As of 1 January 2016, the Inland Revenue Authority of Malaysia has released the new File Specification for MTD calculation for Year 2016.

Kindly note that we are in the midst of reviewing this enhancement with SWD Team and shall keep you informed once the codes are moved to live. In the meantime, our system will still use the 2015 tax rate in January 2016. Once the codes are live, our system will automatically re-calculate the year’s MTD and adjust accordingly.

Please download the File Specification (right-click and Save Link As…) for your reference or read the summary below:

    1. Review of Income Tax Rates and Changes In Income Tax Structure
        1. Income Tax Rate for Resident Individual
          • Individual income tax rate will be increased by 3%
          • Individual income tax will be restructured whereby the chargeable income subject to the maximum rate will be increased from exceeding RM400,000 to exceeding RM1,000,000
          • Maximum rate at 25% will be increased to 26% and 28%


      1. Income Tax for Non-Resident Individual
        • Non-resident individuals’ income tax rate increased by 3%: From 25% to 28%


    1. Increase in Deduction for Spouse/Payment of Alimony to former Wife
      • Increased from RM3,000 to RM4,000


    1. Increase in Deduction for Child
      • Increased from RM1,000 to RM2,000
      • Changes in number of children eligible on amount eligible for tax relief


    1. Increase in Deduction for Children studying at tertiary level
      • Increased from RM6,000 to RM8,000


    1. Increase in Deduction on fees for tertiary education
      • Increased from RM5,000 to RM7,000


    1. Deduction for SOCSO Payment
      • Tax Payer will be eligible to claim a deduction up to a maximum of RM250 per year on the contribution to SOCSO


  1. Deduction for Parental Care
    • Tax Payer is eligible for a new personal deduction of RM1,500 for each parent subjected to following conditions:
      1. Such taxpayer does not claim expenses and medical treatment and care of parents;
      2. Parents are residents and aged 60 years and above;
      3. Parents have an annual income not exceeding RM24,000 per annum each; and
      4. Parents are legitimate natural parents and foster parents in accordance with the respective law subject to a maximum of 2 persons
        • The relief can be shared with other siblings provided that the total relief claimed shall not exceed RM1,500 for each parent


  • Amendment at Income Tax (Deduction from Remuneration)
    • Determination of amount of Monthly Tax Deduction for additional remuneration of previous years:
      “The amount of monthly tax deduction of additional remuneration before the year 2016 which is received in the current year shall be calculated in accordance with the method and Table of Monthly Tax Deduction applicable for the year it is received”.


  • Changes to TP1 & TP3 Form