EPF 8% Means Paying More Income Tax

[jarance]

yes, indeed ... i never declared before and im in the process of paying backdated due'sfor the last 11 years, so bit blur la... a 3rd party is actually helping do this... so all comments are much appreciated...

Wah you so terror one.. Never pay tax before for 11 years. How do you do it? :wink:

Nowadays, it is compulsory to for the company to deduct first based on your monthly income.

There is a guide where the amount of deduction is made based on "month income + number of children + number of wife".
At the end of the year, you are supposed to submit your form to IRS where they will further adjust your taxable income afetr taking into account the EPF and Insurance. There are not much you can claim for tax deduction. Some of the deduction allowable are:-
1. Medical for immediate family
2. a Computer (1 time for every 3 years)
3. Travelling (airfare - 1 trip)
4. Books.
5. Professional course.
6. EPF and Insurance (Limited to a maximum of RM6000).
7. Special relief for kids.


I find that the Govt decision to allow a maximum of RM6000 for Insurance and EPF contribution to be a bit silly considering it is saving for our future. FYI, Singapore allow full deduction for all the CPF that is deducted from your monthly salary. Employee + employer contribute to about 40% of the basic salary. (I do not know what the actual amount nowadays).
In the case of Malaysia, EPF contribution is employee 11% and employer 19% = 30% of the basic salary. With the reduction in EPF contribution to 8%, your saving would be 27% of your basic salary. Compound it over a span of 15 years, the amount at the day when you retired would be quite substantial.

If your are in business or sole owner of the business, there is more flexibilty in claiming for tax rebate. Get a professional to do it if you have not done so.

 

[jarance]

there was an article in the star recently.. based on the 'average' income, one would only make around 1++k by retirement age, and based on inflation calculated in, one would require 7++k to live for the next 20yrs..

so, if u have opportunity to venture into biz, try to.. :wink:

bro..not so easy nowadys to venture into biz.. Need capital and know how.. Sometime better if you know who...:listen:

 

[infinityKL]

Wah you so terror one.. Never pay tax before for 11 years. How do you do it? :wink:

Nowadays, it is compulsory to for the company to deduct first based on your monthly income.

There is a guide where the amount of deduction is made based on "month income + number of children + number of wife".
At the end of the year, you are supposed to submit your form to IRS where they will further adjust your taxable income afetr taking into account the EPF and Insurance. There are not much you can claim for tax deduction. Some of the deduction allowable are:-
1. Medical for immediate family
2. a Computer (1 time for every 3 years)
3. Travelling (airfare - 1 trip)
4. Books.
5. Professional course.
6. EPF and Insurance (Limited to a maximum of RM6000).
7. Special relief for kids.


I find that the Govt decision to allow a maximum of RM6000 for Insurance and EPF contribution to be a bit silly considering it is saving for our future. FYI, Singapore allow full deduction for all the CPF that is deducted from your monthly salary. Employee + employer contribute to about 40% of the basic salary. (I do not know what the actual amount nowadays).
In the case of Malaysia, EPF contribution is employee 11% and employer 19% = 30% of the basic salary. With the reduction in EPF contribution to 8%, your saving would be 27% of your basic salary. Compound it over a span of 15 years, the amount at the day when you retired would be quite substantial.

If your are in business or sole owner of the business, there is more flexibilty in claiming for tax rebate. Get a professional to do it if you have not done so.

thx for the usefull info bro, actually more than 11 years, but im required only to declare the last 11 years(acccording to 3rd party who is helping me out - laywer & accountant)..:stupid:
yes all my employers did deduct a certain amount for tax purpose's all this while, i was told that once declare lower, they will refund the balance to me and it seems like alot...god knows why IRS never even prompted or ask me for tax declaration all these years, but im sure the dedution is way more than what im taxable... now big headache la, finding all EA forms etc... im going nuts... anyway till today they havent ask or fined me, its just that im getting old and worrried about things like this.. so just getting opinions and looking at options of solving this issue.. scary when get into details... have to cheat a bit la, no choice..

 

[astroboy]

I welcome the 8%.. if it comes a little earlier.. I would have gotten a 325..

 

[E46Fanatic]

so, if u have opportunity to venture into biz, try to.. :wink:

One of the benefits of owning a business is that every ounce of effort put into your job, contributes to your "salary" as well as asset appreciation. Killing 2 birds with one stone :wink: However, its much harder to run a biz than to earn a salary.

 

[adliz]

One of the benefits of owning a business is that every ounce of effort put into your job, contributes to your "salary" as well as asset appreciation. Killing 2 birds with one stone :wink: However, its much harder to run a biz than to earn a salary.

precisely.. :top:

 

[initialM]

Assuming salary is 4k so 3% will be RM120 a month? Not much help considering now all things increase. Even the 6k income tax relief in too small. I would welcome more tax relief:love:

 

[infinityKL]

I welcome the 8%.. if it comes a little earlier.. I would have gotten a 325..

hello a'boy, wher you missing in action? missing ur post la..

hv a nice weekend..:wink:

 

[Crymson]

I suppose it depends on individual. If you want to maintain 11% in EPF, just sign the form and give to your HR dept. You don't have to go all the way to EPF to submit, your HR will do it. Btw, EPF is not going to help fully in your retirement years but it's good to have as a start/defence. Why fuss about it, you didn't complain about it in 1998. If you really want to save more in EPF, then go and ask your HR to deduct 12 or 15% of your salary to contribute to your EPF. Stop talking about your 11%.

Out of 11.4 million EPF members only 4,700 members have more than RM1 million. The rest, on average, they have 114k for their retirement. EPF wants to make sure on average everyone have at least RM120k when they retirement. Thats RM500 per month for 20 years. I'm sure all of you here will have more than that (projection). But what about the lower income bracket?

Most of you here represent 15% of the whole population. 4% are the rich/ultra-rich. The rest, their household income are lesser than RM4k per month. These people would need that extra money to sustain in current high cost of living. Try asking your lower rank officer or clerical staff. So is it fair for you to complain? Just b'coz you drive a BMW, do you think these people can afford to own & maintain the car you drive? Extra spending in the local economy (domestic consumption) would help sustain the country's economy from falling. And it actually helps the lower income. Which do you want in current condition - no economic movement at-all or slower but moving economy. So with your complaints ... it actually boils down, did the government's economic stimulation help you or the lower income?

Those who can afford and have no financial affect in any economic situation .... by all means save and invest. And the lower income group, if possible they can budget to set aside for saving ... then they should do it.

Be thankful with what you have ... stop whining.

Thanks for reading.

 

[astroboy]

I have actually made some rough calculation..

Based on Taksiran 2007, tax relief for EPF portion is RM6k and based on 11%, to make up for max out EPF deduction, your annual income needs to be 6k/11% = RM54,546, or monthly income of about RM4.5k bonus included. So the 8% EPF will not attract extra taxes.

If I may ask, how many % of population actually make RM4.5k a month? and if middle class income is around RM4k, than all the middle class and lower class income group will attract more taxes affected by the 8% EPF portion.

.. and the famous fact goes, the rich become richer, the poor become poorer! Again, Govt out smart us..and I believe they are the one that has the last laugh.. this is not Govt bashing but I'm just expressing my opinion.. maybe they overlook this? *innocent*

 

[adliz]

Most of you here represent 15% of the whole population. 4% are the rich/ultra-rich. The rest, their household income are lesser than RM4k per month. These people would need that extra money to sustain in current high cost of living. Try asking your lower rank officer or clerical staff. So is it fair for you to complain?

Just b'coz you drive a BMW, do you think these people can afford to own & maintain the car you drive? Extra spending in the local economy (domestic consumption) would help sustain the country's economy from falling. And it actually helps the lower income. Which do you want in current condition - no economic movement at-all or slower but moving economy.

So with your complaints ... it actually boils down, did the government's economic stimulation help you or the lower income?

Be thankful with what you have ... stop whining.

precisely... :top:i didnt know the percentage, but could be well true that approx 85% of malaysians are not as fortunate as us here.. see how many bmws and merc? try to see how many protons, peroduas, and bikes..

no offence to the rest, but pls dun be ignorant and self-centered.. there are only a few better than us, but they are a lot, lot more worse off..

 

[Jules]

There are not much you can claim for tax deduction. Some of the deduction allowable are:-

3. Travelling (airfare - 1 trip)

Jarance,

Care to explain under what circumstances can this be claimed? For business or pleasure too? I somehow missed this despite doing all my own ( plus wife's ) tax return all these years.....cheh!

THANKS!

 

[infinityKL]

dont get them wrong... there a lot of proton's n perodua's wt a big bank balance....

 

[astroboy]

dont get them wrong... there a lot of proton's n perodua's wt a big bank balance....

.... and BMW and Merc owners with -ve bank balance..

 

[jarance]

Jarance,

Care to explain under what circumstances can this be claimed? For business or pleasure too? I somehow missed this despite doing all my own ( plus wife's ) tax return all these years.....cheh!

THANKS!

Actually both is applicable. You only need to submit the use air ticket and the company invoice for the ticket. I went for a holiday with my family and I claim this as an expenses. It was allowed. :listen:

 

[Traveler]

Actually both is applicable. You only need to submit the use air ticket and the company invoice for the ticket. I went for a holiday with my family and I claim this as an expenses. It was allowed. :listen:

Really can claim air ticket? I didn't know that.. Never saw anything like it in the tax forms... I will go ask my colleague (who is the resident tax expert here)....

 

[E46Fanatic]

Actually both is applicable. You only need to submit the use air ticket and the company invoice for the ticket. I went for a holiday with my family and I claim this as an expenses. It was allowed. :listen:

Wow cool. Which section in the BE form to put this deduction under arr?

 

[jarance]

Wow cool. Which section in the BE form to put this deduction under arr?

errr.. Not sure.. Done by my Home Minister.

But I check the latest relief at LHDN website, there is no such thing..

see link.. http://www.hasil.org.my/english/eng_NO2_1_1E.asp


Look like I kena con by the Home Minister to go for holiday thinking can take advantage of this relief.. :stupid::stupid:

Sorry for misleading

 

[jarance]

Try the FAQ on income tax..

http://www.hasil.org.my/english/eng_soalan.asp