Malaysia Personal Income Tax YA 2024/2025: A Comprehensive Guide

Malaysia Personal Income Tax A Comprehensive Guide Featured Image

Updated: 23 July 2025

Introduction

Malaysia’s personal income tax system is regulated by the Inland Revenue Board of Malaysia (LHDN). Understanding how income tax works can help individuals comply with tax regulations while optimizing deductions and reliefs to reduce their tax burden. This guide covers essential aspects of personal income tax in Malaysia, including tax residency, rates, taxable income, deductions, and filing requirements.

Tax Residency & Rates

1. Tax Resident

An individual is considered a tax resident in Malaysia if they meet any of the following criteria within a calendar year:

Stay in Malaysia for at least 182 days.
Stay for less than 182 days but linked by or to another period of at least 182 consecutive days in the preceding year or immediately following year.
Stay for at least 90 days and were a tax resident in Malaysia in at least three of the past four years.
Have been a tax resident in Malaysia in the 3 immediately preceding years and will be a tax resident in Malaysia in the immediately following year.

Personal Income Tax Rates YA 2024/2025

For residents, the progressive tax rates are as follows:

Chargeable Income (RM)	Calculations (RM)	Tax Rate (%)	Tax (RM)
0 – 5,000	On the First 5,000	0%	0
5,000 – 20,000	On the First 5,000 Next 15,000	1%	0 150
20,001 – 35,000	On the First 20,000 Next 15,000	3%	150 450
35,001 – 50,000	On the First 35,000 Next 15,000	6%	600 900
50,001 – 70,000	On the First 50,000 Next 20,000	11%	1,500 2,200
70,001 – 100,000	On the First 70,000 Next 30,000	19%	3,700 5,700
100,001 – 400,000	On the First 100,000 Next 300,000	25%	9,400 75,000
400,001 – 600,000	On the First 400,000 Next 200,000	26%	84,400 52,000
600,001 – 2,000,000	On the First 600,000 Next 1,400,000	28%	136,400 392,000
Exceeding 2,000,000	On the First 2,000,000 Next remaining ringgit	30%	528,400 ∞

2. Non- Resident

An Individual is considered a non-resident under Malaysian tax law if you not fulfill the conditions of the days stay in Malaysia as mentioned in point 1, regardless of your citizenship or nationality.

Non-resident individuals are subject to a flat tax rate of 30% on all income earned or received in Malaysia. This includes income from business, employment, dividends, and rental income.

Taxable & Non-Taxable Income

Taxable Income Sources

The following types of income are subject to taxation in Malaysia:

Employment income (salaries, bonuses, allowances)
Business profits (self-employed, freelancers)
Rental income from properties
Dividends and interest (except exempted investments)
Pension and annuities (unless specifically exempted)

Non-Taxable Income

Certain types of income are not subject to tax, including:

Foreign-sourced income (subject to fulfillment of exemption conditions)
Inheritance and gifts
Compensation for loss of employment (subject to conditions)

Tax Deductions, Reliefs & Rebates

To reduce taxable income, taxpayers can claim deductions and reliefs. Here are some common tax reliefs for YA 2024/2025:

Tax Reliefs

No	Category	Relief Amount (RM)
1	Individual and Dependent Relief of RM9,000 for an individual in respect of himself and his dependent relatives is granted automatically.	9,000
2	Disable Individual (increase to RM7,000 w.e.f. YA 2025) Additional relief for taxpayers with disabilities. An individual is eligible to claim this deduction if he is certified in writing by the Department of Social Welfare (DSW) as a disabled	6,000
3	Disable Spouse (increase to RM6,000 w.e.f. YA 2025) Additional relief for taxpayers with disabled husband / wife. Where the disabled spouse is living together with the taxpayer and has no total income or chooses joint assessment, the taxpayer is entitled to claim a further deduction.	5,000
4	Husband / wife/ payment of alimony to former wife Husband/Wife Deduction: A wife can claim RM4,000 for her husband if he has no income or elects for joint assessment under her name. A husband can claim RM4,000 for his wife if she has no income or elects for joint assessment under his name. Only one wife is eligible for this deduction, regardless of the number of wives. Since YA 2017, this deduction is not allowed if the spouse (who is not disabled) earns more than RM4,000 from foreign sources. Alimony to Former Wife: Deduction is limited to RM4,000 or the actual amount paid, whichever is lower. The total deduction for both a current wife and alimony payments cannot exceed RM4,000. Voluntary alimony payments without a formal agreement do not qualify for deduction.	4,000
5	Education fees (Self) Tertiary-level studies in law, accounting, Islamic finance (approved by Bank Negara Malaysia or Securities Commission), and technical, vocational, industrial, scientific, or technological fields. Any skill or qualification acquired in any institution or professional body in Malaysia recognized by the Malaysian Government or approved by the Minister of Finance. Relief expended to cover fees for any course of study undertaken for the purpose of up-skilling and self-enhancement recognised by the Director General of Skills Development under the National Skills Development Act 2006 [Act 652]. The tax relief is limited to RM2,000 and it has been extended to YA 2026.	7,000
6	Purchase of breastfeeding equipment This deduction is allowed exclusively for woman taxpayers, provided that the individual is a breastfeeding mother. Available to breastfeeding mothers who purchase breastfeeding equipment for their own use to nurse their child aged 2 years and below. This deduction can be claimed once every two years of assessment.	1,000
7	Lifestyle Relief Expenses incurred for purchasing reading materials (including e-newspapers), computer, smartphone or tablet (excluding additional warranty fees), internet subscription (under personal name), and self-improvement courses (such as language, photography, sewing, etc.).	2,500
8	Additional Lifestyle Relief Expenses for purchasing sports equipment, rental or entrance fees for sports facilities, sports competition registration fees, gym membership fees, or sports training	1,000
9	Expenses on EV charging facilities (w.e.f YA 2024 to YA 2027) A deduction limited to a maximum of RM2,500 for expenses incurred on the installation, rental, purchase (including hire-purchase of electric vehicle charging facility, and subscription fees of EV charging facilities. [not for business use]	2,500
10	Medical Expenses Relief Serious Diseases (self, spouse or child) Covers medical expenses for serious diseases including the treatment of Acquired Immune Deficiency Syndrome (AIDS), Parkinson’s disease, cancer, renal failure, leukaemia, and other similar diseases. Amount expended on own self, husband / wife / child is deductible up to maximum of RM10,000. Fertility treatment for self or spouse Expenses for fertility treatment include Intrauterine Insemination (IUI) treatment, In vitro fertilization (IVF) or any other fertility treatments including consultation fees and medicines on yourself or your spouse. Deductions of up to RM10,000 are allowed on the amount expended or deemed to be expended on fertility treatment for yourself or your spouse. Vaccination (Restricted to RM1,000) Covers vaccinations expenses included Pneumococcal, Human Papillomavirus (HPV), Varicella, Rotavirus, Influenza, Coronavirus Disease 2019 (COVID-19), Combination of tetanus-diptheria-acellular-pertusia (Tdap), Meningococcal for self, spouse, or child. Dental examination and treatment (Restricted to RM1,000) Dental examination and treatment expenses are limited to a maximum of RM1,000 for self, spouse, or child. Medical examination expenses (Restricted to RM1,000) Complete Medical Examination Expenses incurred for complete medical examinations for self, spouse, or children. COVID-19 Detection Test COVID-19 detection test fees (clinic/hospital) and self-test kit purchases. Mental Health Examination or Consultation Covers mental health examination or consultation for self, spouse, or child. Diagnostic Disability Assessment and Treatment for children aged 18 and below (Restricted to RM4,000) (w.e.f. YA 2025, restricted to RM6,000) Intervention expenditure for Autism, Attention Deficit Hyperactivity Disorder (ADHD), Global Developmental Delay (GDD), Intellectual Disability, Down Syndrome, and Specific Learning Disabilities. Expenses diagnostic assessment of learning disability, early intervention programs, or rehabilitation treatments.	10,000
11	Medical expenses for parents (w.e.f. YA 2025, include grandparents) Covers medical treatment, dental treatment, complete medical examination (w.e.f. YA 2025, including vaccination) (restricted to RM1,000), special needs, or carer expenses for parents, provided these are certified by a medical practitioner.	8,000
12	Purchase of Basic Supporting Equipment For the purchase of basic supporting equipment for the use of self, spouse, children, or parents who are disabled.	6,000
13	Children relief: a. Unmarried Child < 18 Years Old A deduction of RM2,000 per child is allowed if the child is unmarried and who at any time in the basis year is below the age 18 years.	2,000
	b. Unmarried Child ≥ 18 Years Old For children receiving full-time education (A-Level, certificate, pre-university program, or preparatory courses).	2,000

	c. Unmarried Child ≥18 Years Old Receiving full-time instruction of higher education of diploma level and above in Malaysia, or degree level and above outside Malaysia.	8,000

	d. Unmarried disabled child (increase to RM 8,000 w.e.f. YA 2025)	6,000

	e. Disabled child pursuing higher education / Disabled child aged 18 and above enrolled in a full-time professional diploma or higher degree program	14,000
14	Childcare fees (extended to YA 2027) For fees paid to registered childcare centers and kindergartens for children aged 6 years and below. If assessed separately, only the spouse who incurs the expenses can claim the deduction, while divorced spouses can each claim it if they pay for different children.	3,000
15	Life Insurance Premiums and EPF Combined relief for life insurance premiums and contributions to the Employees Provident Fund (EPF). EPF (Restricted to RM4,000) Self-employed under the definition of Employees Provident Fund Act 1991 (Act 452) Pensionable officers under definition of section 2 of Pension Act 1980 (Act 227) and Life Insurance (Restricted to RM3,000)	7,000
16	Net Deposits in Skim Simpanan Pendidikan Nasional (SSPN) for child (extended to YA 2027, claimable by either parent) For net savings deposited into the National Education Savings Scheme (SSPN).	8,000
17	Insurance Premiums for Education and Medical (increase to RM4,000 effective YA 2025) For insurance premiums related to education or medical benefits for self, spouse, or child.	3,000
18	SOCSO & EIS Contributions For contributions made to the Social Security Organization (SOCSO) and Employment Insurance System (EIS).	350
19	Deferred Annuity & Private Retirement Scheme (PRS)(extended to YA 2030) For contributions to approved deferred annuity plans and the Private Retirement Scheme (PRS) to encourage long-term retirement savings.	3,000
20	Housing Loan Interest (effective YA 2025 – 2027) Tax relief for first time homebuyer to housing loan interest paid on a residential property for the first 3 consecutive years of assessment (YA), based on the property value upon SPN: RM500,000 & below: Up to RM7,000 per year RM500,000 – RM750,000: Up to RM5,000 per year Applicable for properties purchased between 1 January 2025 – 31 December 2027 (based on Sale & Purchase Agreement date).	5,000/7,000

Note: Tax reliefs may change based on government policies. For the most accurate and up-to-date information, refer to the latest guidelines from the Inland Revenue Board of Malaysia (LHDN)

Tax Rebates

Taxpayers may be eligible for the following rebates:

Taxable income below RM 35,000: Rebate of RM 400
Zakat/Tithe payments: Rebate up to the total amount paid

Filing & Payment Process

How to File Your Income Tax?

Register for a tax file via MyTax (LHDN’s e-filing system).
Select the appropriate tax form:
- Form BE - For individuals with non-business income
- Form B - For individuals with business income
Declare all sources of income and claim eligible deductions and reliefs.
Ensure submission before the deadline:
- April 30 - For individuals without business income
- June 30 - For individuals with business income

Penalties

Late filing (without reasonable excuse):
- a fine of not less than RM200 and not more than RM20,000 or to imprisonment for a term not exceeding 6 months or to both; or
- a penalty up to 3 times the amount of tax owed. In practice, the following penalty rates may be imposed:
  
  Delay Period Penalty Rate (%)
  
  Up to 12 months 15
  
  More than 12 months up to 24 months 30
  
  More than 24 months 45
  
  Source: Operation Guideline No. 3/2020 (GPHDN 2/2020) issued by the LHDN on 13 August 2020
Late payment of tax: A 10% penalty is applied to unpaid taxes.
Under-declared income: A penalty may be imposed, which is equal to the tax undercharged (100%). In practice, the LHDN may impose a penalty of up to 45% (depending on the number of offences) on the additional tax payable. (Source: Tax Audit Framework issued by the LHDN on 1 May 2022)

Delay Period	Penalty Rate (%)
Up to 12 months	15
More than 12 months up to 24 months	30
More than 24 months	45

Tax Planning Tips

Keep detailed records of income, expenses, and receipts.
Maximize tax reliefs by utilizing all eligible deductions.
Consider contributing to EPF, PRS, and Life Insurance to reduce taxable income.
File taxes early to avoid last-minute errors and penalties.

Understanding Malaysia’s personal income tax system can help individuals manage their taxes effectively and avoid unnecessary penalties. Staying informed about tax reliefs and deductions can significantly reduce your taxable income. Always ensure timely filing and consider consulting a tax professional  for personalized advice.

For more information, visit the LHDN official website at www.hasil.gov.my

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