Recently #yourfinancedoctor has heard some rumors regarding income tax for 2015, a lot of people are saying that "Income below RM5,000 is not tax liable under the Income Tax Rate 2015". Are you one of them too? And most importantly, is that true?
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| 2015 Income Tax Rate |
How do They get the Magic Number - RM5,000?
Of course, as an analytical-thinker type of person, I would always ask why and how? And as usual, most of the people would answer me "because XXX said so" without even bother to find out the fact. But most surprisingly, some get the magic number from the 2015 Tax Rate table. From the table, they claimed that below RM5,000, the tax rate is zero!
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| 2015 Tax Rate Table - source from LHDN Website |
Is that TRUE?
For a second, I thought I was wrong all these while! LOL! But after confirming with my Tax Guru - Luporti (if you need accountant can find him), fortunately, it is not true! The Chargeable Income in the table is counted annually, which means you still gotta take RM5,000 multiply by 12 months to get RM60,000. It is not their fault for misunderstanding the table. After all, who to blame when we didn't get the right-proper education on personal finance, not in school, not in university, definitely not at work too!(except for those finance and accounting students) But hey! That's why you need #yourfinancedoctor! ;)
So What's the Right Number?
So here's the right number for you. In my rough calculation, the tax relief will just consider those that will get for sure, which are personal relief (RM9,000) and EPF (max RM6,000). Here are two scenarios, namely single and married but spouse not working.
Maximum Income that is Not Tax Liable
Single = RM3,180 / monthly
For married but spouse not working scenario, the only differences are the additional of RM3,000 tax relief for spouse and RM400 tax rebate for spouse.
Maximum Income that is Not Tax Liable
Married but Spouse not Working = RM4,210 / monthly
Conclusion:
Now you know what's the minimum! So if your salary is higher than the scenario above, then you might want to consider some tax saving methods! Same as any other personal finance, it varies from one individual to another! But at the end of the day, all we want is just to Earn More, Spend Less, Invest More and Reach Goal Earlier! Too lazy to go handle it yourself? Contact #yourfinancedoctor! =p
Earn, Save, Invest, Repeat!
Till then. ;)
good educational writeup, somehow this income tax thing is really a headache to many people including myself, i just leave it all to my accounts dep to handle
ReplyDeletehaha yup it is a headache that's why I would want to write this. yup of course you could let someone else to do it, but if and only if they would help you to do tax saving. ;)
Deletehaha yup it is a headache that's why I would want to write this. yup of course you could let someone else to do it, but if and only if they would help you to do tax saving. ;)
Delete