Tax relief or tax exemption in Malaysia is a system established by the Inland Revenue Board of Malaysia (LDHN) whereby taxpayers are allowed to deduct a certain amount of money from their income tax. Some types of assistance include life insurance, medical expenses for parents, individual education fees, the purchase of a laptop or smartphone. With tax relief, it allows you to reduce your taxable income which will affect the tax rate charged.
If you manage your taxes well, not only it can save you a huge amount of money but also help with your personal financial management. Whether you are new to work or need a refresh on this topic, this complete guide can teach you how to fill up e-Filing for 2023 and tax deduction, relief, and rebate that you can claim.
If you are currently employed, you will definitely receive a salary slip. You will need to pay tax if your monthly salary is about RM2,833.33 (or more than RM34,000 per year) after deduction from the Employees Provident Fund (EPF). Also, some companies may deduct tax from your salary.
If you are a freelancer who receives income from a Malaysian company or owns a business, you will also need to pay tax if your annual income amounts to RM34,000 a year.
The taxes you pay will be used by the government for national development such as building infrastructures, paying government officials, scholarships, facilities such as public recreation parks, educational institutions, health initiatives, security, defense, pensions, and including scientific and medical studies.
1. Charged with 10% penalty
If you do not pay taxes, you could be penalized 10% of your taxable income. Assuming you have exceeded a month of not paying your income tax, you can be charged another 5% penalty. This can potentially be a source of outstanding debt so it is best that you settle your tax payments as soon as possible. For the list of full offenses, refer to LHDN website.
2. Court action
If you still do not pay your taxes after a period of time, do note that court action can be taken. Your property and personal belongings can be confiscated by the government. You can also be jailed if the tax debt remains unresolved even after your property is confiscated.
3. Not allowed to leave the country
Travel restrictions can be imposed if you have overdue outstanding debts. This can happen even if you are a director of a Malaysian company who does not declare or pay income tax. This can impact both your business as well as the quality of your life.
The e-Filing form for the 2024 assessment year will be available from March 1, 2024. Therefore, please ensure that you already have a MyTax LHDN account to facilitate the e-Filing process.
Registration can be made online through the official portal edaftar.hasil.gov.my. For first time users, follow these easy steps below:
1. Complete your registration form online
To register for the first time, visit https://edaftar.hasil.gov.my/individu/dafsgjpnvdprd.php
After completion, you will be given an application number that looks like this, for example, Ai-a68792fu7979e32. Don’t forget to write down that number in case you would want to check the status of your application later on.
2. Upload the necessary documents needed
You will then be asked to upload a copy of the following document:
When uploading your identification card (NRIC), ensure that your name and number are visible and clear.
3. Check application status
After a few days, you can check your online application status at https://edaftar.hasil.gov.my/individu/info.php
If your application has been confirmed, you will be given a PIN number that will be used to fill up your e-Filing later on.
Disclaimer: e-Daftar application will be canceled if no complete documentation is received within the course of 14 days from the application date and the applicant will need to re-apply again with complete documentation.
These are the steps to fill up e-Filing online through the ezHASiL portal:
2. You will then be taken to the e-Form page. Make sure you select the correct e-Form either:
For working individuals without a business select the e-BE form.
Information in the form is divided into 4 parts namely:
3. Fill in all the information required to facilitate the process of calculating your total income tax. Finally, you need to confirm the assessment form and then send it to LHDN online.
If you are already satisfied with the completed form, click on ‘Sign & Submit’. Then, a Signature screen will be displayed. Enter your Identity Card Number and Password to submit the completed form.
(For resident individuals as updated on 7 December 2023)
There are several ways to pay your income tax, including through FPX, credit cards, debit cards, LHDNM payment center counters, banks, post offices, and money transfers from abroad. For more information.
Once you have filled and submitted the form for tax e-Filing, you will need to pay the amount listed as taxable income. Remember, you will be charged a 10% penalty in case of late payment and the next 5% would be charged if it is not paid after a month. If you want to avoid penalties and bad debt, it’s best to complete e-Filing and pay taxes as soon as possible. Be a responsible Malaysian so that your life, family, neighbors, and friends in this country can continue to remain peaceful and comfortable.
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An ex-banker, digital marketer, and masters graduate from University of Coventry. Mandy enjoys filling in the gaps of financial literacy by transforming ‘dry’ financial topics into ‘digestible’ articles. She did a lot of ballet growing up and is always on the hunt for the best deals online.