Exclusive Guide!

The Complete Guide To Personal Income Tax In Malaysia For 2023

All you need to know for filing your personal income tax in Malaysia by April 30 this year.

Chapter 6

Here’s How A Tax Rebate Can Help You Reduce Your Tax Further

claim tax rebate

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Most people confuse income tax rebate with income tax relief. The difference between the two is: a tax relief is deduction from the total income to derive your chargeable income, whereas tax rebate is deducted from the actual taxed amount.

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Here’s an example of how Malaysia income tax rebate is calculated:

Chargeable income after tax reliefsRM34,610
Total taxRM880.50
As the chargeable income is less than RM35,000, this married taxpayer is eligible for an additional RM400 tax rebate
Total tax after tax rebate = RM880.50 – RM400
= RM480.50

There are the types of tax rebates available:

  1. Individual for chargeable income less until RM35,000
  2. Wife/Husband (separate assessment) can each get a tax rebate of RM400 if both have chargeable income of less than RM35,000
  3. Wife/Husband (joint assessment) can get a tax rebate of RM800 for joint income until RM35,000
  4. Zakat/Fitrah, which is subject to the maximum of tax charged

Zakat or tithe is a compulsory payment for all Muslim around the world, hence, the zakat is applicable only to Muslim taxpayers. It is a compulsory payment for charity and can be calculated via the Muslim taxpayer’s acquired wealth or income.

Zakat is collected to assist the less fortunate, where the fund will be distributed to different channels and handed to those who need it most.

Muslims in Malaysia could serve jail time or be forced to pay a hefty fine if they are found to skip their zakat payment on purpose (Shariah Criminal Enactment Law).

The zakat tax rebate allows Muslims to not be required to pay two overlapping compulsory payments each year.

Too much math for you?
Go on to the Malaysia income tax calculator to calculate how much tax you will have to pay!

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