April 4, 2016
Its tax season again, folks! But don’t fret,or get stressed up about it. Here’s a handy guide to 2016’s Income Tax filing, along with all the important information you need to know about filing your income tax.
Following the 2016 Budget announcement, a new category for tax income relief was announced by the Prime Minister. Individuals who are taking care of their elderly parents can now get tax relief of RM1,500 for each parent. However, this is upon the conditions that the parents are not earning more than RM2,000 a month and are 60 years old or above. Another addition to tax relief is for those who are earning RM8,000 or below (or aggregate income of up to RM96,000 per year) will be eligible for tax relief of RM2,000.
Aside from that, the amount of tax relief for some categories are also increased. For a full list of the latest tax exemptions check out the Inland Revenue Board’s (IRB) detailed list here.
Malaysia has a progressive income tax system, which means the more you earn, the more you will need to pay. Following the tabling of Budget 2016, it was announced that high income earners who are earning more than RM1 million per annum will be charged 28% income tax, which is an increase of 3% from the previous year. However, the tax rate for the other income brackets remain the same. Refer to the infographic below to check how much your tax rate would be.
If this is your first time filing your income tax, you need to first register as a taxpayer with IRB in order to obtain your tax reference number. This can be done online here or you can go to the nearest IRB branch. If you are unsure of your status, you can check to see whether or not you are a registered tax payer at the IRB’s website.
You can only file for your income tax once you have the tax reference number which can now be done online via ezHasil e Filing or at any of the IRB branches. To pay your income tax, you have the options of paying with your credit card, through online banking, ATM machine, cash deposit machine or even at Pos Malaysia. However, not all banks offer the services to pay for your income tax so check here.
Lastly, you need to keep your EA and EC form, all of your receipts (used for tax relief such as books purchases, insurance premium, and medical) along with other supporting documents for at least 7 years. So make sure you don’t throw it out because even after filing your tax you’ll need to keep all of it with you. Remember to file your income tax before the deadline of 30th April 2016, failing which you will be charged 10% from the tax payable.
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