Repayment of Tax

Tax Refund

A taxpayer is entitled to claim a refund of tax if:

1.     He has paid in excess of his actual tax liability.

2.     He has a credit balance after a reduced assessment.

3.     He tax deducted from dividend income is greater than the total tax liability for the year.

A claim for repayment of tax under category 3 above must be made within 6 years. For example, a claim for repayment of tax deducted from dividends paid in the year 1997 must be submitted latest by the end of the year 2003.

Preventing excess Credit in the Taxpayer’s Account

1.     Taxpayer should monitor the monthly deductions from salary or bi-monthly instalment payment on business income, and compare it with the actual tax liability according to the notice of assessment.

2.     An application to the Collection branch to stop further deductions from salaries must be made immediately upon confirmation of the tax liability so as to avoid excessive deduction from the salary.

3.     A taxpayer must ensure that the employer is notified of the following changes in personal  details:

a.     Marriage

b.     Number of children

c.      Divorce / separation

d.     Death of spouse

e.      Death of child

This information is important in determining the right amount of monthly salary deduction in accordance with the Scheduler Tax Deduction tables.

4.     To notify LHDNM on the amount of zakat paid in a year.