It’s that time of the year again, no not a festive season, but income-tax season! Filling up income tax forms can be truly taxing for some people. There are many stories of people forgetting to declare income tax or even purposely avoiding it. The deadline for employed individuals is April 30 and for sole proprietor or business partners, the deadline is June 30. Here are a few simple steps to note:
• Don’t miss out important facts
Many people blindly fill out their income tax forms without taking into consideration that they are eligible for certain deductions. On the other hand, there are others who intentionally leave out taxable income to avoid being taxed on their actual income. Declare the correct amount or claim the correct deductions when completing your income tax forms. For salaried employees, check your EA forms for the correct figures, don’t forget to include deductions for purchases that are tax deductible such as computers, books, medical equipment, insurance, etc. Be sure to keep your receipts for these purchases for seven years in case you are called for an audit.
• Don’t delay filing your income tax
Filing your income tax early or on time not only avoids future problems but also helps you avoid being slapped with a fine or penalty. Do take note that the penalty for late submissions is between 20% and 35%. According to tax consultants, an individual is liable to a fine of not less than RM200 and not more than RM2,000 or imprisonment for a term not exceeding six months, or both, for late submission of tax returns.
• Keep records
Be sure to keep records of income tax forms filed over the years and your receipts for deductions. Remember, that you are required to keep your supporting records for at least seven years.
• Seek professional help
Seek professional help from tax consultants or somebody who is knowledgeable about income tax if you are in a fix. Running down to the income tax department will also help you to get more accurate information and to clear any issues you may have.
Just for your knowledge, types of chargeable income include the following:
• Gains or profits from a business for whatever period of time carried on.
• Gains or profit from an employment.
• Dividends, interests or discounts.
• Rents, royalties or premiums.
• Pensions, annuities or other periodical payments
• Special classes of income
Remember, undeclared income tax can come back and haunt you in later years. Once accumulated, unpaid or undeclared income tax can cost you a considerable amount of money in later years. Take a little time and make some effort to clear your taxes, after all it is just a once-a-year affair. For further clarification on income tax, visit www.hasil.gov.my.
By Christina Thomas
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