BLOG

Personal income tax in Malaysia, or individual income tax in Malaysia is levied on the salaries, wages, dividends, interest, and other types of income that an individual earns during a year.

Most Malaysian citizens and permanent residents (a person who stays for more than 182 days in Malaysia in a calendar year) need to file a tax return. Starting from 1^st March of every year, employees/taxpayers can start submitting their income tax return forms through the e-Filing system.

Every taxpayer is benefitted in some way or the other by the tax they pay. There are also a few personal benefits that taxpayers enjoy for paying taxes and filing their income tax diligently.

1. Claim tax refunds – Government requires taxpayers to fill their e-Filing to eligible for tax refunds. As most taxpayers are on Monthly Tax Deduction (MTD/PCB), where a percentage of their salary is deducted by their employer for income tax, there is high chance that you overpay your taxes, especially if you are eligible to claim tax relief.
2. Loan approvals – Many of these loans are approved only if the taxpayers have filed their tax return on time and have paid the taxes on time. Once you’ve submitted your filing for the year, keep a copy of it should you need to present it for your loan application.
3. Contribute to the growth of the company – Government encourages taxpayers to pay their taxes on time, as it ensures the growth of country. The growth of country lead to better jobs and better life for all.
4. Enjoy tax relief – There are personal reliefs that every taxpayer in Malaysia can deduct once their income reaches the chargeable income level. In addition, there are other reliefs that you can deduct from your chargeable income if you had spent money in that category for the year.

These are some of the benefits of filing tax. It is our responsibility to pay income tax every year in an effort to help the country and those who are less able.