IRB cautions taxpayers opting for MTD to be honest when filling TP1 forms

PETALING JAYA: The Inland Revenue Board (IRB) has warned taxpayers against trying to claim more tax relief than they are entitled to should they opt for Monthly Tax Deductions (MTD) as the final tax plan.

Inland Revenue Board (IRB) public relations officer Masrun Maslim said yesterday that those who intended to lie on their TP1 forms to claim more tax relief would face a hefty fine.

“Those who omit or understate their tax amount can face a fine of between RM1,000 and RM10,000 plus 200% of the tax undercharge.

“For example, if their computed tax is RM5,000 but the amount payable is RM6,000, the undercharge of RM1,000 will be multiplied by 200%,” he said.

Individual taxpayers who opt to have MTDs as their final tax for the 2014 year of assessment are required to submit IRB’s TP1 deduction and rebate forms to their employers so that their monthly tax deductions can be adjusted accordingly.

The claimable rebates range from purchase of computers, books and sporting goods to medical care for parents.

The Star reported on Tuesday that those opting for MTD will not have to wait until the following year to get any rebates due to them.

It can be adjusted immediately by the employer in their monthly tax deductions.

Although MTD is for the 2014 year of assessment, the IRB has asked eligible employees to start filling the TP1 forms from now — as and when there is relief to be claimed.

The IRB says it is up to employers to approve and accept the TP1 form but they are not required to check the employees’ receipts for any reliefs claimed.

However, employees need to keep receipts for seven years from the year of assessment as they might be tax-audited, while employers are required to keep the form for the same period.

Masrun said the onus was on individual taxpayers to ensure that their MTDs were not overpaid or underpaid should they opt for the final tax plan.

“Taxpayers should check online to see whether their MTDs are the same as the income tax payable.

He said those who felt that they might have underpaid or overpaid could make corrections by submitting their returns as currently done by April 30, 2014.

Many employees still in the dark over tax forms