How to amend tax return Malaysia?

Amending Your Tax Return: A Guide to Seeking Relief under Section 131 of the Income Tax Act 1967

Introduction

As taxpayers, we understand the importance of accurately filing our tax returns. However, mistakes happen, and sometimes we realize that we have overpaid our taxes or failed to claim certain deductions or credits. In such cases, it's crucial to know how to rectify the situation. This article aims to provide a comprehensive overview of the conditions and procedures involved in amending a tax return under Section 131 and 131A of the Income Tax Act 1967 (ITA), as prescribed by the Inland Revenue Board (IRB).

Key Takeaways:

By reading this article, you will gain insights into:

  • Defining errors or mistakes in the Income Tax Return Form (ITRF).

  • Understanding the applicable time frames for making an amendment.

  • Familiarizing yourself with the conditions for applying for relief.

  • Learning how to initiate the application process.

Understanding Errors or Mistakes in the Income Tax Return Form (ITRF)

If you have paid excessive taxes due to any of the following reasons, it can be considered an error or mistake in your ITRF:

  • Failure to deduct an allowable expense

  • Arithmetical errors

  • Misinterpretation of tax laws

  • Reporting income for the previous assessment year as current year income

  • Other non-errors or mistakes, such as obtaining tax exemptions under the Promotion of Investment Act 1986.

Conditions for Application

  • To qualify for relief under Section 131 and Section 131(A) of the ITA, you must adhere to the following conditions:

  • Note that the application will not be considered if your ITRF is in accordance with the known standards, rules, and practices set by the Director-General of Inland Revenue (DGIR) at the time of assessment. Examples of such standards include private rulings, advance rulings, IRB guidelines, case law, and other written evidence.

  • Ensure that you have paid all the taxes due for the relevant assessment year.

  • Submit your application within the specified time frames after the end of the assessment year.

Time Frames for the Application

You can submit an application for relief within the following time frames:

i. Within 5 years after the end of the assessment year:

  • When errors or mistakes are discovered after the assessment year in which the assessment was made.

  • When an exemption, relief, remission, allowance, or deduction is granted after the assessment year in which the ITRF was submitted.

  • When a deduction is granted under the ITA or any written law published after the submission of the ITRF.

ii. Within 1 year after the end of the assessment year:

  • When deductions on expenses are allowed after the payment of withholding tax and any related increased taxes.

Applying for Relief

To apply for relief, you can submit a letter or use Form CP15C, clearly stating the detailed reasons for your application.

Sources:

For more information, you can refer to Public Ruling 7/2020: Appeal Against An Assessment And Application For Relief, available at the following link:

https://phl.hasil.gov.my/pdf/pdfam/PR_07_2020.pdf

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