BDCM-B-Week21-Tax: Income Tax Offences, Fines and Penalties

As per Income Tax Act (ITA) 1967, any person who committed for an offence will be fine either through penalty or imprisonment or both depending on severity or the number of offences.

The followings tables below are the summary of what you may refer to:

(A) General

Type Of Offences	Provisions Under ITA 1967	Amount Of Fine (RM)
Failure to furnish an Income Tax Return Form.	112(1)	200 to 2,000 / imprisonment / both
Failure to give notice of chargeability to tax.	112(1)	200 to 2,000 / imprisonment / both
Make an incorrect tax return by omitting or understating any income.	113(1)(a)	1,000 to 10,000 and 200% of tax undercharged
Give any incorrect information in matters affecting the tax liability of a taxpayer or any other person.	113(1)(b)	1,000 to 10,000 and 200% of tax undercharged
Wilfully and with intent to evade or assist any other person to evade tax.	114(1)	1,000 to 20,000 / imprisonment / both and 300% of tax undercharged
Assist or advise others to under declare their income.	114(1A)	2,000 to 20,000 / imprisonment / both
Attempt to leave the country without payment of tax.	115(1)	200 to 2,000 / imprisonment / both
Obstruct any authorized officer of LHDN in carrying out his duties.	116	1,000 to 10,000 / imprisonment / both
Fails to comply with an order to keep proper records and documentation.	119A	300 to 10,000 / imprisonment / both
Fails to comply with a notice asking for certain information as required by LHDN.	120(1)	200 to 2,000 / imprisonment / both
Fails to give notice on changes of address within 3 months.	120(1)	200 to 2,000 / imprisonment / both

(B) Payment of Estimated Income Tax (For Business Income) – CP 204

Type of Offences	Provisions Under ITA 1967	Penalties
Pay instalments after 30 days of the date set.	107B(3)	10% on instalment due
Actual tax 30% higher than the revised estimate of tax.	107B(4)	10% of the difference in actual tax balances and estimated tax made

(C) Payment of Income Tax – Form B/BE

Type of Offences	Source of Income	Provisions Under ITA 1967	Penalties
Pay taxes after 30th April.	Non- Business	103(3)	a. 10% increment from the tax payable, and b. Additional 5% increment on the balance of (a) if payment is not made after 60 days from the final date (will abolished effective YA 2020)
Pay taxes after 30th June.	Business	103(4)