As a taxpayer in Malaysia, there is a possibility that you may be entitled to claim your income tax refund. Many people tend to overlook this opportunity to get back the money that’s rightfully theirs. You should not make this same mistake because getting your tax refunds could really improve your financial situation such as improve your cash flow, reduce your tax burden, and even make investments. Hence, it’s important to know your rights and understand the process of claiming your refund.
Income Tax Refund Malaysia: The Ultimate Guide on How to Claim Income Tax Refund Malaysia
Tax relief and tax refund are not the same thing. Tax relief is a deduction from the taxable income, which reduces the amount of income that is subject to tax. On the other hand, a tax refund is a reimbursement of excess tax paid to LHDN by a taxpayer.
If you realize that you’ve overpaid your taxes when filing, don’t fret because you can receive a tax return or tax refund for the extra taxes you’ve paid. To ensure that you’re eligible for an income tax refund, it’s crucial that you keep precise records of your income, deductions, and tax payments. This way, you can have peace of mind knowing that you won’t miss out on any potential tax refunds.
1. Overpaid Tax Balance Malaysia: What Is Tax Refund?
An income tax refund is a repayment of taxes that have been paid by a taxpayer in excess of what is required by law. This can happen when a taxpayer has overpaid their taxes or has claimed too many deductions or tax credits. In Malaysia, taxpayers may be eligible for a tax refund if they have paid more taxes than they are required to pay. The refund is typically processed after the tax assessment is completed, which is usually done after the end of the tax year.
One common scenario where taxpayers may be eligible for an income tax refund in Malaysia is when they are subjected to Monthly Tax Deduction (MTD) and the monthly deduction does not include additional tax reliefs or unplanned expenses.
For instance, if a taxpayer purchases approved items like books or a personal computer, or has medical expenses for a serious illness, they may be entitled to claim additional tax reliefs that were not accounted for in their monthly MTD. As a result, they may have overpaid their taxes and be eligible for a tax refund.
2. When Can You Claim LHDN Tax Refund, How Long Does It Take for LHDN to Refund?
If you are eligible for a tax refund, you need to complete the tax form and attach the necessary supporting documents to claim the refund. Income tax refunds are typically paid out through bank transfers or cheques, and you can choose to have your tax refunds deposited directly into their bank accounts or receive a cheque by mail.
You might be wondering “LHDN refund how long?” or “how many days LHDN refund?”. The LHDN Client’s Charter sets that tax refund will be processed:
- Within 30 working days after e-Filing submission for Borang Nyata (Income Tax Return Form) through e-Filing;
- Within 90 working days after manual submission for Borang Nyata sent via post or by hand.;
It should be noted that the income tax refund process is dependent on the information provided in the Income Tax Return Form (ITRF) and the submission of any necessary supporting documents for review, if required.
3. How to Claim Tax Refund in Malaysia?
If you have found yourself eligible for a tax refund, the next step is to know how to claim your refund. Here’s a step-by-step guide on how to claim income tax refund in Malaysia:
Determine Your Eligibility
The first step in claiming your income tax refund is to determine if you are eligible. You can claim a refund if you have paid more taxes than you are required to pay or if you have claimed too many deductions or tax credits.
File Your Tax Return
To claim your refund, you need to file your tax return by April 30th of the following year. You can file your tax return online through the e-Filing system or by submitting a physical copy of the Borang Nyata form.
Attach Supporting Documents
If you are claiming additional tax reliefs, such as for medical expenses or the purchase of approved items like books or a personal computer, you need to attach supporting documents with your tax return.
Wait for Assessment
After you have submitted your tax return, LHDN will assess your return to determine if you are eligible for a tax refund.
Receive Your Tax Refund
If you are eligible for income tax refund, it will typically be processed within 30 to 90 days after the assessment is completed. The refund will be paid out through bank transfers or cheques, and you can choose to have it deposited directly into your bank account or receive a cheque by mail.
Claiming your income tax refund in Malaysia can be a straightforward process. By following these steps, you can claim your tax refund in Malaysia hassle-free without any complications.
4. Income Tax Refund Status Malaysia, How to Check Tax Refund Status LHDN?
If you have filed your tax return in Malaysia and are waiting for your tax refund, you may be wondering how to check its status. Here’s a step-by-step guide on how to check your tax refund status with the Inland Revenue Board of Malaysia (LHDN):
- Visit the LHDN website: Go to the LHDN website at https://www.hasil.gov.my/ and click on “e-Filing Login” located at the top right corner of the homepage.
- Log in to your e-Filing account: Enter your login credentials, including your user ID and password, to access your e-Filing account.
- Check your refund status: Once you are logged in, you can check the status of your income tax refund by clicking on “Refund Status” under the “Services” tab.
- Enter your details: You will need to enter your tax reference number and your identification number to check your refund status.
- View your refund status: After entering your details, you will be able to view the status of your tax refund. If your refund has been processed, you can also view the payment details, including the date and amount of the refund.
If you prefer to check your tax refund status by phone, you can call the LHDN customer service hotline at 1-800-88-5436. Make sure to have your tax reference number and identification number ready when you call. By following these steps, you can easily check the status of your tax refund with LHDN and stay up-to-date on the progress of your refund.
5. Malaysia Tax Refund: What Else Should You Be Aware Of?
During e-filing, you will be able to know how much income tax refund you will receive. However, there is a possibility of late refund. To avoid such delays, here are three tips to follow:
- Ensure that all information is updated during e-filing. Important information required to speed up the process of tax refund include bank account number, mailing address, phone number, email address, and company registration number (for corporate taxpayers);
- Do not provide incorrect or false information regarding tax exemptions as this may lead to an audit by LHDN. For example, if claiming tax exemption for SSPN, only claim the net amount contributed rather than the total amount deposited;
- Declare all types of income received, such as rental income or investment returns. Do not leave them out during e-filing. Usually, LHDN has access to this information and failure to report may result in you receiving heavy penalties from LHDN.
If after 30 working days, you have not received your income tax refund, you can fill in the Customer Feedback Form at or contact the Hasil Care Line at 03-89111000.
You should also stay alert and beware of LHDN scam calls. During tax season, many taxpayers in Malaysia become vulnerable to scams syndicates targeting their finances. These scammers often pose as LHDN officers and attempt to intimidate their victims by threatening legal action or arrest for alleged unpaid taxes.
It’s important to note that LHDN does not make unsolicited phone calls or send emails requesting personal information. If you receive a call or email from someone claiming to be from LHDN, do not panic and follow these steps:
Verify the Identity of the Caller
Ask the person to provide their full name, designation, and contact information. You can also ask for their LHDN identification number or employee number. If you have any doubts, ask for a callback number and contact LHDN directly to verify the caller’s identity.
Do Not Disclose Personal Information
LHDN will never ask you for any personal information, such as your IC number, bank account details, or credit card information over the phone or email.
Be Cautious of Intimidation
Scammers may use threats or intimidation tactics to pressure you into providing personal information or making a payment. Remember that LHDN will never threaten you with arrest or legal action over the phone or email.
Report the Incident
If you suspect that you have received a fraudulent call or email, report the incident to LHDN immediately. You can also contact the Malaysian Communications and Multimedia Commission (MCMC) to report the incident.
LHDN Refund, Make Sure You Claim Your Overpaid Income Tax Refund Malaysia 2023
By understanding the income tax refund process in Malaysia and staying up-to-date with any changes or updates, taxpayers can ensure that they receive the maximum refund to which they are entitled and can enjoy greater peace of mind when it comes to their taxes.
While tax refunds can provide a welcome financial boost, it is important to remember that they are not a windfall but rather a reimbursement of taxes that you have overpaid or paid in error. As such, it is important to use your tax refund wisely and to prioritize any outstanding debts or financial goals.
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