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| By N2H | ||||||||||||||||||||||
A friend of mine who is Senior Manager of manufacturing industry recently got a pay rise of RM500, which increasing his monthly income to RM10,500 and putting him in a much higher tax bracket. He came back to me to ask whether should he take the pay rise?
Now, I would like to share with you the percentage of the increment that goes tax when the salary increase by RM500 per month.
The tax laws is different from country to country and in the Malaysia, the income from blogging or any internet business is generally taxable. Based on the taxation rules, all income realized from whatever source is considered a taxable income.
Legally, bloggers need to report their online income. However, not everyone does that because of one reason or another. For me, there’s a specific law in our country that makes our income from blogging and other internet business as a tax exempted. But, do we still need to declare our online income? Until what income level should we declare? That’s why our tax laws are not interpreted in such a way where most of the bloggers can follow.
Oh yeah…April is coming soon! I guess it will be another busy month for those who need to declare their income to Inland Revenue Board (IRB) for their individual income tax before 30th April 2010.
Income tax for the year of assessment 2010 has slight different from the year before. Therefore, I have also updated my income tax calculator to incorporate the minor changes. Click here to download the Borang BE2010 calculator. Hopefully you find this useful.
According to the Budget 2010, our personal relief has been increased from RM8,000 to RM9,000. Besides that, those internet savvy who subscribe for Internet Broadband will also can get the tax relief up to RM 500 per year. Make sure that it is registered in the name of the individual.
Generally, fixed allowances provided by an employer are considered as taxable income while work-related expenses are generally not brought to tax.
Let say you went on an outstation trip and incurred expenses on accommodation, petrol and toll. You spent RM1k and company reimburses you the sum. Since you do not earn any extra, so you won’t be taxed on your allowance. However, if your company gives you RM1.2k, you should bring the difference of RM200 to tax because it’s above what you spent already.
Since Budget 2009, there’s an exemptions for travel/petrol allowances:
Up to RM2,400 for home/office travel
Up to RM6,000 for business travel
Example 1:
If you’re given RM1k allowance for you to travel from home to office, then this entire amount will be exempted in full. But, if you’re given RM4k, RM1.6k will be taxable (RM4k - RM2.4k) since exemption is only up to RM2.4k.
It’s advisable to pay your income tax on time as the IRB doesn’t provide us the time delay. If you can pay your income tax return on time then you can avoid the penalty charges. But, if you cannot have own discipline then you may face penalties.
For those who are under employed, they have to file their returns and pay their income taxes by April 30 whereas for those who are self-employed then they need to file their returns by June 30.
Penalty Charge for Late Payment of Income Tax
As everybody known, e-Filing is an online system introduced by LHDN that allows you to submit your income tax online, which is an alternative to the manual form submission. Although e-Filing has undergone a progressive improvement but it still not yet fully robust free. The issue that I discovered was when you click on ‘setuju’ to submit the form, you will not have chance to re-edit and modify your form details anymore.
You can see that around 1.5 million Malaysian taxpayers have used LHDN e-filing system this year and more are expected to do so for coming year. So, just imagine how many potential victims are there! So, i suggest our government should take a quick action to address the issues and resolved it in timely manner.
Is It Possible to Re-submit Your Income Tax Form Through e-Filing?
Many people still do not know clearly about the income tax for the assessment year 2009. Some of them was asking that why personal relief did not increased from RM8,000 to RM9,000 which is under Budget 2010.
Besides that, most of the people will confuse and asked why we do not have tax relief for the Internet broadband subscription, which was announced by our government in the beginning of the year under Budget 2010.
To make the clarification, I would like to re-emphasize that those relief supposed to be given for the year of assessment 2010. In the other words, LHDN Malaysia will have some changes on personal income tax for next year income tax filing. It concludes that our government is actually working towards recovery of our country economic by reducing the tax rates. This is also welcome message to Malaysian as we are facing a tough time following the economic downturn in year 2008.
Income Tax For the Year of Assessment 2010
