Income Tax Lawyer near Me

What is income ?

The Income Tax Act 1967 did not define what is “income”. However under section 4, income has been classified into the following categories:

 1. Section 4(a) - business income;

 2. Section 4(aa) - Capital Gains Tax (came into force 01.01.2024);

 3. Section 4(b) - employment income;

 4. Section 4(c) - dividend income; 

 5. Section 4(d) - rental income;

 6. Section 4(e) - pension/annuities income; 

 7. Section 4(f) - all other income 

Tax Assessment

LHDN will issue a tax assessment form called Form J, and if there is penalty, it will be issued under Form JA under a separate year of assessment (YA). Year of assessment means every single period of that particular year, ie, January until December 2024 is the year of assessment for YA 2024.

How long can LHDN assess tax payer taxes?

LHDN can assess taxpayer’s taxes up to 5 years back. If there is negligence, wilful default or act of fraud, usually when the tax payer had incorrectly paid their taxes, then LHDN has no limitation in terms of the year of assessment that they wish to audit and assess.

Tax Appeal to Special Commissioner of Income Tax (SCIT)

If taxpayers (individual or company) disagree with the assessment, they can appeal to the SCIT in form Q.

Penalty of tax payment under section 113(2) of the ITA 1967

Taxpayer may be assessed for incorrect return in the penalty rate of 15%, 30% or 45%. The burden of proof is on the taxpayer to prove that the tax submission return filed is true to get the penalty to be set aside.

Relief for excessive tax paid under section 131 of the ITA 1967

Taxpayers may appeal to the DGIR/LHDN to seek relief on the excessive tax paid for that year of assessment. It may be an error or mistake in his return or statement furnished to the Director General of Inland Revenue. He has five [5] years to do so after the end of the year of assessment which was made.

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