Malaysia Personal Income Tax YA 2024: A Comprehensive Guide

Malaysia Personal Income Tax A Comprehensive Guide Featured Image

Published: 18 April 2025

Introduction

Malaysia’s personal income tax system is regulated by the Inland Revenue Board of Malaysia (LHDN). Understanding how income tax works can help individuals comply with tax regulations while optimizing deductions and reliefs to reduce their tax burden. This guide covers essential aspects of personal income tax in Malaysia, including tax residency, rates, taxable income, deductions, and filing requirements.

Tax Residency & Rates

1. Tax Resident

An individual is considered a tax resident in Malaysia if they meet any of the following criteria within a calendar year:

Stay in Malaysia for at least 182 days.
Stay for less than 182 days but linked by or to another period of at least 182 consecutive days in the preceding year or immediately following year.
Stay for at least 90 days and were a tax resident in Malaysia in at least three of the past four years.
Have been a tax resident in Malaysia in the 3 immediately preceding years and will be a tax resident in Malaysia in the immediately following year.

Personal Income Tax Rates YA 2024

For residents, the progressive tax rates are as follows:

Chargeable Income (RM)	Calculations (RM)	Tax Rate (%)	Tax (RM)
0 – 5,000	On the First 5,000	0%	0
5,000 – 20,000	On the First 5,000 Next 15,000	1%	0 150
20,001 – 35,000	On the First 20,000 Next 15,000	3%	150 450
35,001 – 50,000	On the First 35,000 Next 15,000	6%	600 900
50,001 – 70,000	On the First 50,000 Next 20,000	11%	1,500 2,200
70,001 – 100,000	On the First 70,000 Next 30,000	19%	3,700 5,700
100,001 – 400,000	On the First 100,000 Next 300,000	25%	9,400 75,000
400,001 – 600,000	On the First 400,000 Next 200,000	26%	84,400 52,000
600,001 – 2,000,000	On the First 600,000 Next 1,400,000	28%	136,400 392,000
Exceeding 2,000,000	On the First 2,000,000 Next remaining ringgit	30%	528,400 ∞

2. Non- Resident

An Individual is considered a non-resident under Malaysian tax law if you not fulfill the conditions of the days stay in Malaysia as mentioned in point 1, regardless of your citizenship or nationality.

Non-resident individuals are subject to a flat tax rate of **30%** on all income earned or received in Malaysia. This includes income from business, employment, dividends, and rental income.

Taxable & Non-Taxable Income

Taxable Income Sources

The following types of income are subject to taxation in Malaysia:

Employment income (salaries, bonuses, allowances)
Business profits (self-employed, freelancers)
Rental income from properties
Dividends and interest (except exempted investments)
Pension and annuities (unless specifically exempted)

Non-Taxable Income

Certain types of income are not subject to tax, including:

Foreign-sourced income (subject to fulfillment of exemption conditions)
Inheritance and gifts
Compensation for loss of employment (subject to conditions)

Tax Deductions, Reliefs & Rebates

To reduce taxable income, taxpayers can claim deductions and reliefs. Here are some common tax reliefs for YA 2024:

Tax Reliefs

No	Category	Relief Amount (RM)
1	Self and dependent	9,000
2	Disable Individual	6,000
3	Disabled husband/wife	5,000
4	Husband / wife/ payment of alimony to former wife	4,000*
5	Education fees (Self) [including course of study undertaken to upskill or self-enhancement that is restricted to RM2,000]	7,000*
6	Purchase of breastfeeding equipment (once every 2 YAs)	1,000*
7	Lifestyle (self/spouse/child): Purchase of reading materials including e-newspaper, computer, smartphone or table, internet subscription, and self-enhancement courses	2,500*
8	Additional Lifestyle (self/spouse/child): Purchase of sports equipment, rental or entrance fee to any sports facility, competition fees, gym membership, or sports training	1,000*
9	Expenses on EV charging facilities (Not for business use) (effective YA 2024 - 2027)	2,500*
10	Medical expenses (self/spouse/child)	10,000*
11	Medical expenses for parents (including the complete medical examination that is restricted to RM1,000)	8,000*
12	Purchase of basic supporting equipment for (disabled self, spouse, child or parent)	6,000*
13	Children relief: a. Unmarried child < 18 years old	2,000 per child
	b. Unmarried child ≥ 18 years old Receiving full-time education (A-Level, certificate, pre-university program, or preparatory courses)	2,000 per child

	c. Unmarried child ≥18 years old: Receiving full-time education: In Malaysia: For diploma or higher (excluding matriculation/preparatory courses) Outside Malaysia: For degree or higher education Must be from a government-approved institution	8,000 per child

	d. Unmarried disabled child	6,000 per child

	e. Unmarried disabled child ≥ 18 years old: Receiving full-time education: In Malaysia: Pursuing a diploma or higher Outside Malaysia: Pursuing a bachelor’s degree or higher Must be enrolled in a government-approved institution	Additional 8,000 per child
14	Childcare fees paid to childcare centre or kindergarten for a child aged 6 and below	3,000*
15	Life insurance premium and EPF: EPF (Restricted to RM4,000) Including voluntary EPF contributions for self-employed individuals and civil servants under the pension scheme. Life Insurance (Restricted to RM3,000)	7,000*
16	Net deposit in Skim Simpanan Pendidikan Nasional (SSPN) for child (Total deposit minus total withdrawal in YA)	8,000*
17	Insurance premiums for education and medical (self/spouse/child)	3,000*
18	Contribution of SOCSO or EIS	350*
19	Deferred Annuity and Private Retirement Scheme (Until YA 2025)	3,000*

Note: Amounts with asterisks (*) indicate maximum relief limits applicable for YA 2024.

Tax Rebates

Taxpayers may be eligible for the following rebates:

Taxable income below RM35,000: Rebate of RM400
Zakat/Tithe payments: Rebate up to the total amount paid

Filing & Payment Process

How to File Your Income Tax?

Register for a tax file via MyTax (LHDN’s e-filing system).
Select the appropriate tax form:
- Form BE - For individuals with non-business income
- Form B - For individuals with business income
Declare all sources of income and claim eligible deductions and reliefs.
Ensure submission before the deadline:
- April 30 - For individuals without business income
- June 30 - For individuals with business income

Penalties

Late filing (without reasonable excuse):
- a fine of not less than RM200 and not more than RM20,000 or to imprisonment for a term not exceeding 6 months or to both; or
- a penalty up to 3 times the amount of tax owed. In practice, the following penalty rates may be imposed:
  
  Delay Period Penalty Rate (%)
  
  Up to 12 months 15
  
  More than 12 months up to 24 months 30
  
  More than 24 months 45
  
  Source: Operation Guideline No. 3/2020 (GPHDN 2/2020) issued by the LHDN on 13 August 2020
Late payment of tax: A 10% penalty is applied to unpaid taxes.
Under-declared income: A penalty may be imposed, which is equal to the tax undercharged (100%). In practice, the LHDN may impose a penalty of up to 45% (depending on the number of offences) on the additional tax payable. (Source: Tax Audit Framework issued by the LHDN on 1 May 2022)

Delay Period	Penalty Rate (%)
Up to 12 months	15
More than 12 months up to 24 months	30
More than 24 months	45

Tax Planning Tips

Keep detailed records of income, expenses, and receipts.
Maximize tax reliefs by utilizing all eligible deductions.
Consider contributing to EPF, PRS, and Life Insurance to reduce taxable income.
File taxes early to avoid last-minute errors and penalties.

Understanding Malaysia’s personal income tax system can help individuals manage their taxes effectively and avoid unnecessary penalties. Staying informed about tax reliefs and deductions can significantly reduce your taxable income. Always ensure timely filing and consider consulting a tax professional  for personalized advice.

For more information, visit the LHDN official website at www.hasil.gov.my

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