Income That Needs To Be Taxed
Income That Needs To Be Taxed

Income That Needs To Be Taxed

Last Updated on Tuesday, 18 May 2021 by Zhen Thing

When it comes to income tax, many people will only think about salary-earners. What about other professions like entrepreneurs, commission-earners, and investors? This article will inform you which income are taxable and which are non-taxable.

Table of contents :
💼 Minimum Taxable Annual Income to Declare
💼 Earnings from trading investments
💼 Winnings from a lottery
💼 Rental income
💼 How to declare your rental income?

Minimum Taxable Annual Income to Declare

You need to declare your income under either one of these circumstances:

  1. Nett income of RM34,000 and above. After deducting EPF (Employees’ Provident Fund) from your gross income.
  2. Reside in Malaysia for at least 182 days in any tax year.

As a matter of fact, once an employee reaches a certain salary income, the employer will automatically deduct PCB (Potongan Cukai Bulanan) from your salary to pay your income tax. It means your employer will withhold the required amount of tax every month and submit it to the tax authorities.

(LHDN‘s deadlines for income declaration are 30 April for BE forms, and 30 June for B forms and P forms.)

Earnings from trading investments

Let’s talk about the earnings from stock trading, forex trading, and other types of trading investments. Are they income taxable?

The answer is no because earnings from trading investments aren’t considered income. It is your investment returns and not your income. In addition, if a person regularly trades as his profession, these returns may consider as “income” by the government.

Winnings from a lottery

Are the winnings from a lottery income taxable?

Also, no, because the winnings are your capital gains and not your income. Apart from that, there are many details that you need to take note of when declaring your income tax. Always double-check your declaration carefully before submission. Once you are deemed a “false income declaration” by the government, you may face penalty charges.

Rental income

Yes, any forms of earnings through rental is an income and is taxable.

How to declare your rental income?

Before declaring your rental income, some expenses are tax-deductible such as house tax (cukai rumah), land tax (cukai tanah), home loan interest, fire insurance, and renovation expenses.

How to calculate your nett rental income:

Monthly rental × tenancy (e.g. 12 months) – expenses (e.g. house tax, land tax, renovation) = Nett rental income

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