📃Income Tax in Year 2020
As the new year is approaching, it is time to look into our income tax and study on the structure to understand the new proposed taxable income. In our recent Budget 2020, the government has introduced a new band for taxable income above RM 2 million and taxed a 30%, which is a 2% increase from the current 28% rate.
The reason behind the increment is to ensure a more progressive personal income tax structure, according to our Formal Finance Minister, Lim Guan Eng. Approximately 2000 top income earners in the country will be affected by the increment. While this is resulting in a healthy increase in tax revenue, our government is collecting significantly lower taxes, if compared to some other countries.
And now, your income tax 2020 is approaching, which means you’ll need to get ready to file your taxes from 2019. First thing first, you will need to be an individual earning more than RM34,000 per annum after EPF deductions to be eligible to register as a taxpayer. You must pay income tax on all types of income, including income from your business, employment, rent, dividends, and others. For salaried employees, this includes not only your monthly salary, but also bonuses, overtime, commissions, and all other taxable income.
After confirming you’re one of the above, get your EA form from your employer. Figure out your income tax rate, add up your tax reliefs, and calculate your tax refund. Don’t worry, and there is a lot of tax calculator you can find online to help you with that. Don’t forget to register yourself as a taxpayer, then log yourself into e-Daftar to fill in the e-Borang. With just a click, your tax will be filed and stored online, easy-peasy.
💡 Tips: Do you know being a healthy income tax payer will help you to increase the chances of approving your house buying loan?