Every year when the tax filing period rolls around, the same question comes up: Do I actually need to submit an income tax return? The answer depends on your total annual income, the sources of your income, and how you’ve chosen to be assessed with the LHDN. And if you’re a salaried employee, submitting your income tax return is also how you claim tax reliefs and get a refund on any overpaid tax.

For Year of Assessment (YA) 2025, e-Filing opens on 1 March 2026. The deadlines to complete your e-Filing depend on your income type.

If You Earn Employment Income

For salaried employees who already have Monthly Tax Deduction (MTD/PCB) taken from their pay, the threshold is RM37,333. If your annual employment income exceeds that amount (roughly RM3,111 per month), you are eligible to be taxed.

There are several commonly applied basic reliefs, such as  RM9,000 for an individual and their dependent relatives, plus RM4,000 for a spouse (if applicable), and RM2,000 for each unmarried child under 18. There’s also a tax rebate of RM400 (and another RM400 for your spouse, if applicable), which applies if your taxable income is RM35,000 or below. 

Non-Taxable Income Thresholds

If your annual income is below the threshold listed for your assessment type, you are not required to pay tax. These are the thresholds according to the LHDN.

Earning below the threshold and not needing to file are two different things, though. If you’ve registered with the LHDN and have a tax number, you may still need to submit a tax return even if your final tax payable is zero. 

You can check whether you have a tax file by logging into the MyTax portal with your MyKad number, or by calling the Hasil Care Line at 03-8911 1000.

What If Your Employer Already Deducts MTD

If your employer has been deducting MTD throughout the year, you have the option to let those deductions serve as your final tax. If you choose this, you don’t need to file a tax return form at all.

The catch is that MTD only accounts for your salary and a few basic reliefs. It doesn’t factor in things you personally spent money on during the year, like tax reliefs for lifestyle purchases, medical expenses, education insurance, or course fees. If you’ve spent money on any of these, you’ve likely overpaid tax through MTD. Filing and claiming every relief you’re eligible for is the only way to get that money back, and there’s really no good reason not to.

For example, say you earned RM40,000 in 2025, and your employer deducted MTD based on that figure. During the year, you also spent RM3,000 on a laptop and RM2,000 on medical check-ups, both of which qualify as tax reliefs. If you file, those RM5,000 in tax reliefs would reduce your chargeable income to RM35,000, which works out to roughly RM250 less in tax (depending on your tax bracket). Without filing, you’d never see that RM250 back. Just make sure you submit before the deadline to avoid penalties.

If You Earn Business Income

The rules for business income are different from employment income. If you earn any profits from running a business, freelancing, or doing any kind of independent work, that income is liable to tax. There’s no minimum earning threshold the way there is for salaried employees. Even if you only made RM3,000 from freelance work last year, you’re technically expected to declare it.

To be clear, “business” in this context doesn’t mean you need to have a registered company (Sdn Bhd) or formal business structure. The LHDN is referring to any activity where you earn income independently, outside of a regular employer-employee relationship. It covers two main categories.

Sole proprietorship or self-employed refers to anyone carrying on a business on their own. This is the most common setup for freelancers, independent contractors, and anyone running a one-person operation.

Partnerships are ventures where two or more parties combine ownership, workforce, or skills to share profits. Partnerships themselves are not taxed, but each partner reports their share of income individually through Form B.

What Counts As Business Income

The LHDN’s official list of business activities goes further than most people expect, and it covers a lot of gig economy and side hustle work that you might not immediately think of as a “business.”

For traditional businesses, this includes sundry shops, night market stalls, food stalls, agriculture and farming, and professional practices like clinics, law firms, and accounting firms.

For the digital economy and creative work, it covers online businesses of any kind, copywriting, YouTube content creation, blogging, and work as an actor, singer, influencer, or product ambassador. If you’re earning money through content creation or brand deals, the LHDN considers that as a business income.

It also covers commission-based work (like insurance or property agents), tuition centres, private lecturing, direct selling, stockist arrangements, and transport services like taxi driving and e-hailing through platforms like Grab.

In practical terms, if you’re earning money from any of the activities above, it doesn’t matter whether you’ve registered a business or not. The income is taxable either way.

If You Have Both Employment and Business Income

If you’re working a regular salaried job and running a side business, you’ll need to declare both sources of income in the same tax return using Form B (not Form BE). Form B has sections for both employment income and business income, and any MTD your employer has already deducted will be accounted for within that form.

What Should You Do Next

Your next step depends on your situation.

If you’re a salaried employee earning above the threshold for your assessment type (check the table above), you should submit your tax return. Even if your employer deducts MTD, filing lets you claim additional tax reliefs and potentially get a refund. 

Your employer’s MTD deductions don’t account for tax reliefs like lifestyle purchases, insurance premiums, or medical expenses, so if you’ve spent money on any of these during the year, filing is how you get that tax back.

If you’re a salaried employee earning below the threshold, you may not owe any tax, but you should still check whether you have an active tax file with the LHDN. If you do, it’s generally safer to file a zero-tax return than to leave it.

If you earn any business or freelance income, regardless of the amount, you’re expected to file using Form B.

You can file through the MyTax portal, which opened for YA 2025 on 1 March 2026. If you have multiple income sources or a complex financial setup, a licensed tax agent can help, as the LHDN maintains a directory of registered tax agents on their website. For general enquiries, you can also call the Hasil Care Line at 03-8911 1000.

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Steffi Manisha Arokiam

Steffi Manisha Arokiam is a Tax Director at ThinkTX Consultants, where she leads the firm’s Transfer Pricing and e-Invoicing practice. She advises both individuals and corporations across a wide range of tax matters, including Real Property Gains Tax (RPGT), stamp duty, estate tax, and global mobility for expatriates. Recognised for combining strong technical expertise with a practical, solutions-driven approach, Steffi helps clients navigate complex tax issues with clarity and confidence.

A respected thought leader in taxation, Steffi has authored numerous technical articles and professional newsletters. Her work has been published by the International Bureau of Fiscal Documentation (IBFD) and Wolters Kluwer (CCH), and she has been featured on BFM 89.9 discussing crypto taxation.

 

Professional Affiliations

• Member of the Malaysian Institute of Accountants (MIA)
• Member of the Chartered Tax Institute of Malaysia (CTIM)
• ASEAN Chartered Professional Accountant (ASEAN CPA)
• Member of the International Fiscal Association (IFA)
• Professional Trainer certified by HRD Corp

As a trusted tax partner of RinggitPlus, Steffi reviews and verifies all content relating to Malaysian taxation to ensure it is accurate, up to date, and practical — helping readers better understand the tax system and make the most of their tax position.

About THE AUTHOR

Steffi Manisha Arokiam

Steffi Manisha Arokiam

Steffi Manisha Arokiam is a Tax Director at ThinkTX Consultants, where she leads the firm's Transfer Pricing and e-Invoicing practice. She advises both individuals and corporations across a wide range of tax matters, including Real Property Gains Tax (RPGT), stamp duty, estate tax, and global mobility for expatriates. Recognised for combining strong technical expertise with a practical, solutions-driven approach, Steffi helps clients navigate complex tax issues with clarity and confidence. A respected thought leader in taxation, Steffi has authored numerous technical articles and professional newsletters. Her work has been published by the International Bureau of Fiscal Documentation (IBFD) and Wolters Kluwer (CCH), and she has been featured on BFM 89.9 discussing crypto taxation.   Professional Affiliations

• Member of the Malaysian Institute of Accountants (MIA)
• Member of the Chartered Tax Institute of Malaysia (CTIM)
• ASEAN Chartered Professional Accountant (ASEAN CPA)
• Member of the International Fiscal Association (IFA)
• Professional Trainer certified by HRD Corp

As a trusted tax partner of RinggitPlus, Steffi reviews and verifies all content relating to Malaysian taxation to ensure it is accurate, up to date, and practical — helping readers better understand the tax system and make the most of their tax position.

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