Tax is imposed on every individual as a compulsory contribution to state revenue, levied by the government on working people’s income and business profits. In Malaysia, you are liable to yearly tax payments if your income is accrued or derived from Malaysia.
While you are preparing to file your taxes, you should understand the following terms:
1. What is taxable income?
It is the base upon which the income tax system imposes tax.
2. What is tax exemption?
Tax exemptions are certain monetary exemptions that can be claimed to reduce your taxable income. These items are completely removed from your taxable income, unlike tax reliefs, which are deducted from your taxable income.
3. What is tax relief?
It is the amount that can be deducted from your annual income to reduce your taxable income. To get a better understanding of the categories where you can receive tax relief, read our article, The Complete Income Tax Guide 2025 (YA 2024)
Here is the list of tax exemptions in Malaysia for YA 2024:
1. Individual Relief
- Individual and dependent relatives: RM9,000
- Individuals with disabilities: RM6,000
- Disabled husband or wife: RM5,000
- Husband/wife/alimony to ex-wife: RM4,000
- Education fees (self): RM7,000 (Additional restriction for upskilling/self-enhancement: RM2,000 max)
2. Lifestyle, Medical & Related Equipment
- Medical treatment, special needs and carer expenses for parents (Medical condition certified by a medical practitioner): RM8,000 (Additional subcategories for dental, vaccination, and mental health: RM1,000 max each)
- Basic supporting equipment for disabled self, spouse, child or parent: RM6,000
- Lifestyle: RM2,500
- Purchase of sports equipment, and gymnasium membership fees: RM1,000
- Purchase of personal computers, smartphones and tablets: RM2,500
- Domestic travel expenses: RM1,000
- Purchase of breastfeeding equipment: RM1,000 (Once every two years)
- Medical expenses for serious illness & fertility treatment expenses: RM 10,000 (including full medical treatment, COVID-19 detection test, mental health examination, and vaccination allowed limited to RM1,000)
- EV charging facilities (non-business use): RM2,500
3. Child Relief
- Child under 18 years: RM2,000
- Child 18 years and above: RM2,000 (unmarried/studying full-time)
- Child 18 years and above: RM8,000 (unmarried / studying at IPT)
- Registered daycare/kindergarten 6 and below fee: RM3,000
- A child with disabilities: RM6,000
- Additional for a child with disabilities RM8,000 (studying at IPT – Diploma / above)
4. Contributions
- Life Insurance and EPF: RM 7,000
- EPF / Approved Scheme: RM4,000
- SOCSO: RM350
- Deferred retirement and annuity scheme: RM3,000
- Medical and education insurance (individual/spouse/child): RM3,000
- SSPN (net savings): RM8,000
4. What is a tax rebate?
Tax rebates, also known as tax returns, is a reduction in your tax expenditure after you have calculated your tax for the year.
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If your chargeable income does not exceed RM 35,000, you will receive a rebate of RM 400.
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Rebates for Zakat, Fitrah, or other Islamic religious events are also applicable for rebates.
Now that you are familiar with the above terminologies, you can use the following questions as a guide to filing your taxes:
5. Are you a tax resident?
Yes, if you are residing in Malaysia for at least 182 days in a calendar year.
6. Are you taxable?
You are if your income is more than RM37,333 per year.
7. How much tax is imposed if you are a resident individual?
The tax rates change according to the level of your chargeable income, as shown below:
| Chargeable Income (RM) | Rate (%) | ||
|---|---|---|---|
| On the first | 5,000 | 0 | 0 |
| On the next | 15,000 | 1 | 150 |
| On the first | 20,000 | 3 | 150 |
| On the next | 15,000 | 3 | 450 |
| On the first | 35,000 | 6 | 600 |
| On the next | 15,000 | 6 | 900 |
| On the first | 50,000 | 11 | 1,500 |
| On the next | 20,000 | 11 | 2,200 |
| On the first | 70,000 | 19 | 3,700 |
| On the next | 30,000 | 19 | 5,700 |
| On the first | 100,000 | 25 | 9,400 |
| On the next | 300,000 | 25 | 75,000 |
| On the first | 400,000 | 26 | 84,400 |
| On the next | 200,000 | 26 | 52,000 |
| On the first | 600,000 | 28 | 136,400 |
| On the next | 1,400,000 | 28 | 392,000 |
| On the first | 2,000,000 | 30 | 528,400 |
| Above | 2,000,000 | 30 |
Now, you must be wondering what chargeable income is.
It can be simplified into a formula as follows:
Chargeable Income = Taxable income – Tax exemptions – Tax Reliefs
8. Are there any changes in tax rate for resident individuals from the previous year?
Yes, for the year 2016, tax rates for resident individuals whose chargeable income is from RM 600,001 to RM 1,000,000 have increased by 1%, and chargeable income exceeding RM 1,000,000 has increased by 3%.
9. How much tax is imposed if you are a non-resident individual?
| Type of income | Tax rate |
| Public entertainer’s professional income | 15% |
| Interest | 15% |
| Royalty | 10% |
| Rental of movable property or service charge from use of property/plant/machinery | 10% |
| Business and employment income | Increased from 25% to 28% |
| Income other than the above | 10% |
10. What other items are taxable?
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Perquisites - benefits or perks that come with your employment that can be converted into monetary value are taxable including bill claims, company credit cards, company loans, sponsored club memberships, sponsored child tuition fee, personal driver and any other benefits offered by your employer that could be converted into cash.
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Benefits in kind (BIK) are also taxable. Benefits in kind are benefits or perks that come with your employment that could not be converted into monetary value like cars, lodging, electronics and home furnishing.
11. What is the deadline for filing your taxes? Which form should you fill?
| Form | Type | Due Date |
| BE Form | Individuals without business source | 30th April every year |
| B Form | Individuals with business source | 30th June every year |
| M Form | Non-resident without business source | 30th April every year |
| M Form | Non-resident with business source | 30th June every year |
| P Form | Partnership | 30th June every year |
12. What documents should you prepare before filing your taxes?
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Form EA/EC: This form is collected from your employer that mentions the amounts of tax you need to pay and how much tax have been paid by your employer on your behalf.
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To Choose Form BE or Form B?
Your source of income will determine the type of form you have to fill up. You can now also do this online at www.hasil.gov.my -
What records should you keep?
Receipts for preceding 7 years from the date of filing, which have been used as evidence of tax reliefs.
13. Where can you file your tax return in the quickest possible way?
In the e-filing website from www.hasil.gov.my
14. What do you need if you are filing your tax return for the first time?
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You have to obtain a PIN from the Tax Return Form
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You have to provide the following details and documents for the PIN application:
(1) Tax Reference Number
(2) Latest Address
(3) Copy of IC/Passport
(4) Telephone Number
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For the email application, send all 4 required documents to [email protected]
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Register for e-filing in the nearest Inland Revenue Board (LHDN) branch by mail, fax, or e-mail.
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After your first time logging in, you do not need to register again for tax returns for the subsequent year. Just remember your password and continue to complete the form only.
15. Where can you get assistance and more info on filing taxes?
To assist taxpayers, especially on e-Filing services, the Inland Revenue Board of Malaysia (IRBM) has opened an e-Filing service counter at every branch nationwide. Please contact the nearest IRBM branch for your e-Filing consultation.
If you do not receive your refund automatically, you should send an email to [email protected]
*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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