Income Tax Exemption In Malaysia And How To File e-Filing 2024

Are You Eligible For Income Tax In Malaysia?

Who Needs To Pay For Income Tax?

Every month, you will receive a payslip if you are employed. If your monthly salary is around RM2,833.33 (or more than RM34,000 annually) after the Employees Provident Fund (EPF) deduction, you need to pay taxes.

If you work independently or as a freelancer receiving income from Malaysian companies or have your own business, you also need to pay taxes if your income reaches RM34,000 annually. Some companies also deduct taxes from your salary.

Please note, the calculation of the individual income threshold that is NOT TAXABLE takes into account the annual gross income minus the individual's basic relief and eligible tax rebates. The table shows the individual income threshold that is NOT TAXABLE according to the type of assessment.

Note:

• The total individual and dependent relative relief is RM9,000
• The total child relief for children under 18 years old is RM2,000/child
• The rebate eligibility amount (for self and spouse) is limited to individual taxable income up to RM35,000

Why Should We Pay Income Tax?

The taxes you pay will be used by the government for national development such as building infrastructures, paying government officials, scholarships, facilities such as public recreation parks, educational institutions, health initiatives, security, defense, pensions, and including scientific and medical studies.

Consequences Of Not Paying Income Tax

1.     Charged with 10% penalty

If you do not pay taxes, you could be penalized 10% of your taxable income. Assuming you have exceeded a month of not paying your income tax, you can be charged another 5% penalty. This can potentially be a source of outstanding debt so it is best that you settle your tax payments as soon as possible. For the list of full offenses, refer to LHDN website.

2.     Court action

If you still do not pay your taxes after a period of time, do note that court action can be taken. Your property and personal belongings can be confiscated by the government. You can also be jailed if the tax debt remains unresolved even after your property is confiscated.

3.     Not allowed to leave the country

Travel restrictions can be imposed if you have overdue outstanding debts. This can happen even if you are a director of a Malaysian company who does not declare or pay income tax. This can impact both your business as well as the quality of your life.

When Can You Fill Out e-Filing 2023?

The e-Filing form for the 2023 assessment year will be available from March 1, 2024. Therefore, please ensure that you already have a MyTax LHDN account to facilitate the e-Filing process. 

How to Register MyTax LHDN e-Filing 2024

1. Apply to get an income tax number

If this is your first time paying taxes, before you use e-Filing, you need to register to get an income tax number. There are 2 methods to get an income tax number: online (e-Daftar) or manually by filling out a form at an LHDN branch counter.

Fill Out Form at an LHDN Branch

You need to manually obtain an income tax number at the nearest Inland Revenue Board of Malaysia (HASiL) branch. The required supporting documents are:

• CP600 form (can be downloaded from Forms > Download > Registration)
• Identification card (new IC, military, police, or passport)
• Business Registration Certificate (for individuals running a business)
• Income statement/pay slip

Register Online (e-Daftar) at MyTax LHDN Portal

This MyTax portal is a platform that provides primary access to ezHASiL services online, involving the Inland Revenue Board (LHDN).

The MyTax portal is the official website for using LHDN e-Filing, LHDN e-Daftar, ByrHasil for income tax payments, e-Janji Temu for appointment applications for Taxation, Real Property Gains Tax (RPGT), and Stamp Duty, among others. This portal is introduced to facilitate taxpayers in paying taxes on time without having to visit an LHDN branch.

The required supporting documents include a passport for Non-Malaysian citizens and a Business Registration Certificate (for individuals running a business).

2. Register to get the MyTax LHDN PIN number

Once you have your income tax number, you need to request a PIN number to activate your account on the MyTax LHDN portal.

How to Log In to MyTax (Registered Users Without a Digital Certificate)

e-CP55D – Application form for PIN number for first-time online login

1. Click the e-CP55D button and you will be directed to the information confirmation page
2. Click the YES button, ensuring the registered email information is correct
3. Click the NO button if the email information is incorrect
4. A Successful Registration Notification will be displayed when the user successfully logs in for the first time
5. An activation link will be sent to the email registered with LHDN
6. To activate the Digital Certificate, users need to click the activation link (URL) sent via email
7. The link is valid for only 2 days from the date the email is received

After clicking on the link sent to your email, you can continue the process to register the digital certificate.

3. Register MyTax Digital Certificate

1. The PIN number will be displayed
2. Select the type of identification
3. Click the Submit button
4. Basic information confirmation will be displayed
5. Ensure all information is correct, and create your password
6. Create a security phrase
7. Click Agree, and Submit
8. If there are any changes, click Again
9. The system will display a Successful status for the registered digital certificate generation
10. Next, click OK
11. After that, you can log in to the MyTax portal

4. Log In to MyTax (Registered Users with Digital Certificate)

1. Please select the type of identification (IC number, Passport number, Military number, Police number)
2. Please select the type of identification, enter the IC number, and submit
3. Ensure the security phrase, enter the correct password, and click the login button
4. A successful status notification will be displayed if the taxpayer successfully logs in to the MyTax main page

If the display shows that you do not have a digital certificate, you need to obtain a new PIN first to log in to MyTax with the digital certificate that will be sent to your email.

How to Fill Out LHDN e-Filing for the Assessment Year 2023

1. Log in to the MyTax portal and click on the ezHasil Services menu, then select e-Filing.

2. The screen will display e-BE for the Assessment Year 2022, e-Permohonan Pindaan BE, e-Borang, e-Semakan Pengesahan, and e-Kemaskini Pelepasan 2023.

3. Click on e-Borang to select the correct e-Filing form and assessment year for your status. (e-Borang BE for the assessment year 2023 will open from 01/03/2024)

Here is a list of LHDN e-Filing forms available on the MyTax portal for your reference:

Resident Individuals

• e-BE: No Business Income
• e-B: With Business Income
• e-BT: Knowledge Worker or Non-Citizen Holding Key Positions or Skilled Workers (Returning Expert Program) approved by the Minister – refer to P.U (A) 344/2010 or P.U.(A) 151/2012 on the Official LHDNM Portal

Tax Return Forms for Non-Resident Individuals

• e-M: Tax Return Form for Non-Resident Individuals
• e-MT: Knowledge Worker subject to approval by the Minister – refer to P.U. (A) 344/2010 on the Official LHDN Portal

Non-Individuals

• e-P: Partnership Tax Return Form
• e-E: Employer's Tax Return Form

The information on the e-Filing form is divided into 4 sections:

• Individual Information
• Statutory Income, Total Income, and Previous Years' Income Not Yet Reported
• Relief / Rebate / Tax Deductions / Tax Exemptions
• Summary

4. Please fill out all the required information completely to facilitate the calculation of your income tax and tax relief.

5. Finally, you need to verify the tax assessment form and then submit it to LHDN online.

6. If you are satisfied with the completed form, please click 'Sign & Submit'. Once you click, the Signature screen will be displayed. Enter your identification number and the correct password to submit the completed form.

List of Individual Tax Reliefs for Assessment Year 2023 LHDN (e-Filing 2024)

(updated on December 26, 2023)

1. Individual Tax Relief

• Individual and dependent relatives: RM9,000
• Disabled individual: RM6,000
• Disabled spouse: RM5,000
• Spouse/alimony to former wife: RM4,000
• Self-education fees: RM7,000

2. Lifestyle, Medical & Related Equipment Tax Relief

• Installation/rental/purchase/facilities for electric vehicle charging for personal use: RM2,500
• Medical treatment for special needs and parental care: RM8,000
• Special support equipment: RM6,000
• Lifestyle: RM2,500
  • Purchase of books
  • Purchase of personal computer
  • Smartphone/internet
  • Purchase of sports equipment, gym membership fees
  • Additional RM2,500 for the purchase of personal computer, smartphone, and tablet
• Additional lifestyle relief of RM500 related to sports activities
  • Purchase of sports equipment
  • Rental/fees for any sports facility
  • Registration fees for sports competitions
• Purchase of breastfeeding equipment: RM1,000
  • Only for female taxpayers
  • Child under 2 years old only
  • Claim made once every 2 years
• Medical expenses for serious diseases, fertility treatments & full medical check-up (self, spouse or child) limited to RM8,000 (including full medical treatment, mental health check-ups or consultations for self, spouse or child, COVID-19 detection tests and approved vaccinations limited to RM1,000)

3. Child Tax Relief

• Child under 18 years old: RM2,000
• Child 18 years old and above: RM2,000 (unmarried/full-time student)
• Child 18 years old and above: RM8,000 (unmarried/studying at higher education institution)
• Registered childcare center/kindergarten fees: RM3,000
• Disabled child: RM6,000
  • Additional relief for disabled child RM8,000 (studying at higher education institution – Diploma/above)

4. Contributions/Donations Tax Relief

• Life insurance and EPF *for public sector employees and pensioners RM7,000 or
• For non-public sector employees *life insurance/takaful RM3,000
• EPF/approved scheme: RM4,000
• PERKESO: RM350
• Retirement scheme and deferred annuity: RM3,000
• Medical and education insurance (self/spouse/child): RM3,000
• SSPN (net savings): RM8,000

Video: How to do e-Filing & Pay Income Tax LHDN via Online (1st Time)

Income Tax ByrHASIL 2023 Payment Method

There are 2 ways to make tax payments: FPX Payment Using Tax Identification Number or FPX Payment Using Bill Number. Both income tax payments can be made via FPX, credit card, debit card, LHDNM payment center counters, banks, post offices, and overseas money transfers. For income tax payments through FPX as a gateway for tax payments, users need to have an internet banking account with any bank that participates in FPX.

Pay Tax And Avoid Debt

 Once you have filled and submitted the form for tax e-Filing, you will need to pay the amount listed as taxable income. Remember, you will be charged a 10% penalty in case of late payment and the next 5% would be charged if it is not paid after a month. If you want to avoid penalties and bad debt, it’s best to complete e-Filing and pay taxes as soon as possible. Be a responsible Malaysian so that your life, family, neighbors, and friends in this country can continue to remain peaceful and comfortable.

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