(Tax Update) Don’t Let These Common Personal Tax Mistakes Cost You (Again)

(Tax Update) Don’t Let These Common Personal Tax Mistakes Cost You (Again)

Every year, many Malaysians file their personal income tax without realising they’ve made avoidable mistakes.

As a licensed tax agent in Malaysia, I’ve seen too many taxpayers repeat the same errors — sometimes out of habit, sometimes due to confusion.

Let’s break down the most common personal tax mistakes without jargon, so you can avoid getting into trouble with LHDN.

1. Using the Wrong EA Form or Not Updating Your Details

Yes, it starts with the basics. Some taxpayers use the wrong year’s EA form, especially when employers issue them late. Others forget to update their:

  • Bank account for refunds

  • Marital status

  • Employer information

  • Assessment type (individual vs. joint)

These small errors may delay your refund or trigger unnecessary queries from LHDN.

2. Ignoring or Misusing Tax Reliefs

There are over 20 personal tax reliefs available — but many taxpayers either:

  • Don’t claim what they’re eligible for (e.g. lifestyle, medical insurance, EPF + SOCSO)

  • Claim what they’re not eligible for (e.g. children’s expenses when spouse already claimed)

  • Use wrong codes or exceed the limits

The result? You may overpay tax — or worse, face penalties for wrongful claims.

3. Not Keeping Receipts or Supporting Documents

Under Malaysian tax law, you must keep your receipts and supporting documents for at least 7 years. If LHDN selects you for an audit, and you can’t produce the proof, you may be fined or even charged.

Receipts for donations, medical bills, or insurance premiums — keep them in a proper file or digital folder.

4. Forgetting to Submit the e-Filing

Sounds silly, but it happens. Many people fill in the form on MyTax, think it’s done… but never hit the “submit” button. No submission = late filing = automatic penalty.

Always check for your e-filing acknowledgement receipt. That’s your official proof of filing.

5. Not Paying Tax Balance on Time

Even if you file your return correctly, you can still be fined for not paying on time. The tax payment deadline is 30 April for individuals and 30 June for business income (Form B).

If you miss it, LHDN imposes a 10% penalty, and another 5% if you continue delaying.

6. Assuming Employer-Paid Tax is Not Your Problem

If your employer pays part of your personal tax under a remuneration package, that amount is still taxable income to you.

Also, employers cannot claim that payment as a tax-deductible expense — it’s a private cost.

Failing to report this correctly could create compliance problems for both sides.

7. Copying Last Year’s Numbers Without Checking

Another habit: copying figures from last year’s tax form just to save time.

But tax relief limits change. Laws change. Your life situation changes. Copy-pasting without checking is a fast way to file incorrect returns.

8. Waiting Until the Last Minute

Leave your filing to the final week, and you’re more likely to make mistakes — especially if MyTax is lagging or your EA form isn’t complete.

Early filers enjoy:

  • Peace of mind

  • Time to amend errors

  • Faster refunds

9. Misunderstanding Tax Agent or Accountant Roles

If you rely on someone to file for you, remember: you are still legally responsible. Always review your return before submission. Don’t blindly sign.

Also, make sure your preparer is qualified. If something goes wrong, you’re the one LHDN will come after.

10. Missing Out Income

Omitting or understating taxable income — especially:

  • Rental income (yes, even from one small unit)

  • Dividends (local and foreign)

  • Royalties or freelance earnings (side hustles count too)

LHDN has access to third-party data, including banks, EPF, and even property transactions. If you miss out income, it could trigger an audit — and lead to fines for under-reporting.

Also double-check:

  • Income figures

  • Tax reliefs claimed

  • IC number, bank account, employer info

Final Thoughts

Personal tax filing doesn’t need to be scary — just follow these simple rules:

✅ Keep your records
✅ Understand your reliefs
✅ File and pay on time
✅ Don’t take shortcuts

If in doubt, ask a qualified tax agent. Don’t rely on WhatsApp groups or hearsay.

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