Wednesday, August 13, 2014

Understand Income Tax Penalties!

We can't take Income Tax matter lightly because the fines and penalties are no joke!


Offences, Fines and Penalties
Type Of Offences
Provisions Under ITA 1967
Amount Of Fine (RM)
Failure (without reasonable excuse) to furnish an Income Tax Return Form.
112(1)
200 to 2,000 / imprisonment / both
* Changed wef YA2011
Failure (without reasonable excuse) to give notice of chargeability to tax.
112(1)
200 to 2,000 / imprisonment / both
Make an incorrect tax return by omitting or understating any income.
113(1)(a)
1,000 to 10,000 and 200% of tax undercharged
Give any incorrect information in matters affecting the tax liability of a taxpayer or any other person.
113(1)(b)
1,000 to 10,000 and 200% of tax undercharged
Wilfully and with intent to evade or assist any other person to evade tax.
114(1)
1,000 to 20,000 / imprisonment / both and 300% of tax undercharged
Assist or advise (without reasonable care) others to under declare their income.
114(1A)
2,000 to 20,000 /imprisonment / both
Attempt to leave the country without payment of tax.
115(1)
200 to 2,000 /imprisonment / both
Obstruct any authorized officer of IRBM in carrying out his duties.
116
1,000 to 10,000 / imprisonment / both
Fails (without reasonable excuse) to comply with an order to keep proper records and documentation.
119A
300 to 10,000 / imprisonment / both
Fails (without reasonable excuse) to comply with a notice asking for certain information as required by IRBM.
120(1)
200 to 2,000 /imprisonment / both
Fails (without reasonable excuse) to give notice on changes of address within 3 months.
120(1)
200 to 2,000 /imprisonment / both

Payment of Income Tax
Type of Offences
Source of Income
Provisions Under ITA 1967
Penalties
Pay taxes after 30th April.
Non-Business
103(3)
a. 10% increment from the tax payable, and
b. Additional 5% increment on the balance of (a) if payment is not made after 60 days from the final date
Pay taxes after 30th June.
Business
103(4)

Payment of Estimated Income Tax
(For Business Income)
Type of Offences
Provisions Under ITA 1967
Penalties
Pay instalments after 30 days of the date set.
107B(3)
10% on instalment due
Actual tax 30% higher than the revised estimate of tax.
107B(4)
10% of the difference in actual tax balances and estimated tax made

Late Filing of Tax Return?



Source: http://www.hasil.gov.my/