The income tax season is the time of the year when Malaysian taxpayers are busy filing their income tax returns. To help and facilitate taxpayers, the Malaysian government has launched a mechanism for income tax e filing in Malaysia.
The process of online income tax return filing has been introduced to reduce the time and effort consumed during a conventional method of tax filing. This makes e-filing a simple and convenient way to submit your tax returns.
If you have little or no knowledge of how to apply income tax online in Malaysia, we have got you covered. To assist you in navigating through the process of income tax e-filing, we have created this comprehensive guide.
Here, we have tried to explain the process, benefits, and tips for successful e-filing.
So let’s see what we have got here!
Understanding Income Tax E-Filing
Income tax e-filing is an online service that allows Malaysian taxpayers to submit their tax returns electronically. Initially, the facility to file income tax in Malaysia online was offered only to corporate taxpayers. However, later on, individual taxpayers were also allowed to use this option in 2004.
To offer unmatched security to uploaded data, the tax return forms are protected by Public Key Infrastructure (PKI) Technology. By using the e-filing platform, taxpayers can submit their tax returns anytime and from anywhere.
With this application, it is easy to fill, verify, and submit the tax within the less anticipated time. Since the tax returns are filed electronically and at an earlier date, you can expect tax refunds to be processed much faster.
Failing to submit the returns within 60 days of the deadline, you have to pay a 10% additional tax as a penalty. Taxpayers who don’t file their income tax without any acceptable excuse it is referred to as tax avoidance.
Avoiding tax is a crime that is dealt with a punishment of imprisonment, RM200 to RM2,000 fine, or both. Having said that, you shouldn’t even think about avoiding tax payments willingly.
With e-filing, things are getting much easier for taxpayers. So you won’t face any difficulty when following the process of online income tax return filing.
The Benefits of Income Tax E-Filing
If you wonder what are the key benefits of income tax e-filing, here are some of the most notable ones.
- The filling and submission of online tax return forms is a convenient and fast process.
- The E-filing portal is easy to navigate and tends to be user-friendly even for the first-time tax filer.
- With its automatic tax calculation feature, e-filing avoids any chances of human error.
- It allows submitting tax returns from anywhere and at any time.
- The issuance of a confirmation certificate is a surety that LHDN has received your tax form.
- E-filing enhances the efficiency of the refund process.
How e-Filling is Beneficial for the Environment
The process of online income tax filing in Malaysia proves to have a positive impact on the environment. This is because you don’t need to use piles of papers when filing online tax returns.
By reducing the use of paper, we are actually saving our trees. Also, you don’t have to commute to the LHDN office to submit the tax form, which lowers the emission of greenhouse gases.
Step-by-Step Guide to E-Filing
If you are filing your income tax for the first time, things could be pretty confusing. To assist you in this regard, we have created this step-by-step guide to e-filing.
To learn everything about e-filing income tax in Malaysia, please continue reading!
Registering as a First-Time Taxpayer
To start with, you need a scanned copy of your IC to show your identification. Non-Malaysian individuals can submit a copy of their PR (permanent residence).
The process of income tax return filing online is as under:
Step 1: Just visit mytax.hasil.gov.my and click on the e-Daftar button.
Step 2: Now select ‘Online Registration Form’.
Step 3: Once the form is open, just provide the necessary information and upload the required documents.
Step 4: After reading your details carefully, submit the form.
Step 5: You will be assigned an application number that you can use to follow up on your application.
If everything goes well, LHDN will send you an Income Tax Number (within 3 working days).
Receiving the PIN Number and Digital Certificate
By following the above process, you have now registered yourself as a taxpayer. The next step is to register for income tax e-filing via the ezHASiL platform.
To start the registration process you need a 16-digit PIN. Here is how to apply for the PIN online:
Here’s how you can apply for your PIN online:
Step 1: Go to MyTax and enter your IC number.
Step 2: You will receive a message that your Digital Certificate does not exist.
Step 3: The next step involves applying for the Digital Certificate by submitting an e-CP55D online form or e-KYC (for MyTax app).
Step 4: Fill out the form and hit the submit button.
Step 5: After that, you will receive a link via your email.
Step 6: Just click the link to activate your Digital Certificate.
Step 7: Once activated, you will be diverted back to your MyTax website.
Step 8: Your PIN will be automatically displayed when you fill in your IC number.
Step 9: The next step is important, as you need to create a strong password and security phrase for subsequent logins.
Step 10: After completing this step, click on the “Submit” button.
Step 11: Now you can access your MyTax dashboard and file your income tax online.
Gathering Necessary Information
Filing the income tax return in Malaysia is much easier via e-income tax portals. However, you need to provide the required information by submitting the necessary documents.
Here are some of the required documents for e-filing income tax in Malaysia:
- Copy of ID
- Pay/Salary slips
- Documents showing annual business income
- Copy of Marriage Certificate (If applicable)
- Bank Statements
- PRS statements
- Rental statements (If applicable)
Navigating the E-Filing System
Since you have registered as a taxpayer and created your account for e-filing, it’s time for income tax filing. This guide offers information about the e-income tax filing procedure for employees.
Here are the steps to follow when filing income tax return in Malaysia:
- Choosing the Income Tax Form
- Updating Personal Details
- Provide Income Details
- Submitting Tax Rebates, Reliefs, and Exemptions
- Verify Total Payable Taxes
- Sign and Submit
Choosing the Income Tax Form
To start with, log in to MyTax account by providing your ID and password. Once you are logged in, click on the ezHasil services menu located on the top left-hand side.
After that, select the e-filing option from the drop-down menu. This will take you to the list of different types of income tax forms. Choose the appropriate income tax form.
Note: You need to select the relevant income tax form depending on the type of your income.
Update Personal Details
This page contains the personal information of the taxpayer. Here, you can review your existing details or add new ones. For instance, you can update details like marital status i.e. married/single/divorced.
You also need to provide additional details if you have sold a taxable asset that falls within the ambit of the Real Property Gains Tax (RPGT) Act. Also, you can mention any tax incentives that you have received.
Provide Income Details
The next page requires you to fill in your income information. At this stage, you can declare gifts or donations. However, make sure you have donated to an organization that is LHDN approved.
You need to verify the total amount of monthly tax deductions (MTD/PCB). The information regarding this amount is also provided in the EA Form offered by your employer.
Submit Tax Rebates, Reliefs, and Exemptions
This is the area where you need to provide the receipts for your purchases from the last year. By doing so, you are asking for tax relief under different categories.
The maximum claimable relief under each category is also provided. Apart from this, tax rebates are calculated once the total tax on your chargeable income is determined.
Verify Total Payable Taxes
After filling up the correct fields, your taxes are automatically calculated. At this stage, you know whether you have overpaid your income tax. The amount of tax paid in excess is mentioned at the end of this page.
Sign and Submit
This is the final step where you declare that all the information provided above is true. It also requires you to electronically sign this declaration by hitting the ‘Tandatangan & Hantar’ button.
With this, you have successfully submitted your annual income tax return to LHDN.
Verifying and Submitting
Although the process of income tax e-filing is simple, you need to be vigilant when filling out online income tax forms in Malaysia. For instance, make sure to double-check the information provided at every stage of e-return filing.
Also, you must choose the right category when claiming tax reliefs, exemptions, and rebates. When submitting the online income tax return, verify the data and total taxable income.
Tips for Successful E-Filing
Here are the most prominent tips to make your journey of income tax filing online a smooth sailing
- The first thing is to keep in mind the deadline for income tax e-filing.
- For a hassle-free e-filing experience, organize all the required documents for easy access.
- Write your details on a piece of paper for quick verification.
- Stay mindful and attentive when providing necessary information.
- Make sure your Internet connection is stable.
First-Time Filers: Overcoming Challenge
When it comes to first-time filing income tax in Malaysia, e-filing proves to be a more intuitive and user-friendly option. Hence, if you are reluctant to apply income tax online in Malaysia, there is nothing to worry about.
The most common challenge faced by first-time filers is the collection of required documents and personal data. To handle this, you should consider gathering the required documents and organizing them beforehand.
Also, seek information about the most relevant relief and deduction that you can claim. In this way, you can lower the amount of tax payable.
On the other hand, if you want to file your annual income tax return without any hassle, e-filing is the way to go. This is so, as you don’t have to print the forms and spare some time to deliver them to LHDN.
You just need to provide the relevant information at every step. Hence, things are a lot easier when you choose the option of income tax e-filing.
Exploring Other Online Tax Services
In addition to Malaysia’s online income tax filing, certain other online services prove highly beneficial.
A few of these include:
Online Payment Options
Given below are the ways to pay income tax online in Malaysia:
- Online credit card payment
- Online banking through FPX
- Via ATM (Offered by a limited number of banks)
Online Tax Calculators
These calculators allow taxpayers to calculate income tax online. You can get an estimated amount of tax payable. It is also possible to compare the current tax payable with the tax paid last year.
Online tax calculators take into account the gross annual income (estimated) and other aspects like:
- Marital status
- Number of children
- Tax deductions
Online Refunds Tracking
If haven’t received your refunds, it is possible to track the procedure by visiting the LHDN website. Just log in to your e-filling account by providing the credentials. Just click ‘Refund Status’ under the ‘Services’ tab.
After entering your details, you can view the refund status. Once processed, you will be able to view the refund amount and date of issuance.
What is Tax Return in Malaysia?
The tax return is referred to as an assessment of the annual payable tax. The tax return is filed every year before or on designated date, as set by the LHDN. If the tax paid is in excess, the surplus amount is refunded within the taxpayer’s registered bank account.
How Do I File My Income Tax Return?
Filing the income tax in Malaysia is easy, as you can choose between two available options, including e-filing and paper filing.
Before you submit your tax return, you need to register yourself with LHDN as a taxpayer. If you choose e-filing, you can follow the step-by-step process of filing the income tax return.
How to File Your Taxes for the First Time in Malaysia?
You need to register yourself as a first time taxpayer with LHDN. You can do either via online platform (e-Daftar) or by visiting the LHDN branch near you. Once you are registered, you can choose between Income tax e filing or paper filing.
Income tax e filing is an intuitive process, which is designed to facilitate Malaysian taxpayers. This process makes it easy to submit your tax return on time and with utmost ease.
We have created this comprehensive guide to make every tax season less stressful for taxpayers. By going through each section of our guide, you can learn the key steps to follow while filing online tax returns.
Hence, it would be easy for you to manage your tax-related matters via e-filing. Even if this sounds too much for you, we are always there to help you.
Here at YHTan, our team of experts is always there to assist you professionally through every step of income tax e filing in Malaysia. For further information, feel free to contact us.