Assessment of Tax
Q : How do I register an Individual income tax reference number?
A : There are 2 methods of registering an income tax reference number:
i) You can register manually at the nearest IRBM branch by bringing along a copy of your identification document, remuneration statement and business registration for business cases.
ii) You can register online through e-Daftar. Please visit http://edaftar.hasil.gov.my/
- Q : I have not received my Income Tax Return Form. How do I obtain a copy of the said form?
A : You may contact the Assessment Branch where your income tax file is registered or the nearest IRBM office and request for the relevant forms.
- Q : I have shifted office from Kuantan and I am currently working in Shah Alam but my income tax file is at the IRBM Branch in Kuantan. Can my income tax file be transferred to Shah Alam?
A : You may, by way of telephone or letter, request for your tax file to be transfered to the IRBM Shah Alam Branch. You will be required to inform IRBM of any future change of address.
- Q : Can I make a claim on medical expenses expended on myself ?
A : You may claim medical expenses for serious diseases expended on you, your spouse or child up to a maximum of RM 5,000.00 a year and medical expenses for parents up to a maximum of RM 5,000.00 a year. Such a claim must be supported by original receipts issued by a medical practitioner.
- Q : Do I have to register a company tax file if my company has not commenced operations?
A : A company tax file has to be registered only when the company has commenced operations/business.
- Q : What are the conditions to claim deduction on housing loan interest?
A : Interest expended to finance purchase of residential property. Relief of up to RM10,000 a year for three consecutive years from the first year the interest is paid. Subject to the following conditions:
- Q : I have filed my income tax return form For Year Assessment 2011 and the tax payable amounts to RM1,200.00. Do i have to settle the difference in the amount of tax. The MTD deduction from January to December 2011 totals to RM1,000.00.
A : If you are in the payment scheme under MTD, you do not have to pay the whole amount of tax that was assessed. In this case, you are only required to pay the balance RM 200.00.
- Q : According to my calculation, I am not liable to tax for the year of assessment 2011. What should I do to allow my employer to stop / cancel my deductions under MTD?
A : You may contact the Assessment Branch directly for confirmation of your non-liability, and then inform the Collections Branch and request for the issuance of a letter to your employer to stop the MTD deductions.
- Q : My monthly deductions are too low compared to the actual tax payable. How can I increase my deductions to settle the tax payable?
A : You may request to your employer to increase your monthly deductions to settle the tax payable. Employers do not have to wait for instructions from the Collections Branch to increase the amount of the monthly deductions for purposes of paying tax.
- Q : My monthly deductions are in excess of the total tax assessed. How do I apply to cancel further monthly deductions and also obtain my over payment of tax?
A : You may contact the Collections Branch directly to obtain a letter to stop the deductions. You may apply for a refund of your overpayment, with the condition that all assessments have been finalised to-date.
- Q : Is there any limitation to the number of children entitled to child relief under the Income Tax Act?
A : There is no limit to the number of children, but relief will only be given for any dependent, unmarried child who at the time is:
i. below 18 years of age;
ii if above 18 years of age, is in receipt of full time education or is under articleship or indenture in trade or profession; or
iii. is physically or mentally disabled (relief for physically or mentally disabled child is RM 5,000.00).
- Q : I am going to retire from civil service, how do I obtain my income tax clearance certificate?
A : You may contact the Assessment Branch where your income tax file is registered and bring along your Form CP 22 B (Notice of Cessation of Employment) that has been completed by your employer. Please ensure that your employer forwards the Form CP 22 B to the relevant IRB Assessment Branch, 6 months prior to your retirement.
- Q : I run a provision shop and from time to time sell provisions at the night market. Can I pay my income tax through the Monthly Tax Deduction (MTD) scheme?
A : No, the MTD is strictly for person (s) under employment contract only. If you are in business or are self -employed, you can pay your tax through the bi-monthly installment payment scheme. If you are not in the installment scheme, you will have to settle your tax liability within 30 days from the date of the Notice of Assessment (Form J).
- Q : Would a penalty be imposed if I delay the submission of my return form?
A : Yes, a penalty will be imposed if there is a delay in the submission of the return form. All return forms must be submitted within 30 days from the date stated on the form or a period that has been stipulated.
- Q : If I pay zakat or fitrah (religious tithes), can I make a claim to off-set it against the tax payable?
A : Yes, you may if you are a Muslim. You have to forward the original receipts, which are on your name, to substantiate your claim.
- Q : If I make a donation to the mosque's fund, can I make a claim for deduction from my tax?
A : You may make a claim for deduction for the donation made but the donation must be made to a body or fund approved by the Director General. The approval (gazette notification) will be stated on the receipt.
i) the taxpayer is a Malaysian citizen and a resident;
ii) limited to one residential unit;
iii) the sale and purchase agreement is signed between 10th March 2009 and 31st December 2010; and
iv) the residential property is not rented out.
Payment of Tax
Q : Where can I make my Individual income tax payment ?
A : Individual income tax payment can be made at:
i) IRBM payment counter (Jalan Tuanku Abdul Halim, Kuala Lumpur, Kota Kinabalu, Sabah, & Kuching, Sarawak)
ii) Counter (CIMB Bank, Public Bank, Maybank, RHB, Bank, Affin Bank, Bank Rakyat & Pos Malaysia)
iii) ByrHasil. Please visit https://byrhasil.hasil.gov.my
iv) Internet banking (CIMB Bank, Public Bank, RHB Bank, Maybank, Hong Leong Bank & Pos Malaysia)
- Q : What is MTD / PCB?
A : Monthly Tax Deduction (MTD or PCB) which was introduced on 1st January 1995, is a system of tax recovery where employers make deductions from their employees' remuneration every month in accordance with the MTD Schedule. This is mandatory, in that neither the employer nor employee has any choice in the matter. Any deviation from the requirements of the Income Tax (Deduction from Remuneration) Rules 1994 can only be upon written authorization from IRBM.
- Q : How does MTD differ from CP38 deduction?
A : MTD is an automatic deduction made every month, while CP 38 deduction arises only when IRBM issues a specific direction to the employer requiring him to make deductions of certain amounts for a specified number of months. Such CP 38 deductions are generally for settlement of outstanding taxes while MTD is on current income (Pay As You Earn - PAYE)
- Q : Can MTD be remitted through tapes or diskettes?
A : This method of remitting MTD is allowed; in fact employers having more than 20 employees are encouraged to submit their MTD payments through tapes or diskettes as this speed the process of payment and at the same time reduce any errors arising during the input process.
However, whatever mode of remittance that may be used, employers are reminded to furnish complete and accurate particulars of all employees so as to avoid delay in crediting the deductions to the respective individual accounts.
- Q : What category of income is liable to MTD?
A : MTD is due only on employment income, i.e., on remuneration that arises from a master servant relationship, and this includes all payment other than benefits-in-kind [Section 13(1)(b)], accommodation benefits [Section 13(1)(c)] and reimbursements. Employment income subject to MTD includes salary, wages, commission, overtime, allowances, director' fees, tips and bonuses arising out of exercising the employment. The employer adds up such income, subtracts the employee's EPF contribution (subject to a maximum of RM500 per month or RM 6000 per year), and deducts the MTD in accordance with the relevant category in the MTD Schedule that the employee comes under. However, where the payment is bonus or other lump sum payment, a special formula has to be adopted to determine the MTD.
- Q : How to calculate the MTD for director's fees?
A : In cases where the Director's Fees is paid monthly together with other monthly remuneration, both the relevant amounts must be added together in order to determine the MTD.
For cases where only Director's Fees is paid monthly, the MTD is determined in the usual manner.
Where a director is paid a monthly remuneration and he receives Director's Fees in a lump sum, the MTD is calculated by using the Bonus Formula.
In instances where the director receives only Director's Fees and paid in a lump sum, the relevant amount is divided by the number of months for which the payment relates. MTD is determined accordingly and then multiplied by the number of months in question. E.g. A director receives annual Director's Fee of RM36,000.00, without any other remuneration. Therefore the amount applicable per month is RM3,000.00 (RM36,000.00 / 12). The MTD for RM3,000 is determined and then multiplied by 12.
Q : How to deduct MTD if the reference number of the employee is not known?
A : Please contact the nearest IRBM branch to enquire on the tax reference number. If an employee does have a tax reference number, action must be taken to register a tax file.
Q : What reference number should be used if the employee has two or more reference number as, for example, in the case of a married woman?
A : In the case of a married women, please quote the husband's reference number but ensure that the wife's code is stated. For other cases, contact the nearest IRBM branch for assistance.
Q : An over-deduction has been made in respect of an employee for a particular month. Will a refund of the excess amount be made to the employer?
A : No. As the monthly deduction is made from the employee's remuneration, any refund will accrue to the employee in question
Q : Remittance of an amount in excess of that stated in the deduction table has been discovered? Can an adjustment be made in the following month's deduction?
A : An adjustment is acceptable provided a covering letter explaining the position is sent together with the adjusted deduction. Adjustments are not allowed for different years, for example, an error relating to the deduction in December 1999 cannot be rectified by an adjustment in the deduction made in January 2000. It is advised that you seek assistance from the nearest IRBM Branch before making any adjustments.
Q : An employee is about to cease working. Are tax deductions still required?
A : Yes. In addition to comply with the monthly tax deduction, the following must also be complied with if that employee is known to be retiring from employment:
- All monies due to the employee must be withheld.
- A notification of cessation through Form CP 22A (Form CP 22B for employees in the public sector) must be immediately forwarded to the relevant IRBM Assessment Branch.
- The correct amount of tax to be paid (if any) must be remitted to IRBM immediately upon receipt of the certificate of tax clearance.
- Q : An employee wants tax to be deducted at higher amount than that determined by the schedule. Can this be done?
A : An employee's actual tax liability may be higher than the total amount of his deductions because of income from other sources. Higher deductions can be made if the employee so requests.
Q : Will tax deductions be applicable to an employee who makes zakat payments?
A : Where an employee pays zakat through monthly deduction from his salary, the employer may off-set such zakat payments against the amount of tax deduction for the respective month.
However if zakat is paid in other manner, the employee concerned should contact the IRBM branch which handles his tax file for further assistance.
Q : Will tax deductions be applicable to an employee who is entitled to a refund after taking into account tax deducted at source from dividend income?
A : Tax deductions are applicable. However, the employee concerned may contact the Inland Revenue office which handles his tax file for assistance.
Q : If a directive to employer to deduct tax (Form CP38) is received by the employer in respect of one of his employees, will the employer still have to deduct tax under the schedular tax deduction scheme?
A : Yes, the Directive To Employer To Deduct Tax (Form CP 38) will be issued for the purpose of recovering outstanding tax only.
Q : If a taxpayer, on receiving his form J, found that MTD deductions are insufficient to cover the total tax payable, what should he do?
A : He should pay the difference within 30 days from the date of the Notice of Assessment.
Refund of Tax
Q : When will the current year's excess tax credit be refunded to me?
A : You will receive your refund within
i) 30 working days from the date of submission if the submission is done within the due date through e-filing.
ii) 3 months from the date of submission if the submission is done manually, within the due date.
Q: I have furnished my tax returns before the final date of submission and I am due for a refund. Am i required to submit an application to claim the refund?
A: No. The refund will be processed within 30 working days for e-filers or within 90 working days for manual filers.
Q: Why am I yet to receive my refund as per the time frame stipulated in IRBM's Client Charter?
A: The delay in the refund process may be due to the need for auditing of the return form that was furnished. Nonetheless, you are advised to contact the IRBM branch which handles your tax file or the Hasil Care Line for further information.
Q: I furnished my return form after the due date for submission, when will i receive my refund?
A: The refund will be processed after the imposition of penalty.
Q: I have yet to receive my refund, even though it has been more than 3 months of submitting the return form.
A: You are advised to contact the IRBM branch where your tax file is located or the relevant Customer Care Officer. Alternatively, you may contact our Hasil Care Line at toll free number 1-800-88-5436 (LHDN) to check on the status of your refund.
Q: I am eligible for a refund (dividend), am i required to furnish my dividend vouchers to IRBM's branch?
A: The vouchers need not be sent unless it is requested by the officer handling your tax file.
Q: I have received a letter informing that my refund has been approved, however i am yet to receive the refund cheque.
A: The refund cheque will be processed within 14 working days from the date the refund is approved. If you have not received the cheque within that time period, please contact the IRBM branch handling your tax file or the Hasil Care Line to check on your refund status.
- Q: The cheque that i received has expired, what should i do to get a replacement cheque?
A: You are advised to contact the IRBM branch handling your tax file or the Hasil Care Line at toll free number 1-800-88-5436 (LHDN) for the issuance of a replacement cheque.
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