go. I visited Inland Revenue Board (IRB) @ Lembaga Hasil Dalam Negeri (LHDN) office in Kuching this afternoon. I noticed a few things:

1) The staff are really helpful and friendly. Always with a smile on their face

2) Even during lunch hour, there are still enough staff at the counter, entertaining customers
3) IRB @ LHDN Kuching had set-up their e-Filing centre at Level 3, IRB Building. There are about 5 officers when I visited the place
4) The officers are assisting all kind of enquiries (generating of pin for e-Filing, requesting for new pin for e-Filing and other e-Filing issues)
5) Also, there are about 15 computers ready for submission of e-Filing. The public can just use these computers for e-Filing purpose
6) I noticed the officers are helping the tax payers to fill in the e-Filing
The officer even showed me how to log in, including the first few steps when log in for e-Filing. The officer told me, by next week, their e-Filing centre will be open till 8pm.

Overall, I am impressed with their working attitude. It’s great to see the effort by IRB @ LHDN to enhance and smoothen the process of income tax filing. At least the public will find it convenient to submit their income tax.

I hope IRB @ LHDN will do some ‘advertisement’ on local newspapers, radio, tv or Internet, to inform the public that they have such a good e-Filing service. Because I believe most of us will not know IRB @ LHDN is providing such a helpful and friendly service. If I didn’t visit IRB @ LHDN office today, I will not know it’s so convenient and easy to submit income tax at IRB @ LHDN office.

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Malaysian Income Tax – Do You Need To File Yours?

April will be a busy month for Malaysian tax payers. It is the month where Malaysian tax payers file their personal income tax to Inland Revenue Board (IRB) or Lembaga Hasil Dalam Negeri (LHDN). The due date is on 30th April. I believe there are still a lot of us who are unsure whether we need to file our income tax to IRB or not. Why I said so? Because I still have people around me asking whether they need to file their income tax or not. Also, I heard from local radio stations, there are still people who called in and asked what is the salary range to file the income tax. From Internet, there are also still questions on whether they are liable to file their income tax or not. And not forgetting, I am one of them who used to think that your salary must reach certain level before you need to file your income tax :p
I got the answer after I went to the local IRB office. The IRB officer said that ‘By right, we all must file our income tax despite of the income level’. No such thing such as you only file your income tax when your salary reach RM2500 per month. Also, I got more information from IRB website and The Malaysian Government’s Official Portal. The details below which extracted from The Malaysian Government’s Official Portal is clear enough to explain whether you need to file your income tax or not.

All individuals are liable to pay tax on income accrued in, derived from or remitted to Malaysia. Sources of income which can be taxed includes gains and profits from trade, profession and business, salaries, remunerations, gains and profits from an employment, dividends, interests or discounts, rents, royalties or premiums, pensions, annuities or other periodic payments and other gains or profits of an income nature not mentioned above.

Taxable income is arrived at after adjusting for expenses incurred wholly and exclusively in the production of the income. The rate of tax depends on the resident status of the individual which is determined by the duration of his stay in the country (as stipulated under Section 7 in the Income Tax Act 1967). A resident individual is taxed on his chargeable income at graduated rates from 2% to 30% after the deduction of tax relief.

However, an individual with chargeable income of less than RM2,500 is not taxed. The chargeable income of an individual resident is arrived at by deducting from his or her total income the personal relief. Tax liability of a resident individual is reduced by rebates. Income tax matters in Malaysia are under the jurisdiction of Inland Revenue Board of Malaysia.

Perhaps you are confused by the words “However, an individual with chargeable income of less than RM2,500 is not taxed”. The actual meaning of chargeable income or taxable income is your total annual income minus your personal relief and some other expenses approved by IRB. Let’s take a simple example, Ali, a new graduate who earned RM24000 for 2008. His taxable income is RM24000 – RM8000 (personal relief) – RM2640* (EPF @ RM24000 x 11%) = RM13360. The taxable income is RM13360. Of course this simple calculation is taking into considerations that Ali does not has other personal relief. If after minus of the deductible, the balance is less than RM2500, then he is not taxed. For more details on personal relief for Resident Individual (for year 2008), you can click here. Please refer to part D.
So if you are a Malaysian, staying in Malaysia and have income, you are liable to file your income tax.
*There might be slight differences. Please refer to your EA form for the actual EPF employee contribution.

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