PERSONAL INCOME TAX
PLANNING
PLANNING
All individuals are liable to tax on income accrued in, derived from or
remitted to Malaysia. However, a non-resident individual will be
taxed only on income earned in Malaysia. The rate of tax depends on
the individual's resident status, which is determined by the duration
of his stay in the country as stipulated under Section 7 of the Income
Tax Act 1967. Generally, an individual who is in Malaysia for at least
182 days in a calendar year is regarded as a tax resident.
Effective from the year of assessment 2004, income remitted to
Malaysia by a resident individual is exempted from tax.
Resident Individual
A resident individual is taxed on his chargeable income after
deducting personal reliefs at a graduated rate from 0% to 28%.
Personal Relief (Year of Assessment 2007)
The chargeable income of a resident individual is arrived at after
making several deductions. These include:
remitted to Malaysia. However, a non-resident individual will be
taxed only on income earned in Malaysia. The rate of tax depends on
the individual's resident status, which is determined by the duration
of his stay in the country as stipulated under Section 7 of the Income
Tax Act 1967. Generally, an individual who is in Malaysia for at least
182 days in a calendar year is regarded as a tax resident.
Effective from the year of assessment 2004, income remitted to
Malaysia by a resident individual is exempted from tax.
Resident Individual
A resident individual is taxed on his chargeable income after
deducting personal reliefs at a graduated rate from 0% to 28%.
Personal Relief (Year of Assessment 2007)
The chargeable income of a resident individual is arrived at after
making several deductions. These include:
- personal reliefs for self RM8,000 (a further RM6,000 for that
individual if he is a disabled person), - spouse relief (if combined assessment RM3,000
- unmarried children below 18 years of age RM1,000 each;
- children study full time in local university RM4,000
- parents' medical expenses RM5,000;
- medical expenses on serious diseases including medical
examinations for individual, spouse or child RM5,000; - expenditure for purchase of basic support equipment for the
individual, spouse, child or parent who is disabled RM5,000; - cost incurred for the purchase of books, journals, magazines and
other similar publications for the purposes of enhancing
knowledge RM1000; - contributions to the Employees Provident Fund (EPF), life
insurance premiums RM6,000, - insurance premiums for education or medical benefits RM3,000
- disabled relief self RM6,000
- disabled relief spouse RM3,500
- disabled relief child(unmarried) RM5,000
- computer relief RM3000 (once in 5 years)
- An amount limited to a maximum of RM5,000 on fees expended
by the individual for any course of study up to tertiary level for
the purpose of acquiring technical, vocational, industrial,
scientific or technological skills at institutions in Malaysia
recognised by the Government is also allowed as a deduction. It
is further extend to any discipline in Master or Doctorate
courses in YA 2008. - sports equipment relief of RM300 with effective YA2008.
Tax Rebate
The tax charged on a resident individual is reduced by way of the
following rebates:
The tax charged on a resident individual is reduced by way of the
following rebates:
- An individual with a chargeable income not exceeding RM35,000
enjoys a rebate of RM350. Where the wife is not working or the
wife's income is jointly assessed, she also enjoys a further rebate
of RM350. Similarly, a wife who is assessed separately will also
enjoy a RM350 rebate, provided her chargeable income does not
exceed RM35,000 - The amount paid in respect of any zakat, fitrah or other
obligatory Islamic religious dues - Any fee paid to the government for the issue of an employment
pass, visit pass or work permit
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