March and April is tax filing season in Malaysia. The tax year runs from 1 January to 31 December. Anyone earning above RM34,000 before EPF deductions for this period needs to submit a tax return to LHDN.
The deadline for tax returns for salaried individuals (those who don’t run a business) is 31st March. Payment of any outstanding taxes must be made at the same time.
Penalty Provisions
Hefty fines and imprisonment can be levied against those who fail to file their taxes and make due payments correctly. Fines can range from RM200 to RM20,000. And imprisonment terms may not exceed six months. A penalty can consist of either or both.
If no prosecution action is taken, LHDN can penalise taxpayers up to three times the outstanding tax amount. Late filing penalties are imposed before any set-off, repayment or rebates. The following penalty schedule is used for late submission.
Late payment of taxes due incurs a penalty of 10% up to 60 days and an additional 5% after 60 days.
Registering an Account with LHDN
Fortunately, both submission and payments can now be made entirely online. If this is your first time submitting a tax return, you will need to register an account with LHDN. You can do this online at www.hasil.gov.my.
1. Select MyTax from the menu.
2. Then select option e-Daftar from Favourite Services.
3. Then select Daftar Individu.
4. And then complete the online application form and submit a copy of your IC (front and back).
5. Make a note of the application number you are provided with (in case you have to follow up with LHDN).
E-filing First Time Login – PIN Application
When logging in for the first time to e-filing you will see you require a PIN number.
You can obtain a PIN from any LHDN office or apply online at https:/maklumbalaspelanggan.hasil.gov.my/MakLumBalas/en-us/ and selecting Application.
Then select e-Filing PIN Number Application and complete the CP55D form.
You can either print and complete the form and make a copy of it. Or complete it on your device and e-sign it. Then click “Next” to be taken to the form below, where you can upload it.
You will receive your PIN number via email from LHDN. Thereafter you can login into e-filing and complete your return.
Completing Your Income Tax Return Form (ITRF)
You will need to select the correct Income Tax Return Form (ITRF). Here are the different categories of ITRFs:
And you will need to select the year of assessment. This will be 2020 (your declaration relates to the prior year).
1. Individual Particulars
In this first section, you must check that your personal details are correct. LHDN will use the phone number and bank details that display here for you. In particular, also check these details;
Type of Assessment – are you filing as a single person, a married person together with your spouse or a married person filing separately from your spouse?
Incentive under section 127 refers to the Income Tax Act 1976. Only those claiming incentives as per government gazette or with a minister’s approval letter must concern themselves with this.
Only complete the Disposal of asset under the Real Property Gains Tax Act 1976 if you’ve sold property in 2020.
2. Statutory Income
In this section, detail all income you earned in the separate spaces according to the sources (salary, rent, etc.).
You must include any non-salary related benefits that can count as “income from employment” and may need to be added on to your income figure. These include perquisites like transport allowances, club memberships or personal staff paid for by your employer. And any BIKs (benefits-in-kind) like accommodation and company cars.
To complete this section, key in the total monthly tax deductions (MTD) deducted by your employer. This amount will be on your EA form.
If your employer uses JustLogin payroll software, you can download your EA form via your mobile device by logging into the app and selecting “File Generation” from the menu on the side bar. Then select the Tax Forms tab and choose Form EA and year 2020. Once you’re done use the blue “Go” button to generate your form and choose where to save it.
3. Tax Reliefs and Rebates
Here you get to reduce your taxable income by any expenses that are entitled to tax exemptions. Tax deductions include eligible charitable donations and membership subscriptions of professional bodies. Below is a comprehensive list of reliefs and rebates.
4. Summary
The summary section tells you what tax is payable. If it is negative, you are owed a refund by LHDN. If you are comfortable you have completed your ITRF correctly, select “continue”. Otherwise, go back and correct your errors.
Request a TAC (it will be sent to the phone number under your personal details) and key it in to submit your return. You have now completed your tax return. But don’t forget to make payment of tax you may owe (the ways you can do this are available on the LHDN website).
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