Ah, taxes. No, seriously—Ah! Taxes! Every single year, I’ve gotten by at the last minute trying to calculate how much I can minus off the total tax I need to pay the Malaysian government. And every year, after figuring out how to file my taxes, that knowledge somehow gets wiped out of my memory card. But not to worry, we’ll all go through filing our taxes together.
If it’s the first time you’re filing taxes, let’s first make sure that you’re eligible for it. You’re eligible if you’re a Malaysian individual that earns an annual employment income of at least RM34,000 (after EPF deduction). You could easily find that out by looking up the total under “Rough Income/Gaji Kasar” in your EA Form given by your employer—you should have gotten it by now.
You’ll also need to register yourself as a taxpayer to LHDN—if you haven’t yet. Then, register for e-Filing, which is LHDN’s online income tax filing platform. To register as a taxpayer, you can go to the LHDN office with a copy of your MyKad or equivalent, a copy of your latest salary slip or EA form, and—if applicable—a copy of your marriage certificate. But there’s a much easier way to register: online, through e-Daftar.
After registering, LHDN will email you with your income tax number within 3 working days. Alternatively, you can either check online via e-Daftar, or give LHDN a call at 03-89133800.
To register or log in to your e-Filing for the first time, you’ll need a PIN provided by the LHDN. You can either visit the LHDN Customer Feedback website and look for e-Filing PIN number application under Application, or go to the LHDN office. Once you’ve got the PIN number, log into e-Filing with it and set up your account. You can read more through this helpful guide by Ringgitplus.
So, how do I start again?
WIth your IC number and your password (hopefully would have remembered it, but if not—you can select “Forgot Password”), you’re able to log into Mytax. It’s a surprisingly colourful-looking website for something that was made by the government, and meant to be a dashboard for taxpayer-related information and services. There’s even a weird-looking cartoon man inviting you to click on his speech bubble if you need to check your income tax number.
Logging into the platform will take you to your Individual Tax Dashboard Summary. It gives out pretty useful information like outstanding tax balance, latest approved tax refund, a travel restrictions check, and how much you’ve contributed “to the nation”. You don’t really need to be here, but it’s a pretty neat platform in case there are things you need to take note of. What we’re really here for is the e-Filing form—which you can find pretty easily in the Tax Dashboard Summary without needing to put in the password again.
There are three different resident individual e-Forms—e-BE for individuals without a business source of income, e-B for individuals with a business source of income, and e-BT for “specialised knowledge workers or employees (Returning Expert Programme)”. There are also other types of e-Forms like for non-resident individuals and non-individuals (Return Form of an Employer and Partnership Return Form).
Pick the one that suits you best (as someone who does not own a company but works as an employee of one, I picked e-BE) and the year of assessment. You can also pick previous years in case you’d want to enter tax decelerations for ones you’ve missed.
You’ll then be taken to the first page of the e-Form where you’d need to reconfirm basic information like your name, ID number, and status of marriage/divorce. if nothing’s changed, go ahead and press “Next”. You’ll then be taken to a second page where you need to confirm your number, employee number, email, bank account information, whether the tax is borne by your employer, and if you have other assets.
There is also a section where you need to fill in your “incentives” just in case you have any. Incentives can be things like prize money as a sportsman, or even allowance received as a pilot or cabin crew for Malaysia Airlines—but do check if it applies to you.
For the second page, you’d need to fill in the “statutory income from employment”—and you can find the total in your EA form under “Gaji Kasar/Rough Income” AKA the total income for the year. You would also need to type in the total of employers you’ve had this year. The other things you need to type in—if it applies—is your statutory income from rents, things like interest, discounts, royalties, pensions, as well as approved investments and donations you might have received.
Under Monthly Tax Deductions (MTD), make sure the number is equivalent to the amount written on your EA form—under EPF contributions/monthly tax deductions. Once you’re done filling them in, check them once again (just for safe measure!) before proceeding to the Relief section.
What can I deduct from my taxes for 2021?
So, this is the part where we would likely spend most of the time when filing our taxes to reduce the overall tax payable. We want to make sure that we have all our receipts saved for what we can deduct in the Relief section of our e-Filing form. something to note is that for 2021, the government has been more generous with the amount that we can claim—due to COVID-19 related relief. Let’s go over what we can deduct, one section at a time.
Under Individual and dependant relatives, the amount would already be automatically added to the e-Filing form. But you’d need to manually fill out any claims for medical treatment, and other expenses for parents (up to RM8,000), any basic supporting equipment for yourself, spouse, or parent, or if you’re a disabled individual (up to RM6,000).
If you’ve also been paying for education fees, you’re able to claim for up to RM7,000 for degrees at masters or doctorate level, or even a course of study for upskilling or for self-enhancement.
If you’ve been paying for medical expenses for serious diseases, fertility treatment, medical examinations, and vaccinations for yourself, your spouse, or your child, you’re able to claim up to RM8,000. Under the same category, there’s also an added expense you can claim up to RM1,000 for any expenses on COVID-19 detection tests for yourself, spouse, or child.
For the Lifestyle section of the Relief form, move your cursor over the green “info” to view a full list of items eligible for tax deduction. You can claim up to RM2,500 for the first “expenses for the use/benefit of yourself, spouse, or child—but for these conditions:
- Purchase or subscription of books, journals, magazines, newspapers, or other similar publications (not banned reading materials)
- Purchase of personal computer, smartphone, tablet (not for business use)
- Purchase of sports equipment for sports activities defined under the Sports Development Act 1997, and payment of gym membership
- Payment of monthly bill for internet subscription (under own name)
You can claim an additional RM500 for more sports-related “additional relief”—including for sports equipment for sports activities defined under the Sports Development Act 1997, payment of rental space/entrance fee to a sports facility, or a payment of a registration fee for any sports competition where the organiser is approved and licensed by the Commissioner of Sports under the Sports Development Act 1997.
Some examples of the sports equipment you could claim are things like dumbbells, shuttlecocks, nets, rackets, and golf sets. Sports attire like swimsuits and jerseys—as well as trainers, do not count.
There’s also an extra RM2,500 you can add for the purchase of personal computer, smartphone, tablet (not for business use)—so there’s more relief for your personal tech buys. There’s also up to RM1,000 for the purchase of breastfeeding equipment, up to RM3,000 for child care fees, and up to RM8,000 for net deposit in Skim Simpanan Pendidikan Nasional.
If you have any children, you’re able to add how many of them based on the three categories—children below the age of 18, children 18 and above who are still studying, and and children with disabilities. The e-Filing form will automatically calculate how much you can claim for each child.
Underneath the children section, you can add in up to RM3,000 for life insurance. You can also add up to RM4,000 for the KWSP section, and you’re able to find the amount through your EA form.
Other things you can claim through the Relief section are up to RM3,000 for a private retirement fund, up to RM3,000 for education and medical insurance, up to RM250 for PERKESO (which you can find in your EA form), and even up to RM1,000 for domestic travels for holidays. This means that if you have any receipts for accommodations, entrance fees for tourist attractions, and vacation packages, you can add them in. You can check on the specifics of what you can claim through MOTAC, according to LHDN.
Additionally, you can add in zakat/fitrah, any journeys you might have made for Umrah or other religious pilgrimages, and tax relief that’s could be subjected to things you’ve purchased outside Malaysia. After filling what you can in, you can press “Next” for the Summary.
A summary will be shown to calculate tax payable for the year, as well as tax paid in excess—based on what you’ve filled in. The total under “tax charged” won’t be what you need to pay—the amount for “tax payable” would be what you need to look out for. But if it’s less than any MTD/Installment/CP500 payment made for the year, you might be entitled to the total tax “paid in excess” for the year. This means that you’ll be getting that amount as a tax refund from the government through the bank account you confirmed earlier in your assessment.
But if it turns out that you do need to pay tax, there are several methods of payment. You can pay via ByrHASIL—with FPX or with Visa, Mastercard, or American Express as arguably easier forms of payment. However, paying through your credit card will mean that you will also be charged an administrative charge fee of 0.80%. If you want to pay through installments, Maybank credit cardholders are able to do so through Ezpay—for 6 months (1.25%) or 12 months (2.05%) option, and are subject to a minimum amount of RM1,000 and a maximum amount of RM500,000.
You can also go to Pos Malaysia’s counter, or through a bank. If the payment is over the bank counter or Pos Malaysia, write down the name, address, telephone number, income tax number, year of assessment, payment code ‘084’ and instalment number ’99’ on the reverse side of the financial instrument. Check the receipts/bank slips before leaving the payment counter.
Take note that the deadline to submit the BE form is on 30 April 2022 while it is 30 June 2022 for the B form. However, LHDN is giving an additional 15 days for those who submit their BE and B forms via the e-Filing system “to encourage taxpayers to move from manual to online”. The status of return forms, the refund process, eLedger, and monthly tax deductions can be checked on MyTax. If you miss the deadline, and are caught by an LHDN auditor, you could face a penalty ranging from 80% to 300% of the taxable amount.
There are actually a lot of reliefs that you can take advantage of for the year 2021, so hopefully, you would have saved your receipts and looked through emails and digital files before confirming your e-Filing form to fully make use of them. Let us know if you have any other questions as well, and we’ll try to help out.