As we enter the month of March, it is the season to file your tax return, have you filed your tax return yet? If your annual income is more than RM37,333, you should definitely file your tax return.
Everyone who works or does business in Malaysia is obliged to file a tax return. Many people would confuse filing tax return with paying tax. In fact, filing tax return is just to report your past year’s income to the government, while paying tax is to submit the tax to the government. A person who files a tax return does not necessarily have to pay tax, but only if his or her income exceeds a certain amount.
According to the official website of Inland Revenue Department (LHDN), single person whose annual income is less than RM37,333 or monthly income is less than RM3,111 is not required to pay tax.
Married families filing separate tax returns with no children are also not required to pay tax if their annual income is less than RM37,333 or monthly income is less than RM3,111. Families with 1 child will not be taxed if their annual income is less than RM39,333 or monthly income is less than RM3,278. For married families with 2 children filing a separate tax return, as long as the annual income is less than RM41,333 or the monthly income is less than RM3,444, no tax will be levied.
For married families filing a joint tax return, families with annual income less than RM48,000 or monthly income less than RM4,000 without children do not need to pay tax. For families with 1 child, as long as the annual income is less than RM50,000 or monthly income is less than RM4,167, no tax is payable. For a family with 2 children, as long as the annual income is less than RM52,000 or the monthly income is less than RM4,333, no tax is payable.
This example is based on a personal deduction of RM9,000 and a deduction of RM2,000 for each child under 18 years of age, but the actual tax payable will depend on the tax deductions available to the filer.
Groups that do not need to pay tax
1. Single person
Annual Income: RM37,333
Monthly Income: RM3,111
2. Married persons filing separate tax returns
A. With 1 child
Annual Income: RM39,333
Monthly Income: RM3,278
B. With 2 children
Annual Income: RM41,333
Monthly Income: RM3,444
3. Joint Tax Return
A. No children
Annual Income: RM48,000
Monthly Income: RM4,000
B. With 1 child
Annual Income: RM50,000
Monthly Income: RM4,167
C. With 2 children
Annual Income: RM52,000
Monthly Income: RM4,333
