Submitting your income tax return through e-Filing is often seen as the final step in settling obligations with Lembaga Hasil Dalam Negeri Malaysia (LHDN). But for some taxpayers, the process does not end there. Even with a completed submission, LHDN may still reach out to clarify discrepancies or investigate suspicious claims.
Tax authorities worldwide use audits and follow-ups to ensure fairness in the system, and so, understanding why such checks happen can prevent unnecessary stress.
The Obligation to File Every Year
Anyone earning taxable income is required to file an annual return. Employees normally use Form e-BE, while those running businesses must file under e-B. Other forms such as e-BT, e-P, or e-TF apply to specific cases.
Filing is compulsory every year, whether the taxpayer records a profit, loss, or no income at all.
READ MORE: Step-by-Step Guide To Registering And Filing e-Filing Via MyTax LHDN For First-Time Users
Common Triggers for Follow-Up
LHDN does not contact taxpayers at random. Most investigations stem from specific mistakes or inconsistencies:
Wrong Form Submitted
If a business owner files using the employee-only e-BE form, income from the business goes undeclared. This mismatch can prompt immediate review.
Suspicious Deduction Claims
Tax reliefs exist to ease financial burdens, covering expenses such as education, medical treatment, insurance, and lifestyle purchases. But when a taxpayer claims the full allowance across every category, it may not align with their declared income. That imbalance can trigger further scrutiny.
Missing a Year of Filing
Some assume they can skip filing in years where a business suffers losses. In reality, declarations are still required. Failing to do so can be seen as non-compliance.
Inaccurate or Misleading Information
Low declared income paired with evidence of luxury spending — whether from bank statements or social media — can draw attention. LHDN cross-checks available data, and inconsistencies often lead to enquiries.
Fixing Mistakes After Submission
Realising an error after filing does not automatically mean penalties. Taxpayers can make corrections through several channels:
- Manual amendment: Submit a letter and supporting documents to the relevant LHDN office.
- Online amendment: Use the e-Permohonan Pindaan BE system for cases such as overreporting income or underclaiming deductions.
- Borang Nyata Terpinda (BNT): For more serious corrections — such as undeclared income or excessive deductions — a BNT must be submitted within six months of the filing deadline.
After six months, only voluntary disclosures are allowed.
Additional Charges for BNT
Submitting a BNT may result in higher tax bills:
- Amendments within 60 days: additional 10% on the tax or extra tax owed.
- Amendments after 60 days but within six months: additional 15%.
Depending on the case, this can shift a taxpayer’s position from non-taxable to taxable, increase tax payable, or reduce a refund.
Reliefs Worth Claiming — With Proof
Tax reliefs are meant to be used, but they must be reasonable and well-documented. Eligible claims include:
- Contributions to the Employees Provident Fund (EPF) and insurance.
- Education or medical expenses for self, spouse, children, or parents.
- National Education Savings Scheme (SSPN) contributions.
- Lifestyle-related spending, such as books, sports equipment, internet subscriptions, and electric vehicles.
- Childcare fees and higher education costs for dependants.
Receipts and proof of payment must be kept for seven years, as LHDN may request them long after filing.
For most taxpayers, filing correctly and keeping accurate records will mean never hearing from LHDN after submission. Problems arise mainly when claims are excessive, forms are misused, or income and spending don’t match up.
