[Large] [Medium] [Small]
MTD is to be deducted from the employee’s taxable remuneration only. All the tax exemption on allowances, benefit-in-kind and perquisites shall be excluded from the remuneration for MTD purposes. Any amount exceed the restricted amount shall be taxable. Please refer to table below:-
Type of benefit-in-kind and perquisites that exempt from tax are as follows:
|Allowances / Perquisites / Gifts / Benefits||Restricted amount (RM)|
|a.||Petrol card, petrol allowance, travelling allowance or toll payment or any of its combination for official duties.|
If the amount received exceeds RM6,000 a year, the employee can make a further deduction in respect of the amount spent for official duties.
Records pertaining to the claim for official duties and the exempted amount must be kept for a period of 7 years for audit purpose.
|b.||Child care allowance in respect of children up to 12 years of age.||RM 2,400.00|
|c.||Gift of fixed line telephone, mobile phone, pager orPersonal Digital Assistant(PDA) registered in the name of the employee or employer including cost of registration and installation.||Limited to only 1 unit for each category of assets|
|d.||Monthly bills for subscription of broadband, fixed line telephone, mobile phone, pager and PDA registered in the name of the employee or employer including cost of registration and installation.||Limited to only 1 line for each category of assets.|
|e.||Gift of new personal computer (one unit). „Personal computer. means a desktop computer, laptop computer and handheld computer but does not include a hand phone with computer facilities. [ P.U. (A) 191/2008].||Limited to 1 unit|
only (up to Y/A 2010 only)
|f.||Perquisite (whether in money or otherwise) provided to the employee pursuant to his employment in respect of:-|
(i) past achievement award;
(ii) service excellence award, innovation award or productivity award; and
(iii) long service award (provided that the employee has exercised an employment for more than 10 years with the same employer).
|g.||Parking rate and parking allowance. This includes parking rate paid by the employer directly to the parking operator.||Restricted to the|
|h.||Meal allowance received on a regular basis and given at the same rate to all employees. Meal allowance provided for purposes such as overtime or outstation / overseas trips and other similar purposes in exercising an employment are only exempted if given based on the rate fixed in the internal circular or written instruction of the employer.||Restricted to the|
|i.||Subsidised interest for housing, education or car loan is fully exempted from tax if the total amount of loan taken in aggregate does not exceed RM300,000.|
If the total amount of loan exceeds RM300,000, the amount of subsidized interest to be exempted from tax is limited in accordance with the following formula :
A * B/C
A x B/C
A = is the difference between the amount of interest to be borne by the employee and the amount of interest payable by the employee in the basis period for a year of assessment;
B = is the aggregate of the balance of the principal amount of housing, education or car loan taken by the employee in the basis period for a year of assessment or RM300,000, whichever is lower;
C = is the total aggregate of the principal amount of housing, education or car loan taken by the employee.
Example : Normal remuneration : RM5,000 per month
Car allowance : RM 800 per month
Meal allowance : RM 300 per month(Exempted)
Childcare allowance : RM 300 per month(Exempted – limit to RM2,400 per year)
Total : RM6,400 per month
To determine MTD amount, taxable income as follow:
Normal remuneration : RM5,000 per month
Car allowance : RM 800 per month
Childcare allowance : Taxable on allowance > RM2400 during the year.
Total taxable remuneration : RM 5,800 per month
Downloadherefor more detail on exempt benefit-in-kind and perquisites
Where an employee receives a fixed allowance for telephone, the full amount of that telephone allowance is taxable as part of his gross income from employment under paragraph 13(1)(a) of the ITA 1967.