While income tax is mandatory for everyone, many assume that the entire sum is usually deducted out of one’s pay cheque every month and there is nothing to worry about when income tax season comes around.
Sometimes due to the duration of your employment with a new company, these calculations could go haywire and you may have been contributing beneath the tax bracket. On the other hand, businesses and commission owners such as real estate agents or insurance agents pay their taxes at the end of the business year.
According to the Inland Revenue Board of Malaysia, also known as Lembaga Hasil Dalam Negeri (LHDN) there are numerous avenues to pay your taxes and therefore, there should not be an excuse on having technical issues with any payment.
Here are some ways you can take advantage of this ready convenience when tax season comes around next.
Without even leaving your house, you could just transfer the money you owe to LHDN, through your online banking accounts. It is important to note, not all banks are on the appointed list of LHDN. Always check the website for the most updated panel banks.
As of now, the current list of banks are as follows:
- Alliance Bank
- Hong Leong Bank
- Public Bank
- Bank Islam
You could also opt to use Pos Malaysia Online as they are hosting a few additional banks under them like Affin Bank, Al-Rajhi, Bank Rakyat and MEPSCASH.
Automated Teller Machines (ATM)
If your internet connection is down (or if you fear that performing online transactions are insecure), fret not, it's not the end of the world. You can make your way over to Public Bank, Maybank or CIMB Bank to use the ATMs and make payment for your taxes from here instead. Having an account in one of these three banks may be your saving grace if you are one of those last minute people, and realise that you couldn’t make the online transfer. Just make sure you have sufficient money in these accounts when you want to pay your taxes otherwise that's another headache that you would need to sort out instead.
Cheque Deposit Machines
Based on the LHDN website, the only bank that accepts payment via cheque deposit machine (CDM) is Public Bank Berhad. Do bear in mind that cheques are charged a processing fee of RM0.50 so if you would prefer your transaction to incur minimal charges, this option is definitely one of the most economical decisions that you can make.
Cash Deposit Machine
For some of the older generation people who are not exactly tech-savvy, may prefer to handover their money at the bank. They may do so at CIMB Bank Berhad branches nationwide, via the cash deposit machine.
While this option is rarely used, Maybank does have a tele-banking option for those who are not good with machines or do not have an online account.
For Maybank account holders, they can call up the Kawanku Phone Banking line and enjoy some human interaction while getting some assistance to pay their taxes.
Credit Card Payment
This is usually our go-to payment option as we try to stretch our ringgit and pay it back at a later date. The best part is, LHDN accepts VISA, Mastercard, and American Express.
While that may work as a valuable advantage to delay our payments to a later date, LHDN does charge a handling fee of 0.80% on your total tax bill.
But despite the additional surcharge, it may come in as a handy way to restructure the payment if the sum is a very large amount, via an Easy Payment Plan (EPP).
Diversify Your Options
Although technology has come a long way and so have the LHDN process of collecting taxes, do not rely on just one option. You never know when there could be too much traffic on a website, technical issues at the deposit machines or you just forgot to pay your Internet bill to access the website.
Head on over to our savings accounts page and pick one of the many different options we offer, in order to have a bank account with one of the selected banks above.
Can't bear to part with a large sum of money for your taxes? Ensure you have a great credit card to give you the option of breaking down your large tax payment into smaller EPP options , that take the big pinch out of your lump sum payment. Happy hunting!
Are there any other ways of paying income tax that we have missed out on? Let us know in the comment section below.