Income Tax

Definition :

Annual charge levied on both earned income (wages, salaries, commission) and unearned income (dividends, interest, rents). If there is no income, there is no income tax. In Malaysia, income tax is imposed, assessed and collected under the Income Tax Act (ITA) 1967.

Two Basic Types :

• Personal income tax, levied on incomes of individuals, households, partnerships and sole proprietorship.
• Corporation income tax, levied on profits (net earnings) of incorporated firms.

Basis Period & Year of Assessment :

• Usually income tax is assessed upon one-year period.

Computing Chargeable Income

Appeal Against Tax Assessment