Filing taxes for the first time can be overwhelming but it shouldn’t be. Here are 7 tips to help you through your first tax season stress-free.
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1. First is to determine if you are eligible as a taxpayer
According to the Inland Revenue Board (IRB) of Malaysia aka Lembaga Hasil Dalam Negeri (LHDN), a Malaysian individual who earns an annual income of RM34,000 (after EPF deduction) must register a tax file and file annual tax returns.
If your annual income is above that figure, you will need to register yourself as a taxpayer to LHDN with these steps we have consolidated for you below:
Step 1: Register for your tax account with LHDN online via e-Daftar portal
Step 2: Next, you will need to upload a copy of your IC or MyKad / passport via Customer Feedback Form to complete your tax account registration.
Step 3: Then check your application status using the application number which will be given to you.
Step 4: Once successful, you will be receiving your tax number or you can check here.
Step 5: Now you’ve successfully obtained your income tax number, you need to apply for your e-filing PIN number here.
Step 6: Once you have your PIN number*, head on to the e-Filing website and click on “First Time Login” to embark your income tax filing journey.
*Similarly to e-Daftar application, you’ll receive an application number for e-filing PIN, where you can follow up on your application if necessary. Otherwise, you should receive your PIN number within 7 working days.
2. Ensure you have your latest EA form with you
An EA form is a Yearly Remuneration Statement that includes your salary for the past year, which is the year of 2023.
With that said, employees can’t file their income tax right without a full year of EA form. Therefore, please reach out to your employer to get your EA form. If you have switched to a new company last year, do get in touch with the HR at your previous company for your EA form and don’t feel bad about calling them because it is your right to receive it for your tax filing whereas it is every employer responsibility to disseminate EA form to employees.
Did you know: An individual can have more than one EA form in a year in the case of switching multiple jobs over the past year.
3. File your income tax online via e-Filing
Although we’re starting to see a recovery to our COVID-19 situation, it’s still important to stay safe so take our word and just file your taxes online. Besides, e-filing is way faster and you can forget about the queue time at LHDN office.
Furthermore, e-filing helps reduce human error because all the calculation is automatic. All you need to do is enter your income, deduction, relief and rebate in your e-filing via ezHASIL website here.
Did you know: It takes only less than 5 minutes to file your taxes online provided you have all your documents with you.
4. Verify your PCB/MTD amount
PCB is short for Potongan Cukai Bulanan also known as Monthly Tax Deductions (MTD) is your monthly deductions of your salary that go towards paying the taxes to LHDN. The main reason why it was introduced first in 1995 is to assist taxpayers who were struggling to pay the total amount of tax at the end of the year.
If you're working for a company, then your employer would be paying this PCB amount to LHDN by the 10th of every month. When you file your taxes every year, you would need to fill up tax-related details including your accumulated PCB for the year.
Once you have obtained a full year of EA form, it’s time to check the PCB amount in your EA form. If you have multiple EA forms, be sure to sum up the PCB amount. The PCB amount should match with what is being displayed in ezHASIL’s portal when you do your filling.
Based on this verification, you can then determine if you need to request a tax refund (if you have paid more tax) or need to pay more tax (when you have paid tax less than what is due).
When and how do you pay your taxes balance?
- Any balance of tax payable for the year can be paid to the LDHN via ByrHASIL website here through FPX, credit card, cheques or online fund transfer through appointed agent banks.
- Payment from overseas can be made through Telegraphic Transfer.
- Make payment before 30 April 2024 (Related Article : Deadline for Malaysia Corporate Income Tax Submission in 2024)
What if I contributed more tax?
- If you have overpaid your taxes during the year, the refund will be automatically processed by LHDN after you have filed your tax return.
- The money will be credited into your bank account within 30 days after the declaration is made. Do ensure that details of your bank account are stated correctly in your tax return.
5. Maximising your tax relief and rebates to get your money back
Tax reliefs can help reduce your chargeable income, and thus your taxes. In order words, you can save a significant amount of payable taxes if you utilise tax reliefs set by LHDN correctly.
Depending on your marital status and spending, you are eligible for a variety of reliefs and rebates but only applicable for resident individual taxpayers. Hence, it is important to go through the full list of personal reliefs and tax rebates available for you to maximise the claims and ultimately, to reduce your overall tax burden.
6. Keep your receipts with other supporting documents
Now that you have gone through all the details on tax reliefs. You’re getting excited to reduce your payable tax but hold on for a second. It is important to take note that receipts are mandatory for tax relief, so don’t try to cheat your way out and let’s be a responsible citizen with a sincere heart.
According to LHDN, individuals claiming tax relief should keep their receipts dating back SEVEN years. If individuals hauled up for an audit by LHDN and failed to provide receipts, penalty from 25% up to 45% will be imposed.
In order to complete your tax return, make sure you have the following documents:-
- Statement of Remuneration (EA form) for previous year (YA 2023) from your employer
- Income Statement for your sole-proprietorship business, if relevant to you
- Any documents, forms or receipts relating to other income that you have earned from Malaysia during the year (rental, royalties, etc.)
- EPF statement, receipts, etc. if you plan to claim personal reliefs and rebates
7. Deadline to file your income tax is 30th April every year
With our busy schedules working from home. delaying matters have become the norm. However, you should never consider delaying your income tax filing.
Due date of income tax submission will fall on every 30th April of the year. However, an extension period of two months is often expected according to past years record.
It’s not worth taking the risk, so be aware of the updated due date. According to LHDN, the penalty for Late Payment as below (within 60 days from due date):
- 10% will be imposed on the outstanding amount
- Additional of 5% will be charged on the tax and penalty unpaid
As a taxpayer in Malaysia, it is quite easy to file your income tax returns on time – all thanks to the convenience of the newly improved ezHASIL e-filing website. We hope this article has helped you in getting a better understanding of the income tax e-filing process.
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