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How to Declare Income Tax (YA 2023). Avoid LHDN's 300% Tax Penalty

BY Nisya Aziz

Updated 15 Mar 2024




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To those who just started ‘adulting’, if you’re earning an annual employment income of RM34,000 or RM2,833.33 per month (both after EPF deductions), you MUST declare your income and file your tax. Heads up - The process is a mafan, but you can rest assured that it will prevent unnecessary issues in the future.

What's covered in this article?



Have to meh? What happens if I don’t declare income tax?

Short answer - bad things will happen. Long answer - If caught by the LHDN’s auditor, you may face a penalty of 80% to 300% of the taxable amount. That's a lot of money, people.

For example, if your total taxable amount is just RM500, now you have to pay RM1,500 because of the 300% penalty. 



On top of that, there’ll be fines of RM1,000 to RM20,000 (if the case is severe) or imprisonment, or even worse - BOTH.

This is based on the Income Tax Act of 1967

“Failure (without reasonable excuse) to furnish an Income Tax Return Form”.


You could have spent that money and your freedom elsewhere, such as on a vacation or investment.
 

Okay la, so how do I declare my income?


1. First timer? Register yourself as a taxpayer




So, if you've never tackled filing your taxes online in Malaysia before, don't sweat it. Here's what you do: head over to mytax.hasil.gov.my and hit up the "e-Daftar" button. They'll walk you through filling out a form online and ask you to upload some verification docs. Once you're done, you'll need to print out the form and swing by your nearest LHDN branch (Don't forget to bring your IC). They'll sort you out with a first-time login PIN. 
 

2. Login to MyTax

Alright, now that you've got your PIN, it's time to dive into MyTax. Head over to the website and hit up the "First Time Login" option. They'll prompt you to whip up a new password for your online account. Once that's done, you're all set to log into LHDN's income tax e-filing page whenever you need to.
 

3. Start E-filing




Then, head to the top-left corner of your screen and look for the "ezHasil services" menu. Click on that, then select "e-filing." Once you're there, you'll see a bunch of options. Please ensure that you choose the right form - e-BE Year of Assessment 2023. Note that this is only for those without a business source of income (keep in mind that you’re filing for 2023 income tax in 2024). 
 

4. Check if the details are correct

First things first, take a moment to review your details. If anything needs updating—like a new passport or changes due to marriage (or divorce), as of 31 December 2023 — go ahead and make those adjustments now. It's important to ensure everything is accurate before moving forward.




Next up, you'll come across a few more details about yourself. Here's where you'll declare if you've sold any taxable assets under the Real Property Gains Tax (RPGT) Act. Also, you can mention any tax incentives you've received here.



Keep an eye out because some of your info might already be filled in for you, but it's essential to double-check for accuracy. Oh, and don't forget to provide your bank account details for income tax returns. That way, the government can smoothly deposit any owed money.


5. Provide your income details


Next, key in your income details in the relevant categories based on your EA form for this part. Check if the total monthly tax deductions (MTD/PCB) displayed are correct. Your company will provide the EA form, so don’t kancheong, you can refer to that.


Other than that, you can also declare any donations or gifts you've received. Just a heads-up, though: make sure the organization you're donating to is approved by LHDN. If you're not sure, you can always hop onto the LHDN website to check the status of the charitable organization. It's always good to double-check to ensure everything's in order!
 

6. Claim those tax reliefs, rebates and exemptions

 


 

Since the cost of living is rising, you should take this advantage to reduce the amount of taxes you’d need to pay is through these three things – exemptions, reliefs and rebates. Things that you claim are medical and life insurance, books, EPF/SOCSO contribution,   fees and fitness equipment, just to name a few.

So keep the receipts as proof of purchase/spending for the items you’re claiming for up to 7 years.


READ: Claim As Much As Possible For Your Tax Refund!

 

 7. Check your final tax amount


After completing the necessary steps, you'll land on the last section labeled 'Summary'. The system will then assist you in calculating your taxes, which can be particularly helpful if you struggle with math. In this section, you will be informed whether you have overpaid or underpaid your income tax. The amount of this balance or excess takes into account the Monthly Tax Deduction (MTD), also known as PCB.
 

8. Declare that income and voila!

The part that we taxpayers are waiting for - is to declare that all the information you provided is true. All you have to do is to give your electronic signature and send it off - SETTLE! Take note that you’re still able to make changes or double-check the information given after the submission.



Oh.. If you pay late, will you get a penalty?

If you pay late after certain dates, you have to add an extra 10% later. The deadline depends on where the source of income comes from:

  • Apart from business (paying salary & commission!): April 30

  • Your own business: June 30


If you still fail to pay the taxes and penalties imposed within 60 days, you will get an additional penalty of 5% on the outstanding amount.

If you think you can lari, admin advises you to think carefully, because LHDN can trace these taxpayers using data analysis and with the help of local and foreign agencies, you know. Don't look for problems lah.

And, if you feel that you’re not sure or have some issues declaring your taxes, don’t hesitate to talk to the LHDN officer. They can help you out and come to a mutual agreement. Haaa...whatchu waiting for? Let’s be a responsible citizen ye kawan-kawan.



*The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.


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About the Author

Nisya Aziz

A storyteller at Finology, who drinks coffee like its water, Nisya enjoy bringing valuable, educational and entertaining content to others. When not busy crafting content, you’ll find her in the boulder gym or on stage, performing theatre shows.

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