Monday, April 20, 2009

Make sure your tax exempted allowances are filed correctly in EA Form

In the latest revised EA Form for tax assessment year 2008 (Borang C.P.8A-Pin.2008), there are 2 columns for filing your allowances / perquisites / gifts / benefits provided to you by your employer.

Column to file taxable allowances / perquisites / gifts / benefits:
Item B.1 - Tip kasar, perkuisit, penerimaan sagu hati atau elaun-elaun lain.

Column to file tax exempted allowances / perquisites / gifts / benefits:
Item G - Jumlah elaun / perkuisit / pemberian / manfaat yang dikecualikan cukai.

Among the tax exempt items (not applicable to owner or executive director of the company) are:

  • Perquisite (whether in money or otherwise) provided to the employee pursuant to his employment in respect of: past achievement award; service excellence award, innovation award or productivity award; or long service award provided that the employee has exercised an employment for more than 10 years with the same employer (up to RM2000 per annum).
  • Gift of new personal computer and monthly broadband subscription fee (registered in the name of the employer) (in year 2008-2010)
  • Petrol card, petrol allowance or travel allowance between the home and work place (in year 2008-2010, up to RM2400 per annum).
  • Petrol card, petrol allowance or travel allowance and toll card for official duties (up to RM6000 per annum).
  • Allowance or fees for parking
  • Meal allowance
  • Allowance or subsidies for childcare in respect of children (up to RM2400 per annum).
  • Telephone, mobile phone, pager and Personal Data Assistant (PDA).
  • Bills for telephone, mobile phone, pager and PDA registered in the name of the employee or employer.
  • Employers’ own goods provided free of charge or at discounted value (up to RM1000 per annum).
  • Employers’ own services provided free or at a discount provided such benefits are not transferable.
  • Medical benefits exempted from tax are extended to include maternity expenses and traditional medicines such as ayurvedic and acupuncture.
  • Interest subsidies for loans up to RM300,000 in respect of housing, motor vehicle and education loans.
Make sure your HR filed your tax exempted items in the correct place (item G) in your EA Form 2008. If they are filed under item B.1, you might end up paying extra tax which suppose can be exempted.

For more detail, please refer to the Explanatory notes to Borang BE [Malay version] [English version].

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7 comments:

Anonymous said... Reply To This Comment

ex-gratia received from ex-employer, does it exempted from tax? the employer already deduct PCB when paying the ex-gratia. Now if we want to filing tax returns, is it similar to compensation of loss of employment? got exempted of RM6k per service yr? TQ...

Voyager8 said... Reply To This Comment

Hi,

It depends on your EA Form that your former employer issued to you.

If it is inside the taxable income, you might probably need to visit to LHDN and explain to them.

Anonymous said... Reply To This Comment

Thks for the reply...:-)

So meaning if it is already included in the EA, it will/shd be taxable already?

Voyager8 said... Reply To This Comment

Hi,

Unless it is in the last column (non-taxable income), LHDN will assume all incomes in EA are taxable.

If there is exceptional case, you can talk with them to get the exemption, they will keep a record with them.

Anonymous said... Reply To This Comment

Hi,

I have an amount stated in column G of EA form. Since it is tax exempted, does that mean I need not include this figure into my BE form for deduction? Thx.

Voyager8 said... Reply To This Comment

Hi,

If you calculate the columns in your EA Form, you will notice that Column G is not added to your gross income, so you cannot deduct it.

It is there for reference only, and no need to declare in BE Form.

Anonymous said... Reply To This Comment

OK thanks. Just figured it out just now as well.

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