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Summary of offences and penalties under Income Tax Act 1967
Summary of offences and penalties under Income Tax Act 1967

Summary of offences and penalties under Income Tax Act 1967

Summary of offences and penalties under Income Tax Act 1967
Offence Penalty
1. Failure to furnish a return [s.77 (1)] or give notice of chargeability [s.77(2) or (3)]
  • Fine of less than RM 200 and not more than RM20,000 or 6 months’ imprisonment or both [s.112 (1)];
OR:
No prosecution, but taxpayer required to pay penalty of three times the amount of tax [s.112(3)(a)]
  • The DGIR empowered to impose additional penalty [s.112(4)]
2. Failure to provide reasonable facilities and assistance [s.80(1A)]
Refer PR No. 7/2000 for details
  • Fine between RM1,000 and RM10,000 or imprisonment not exceeding 1 year or both
3. Incorrect returns or incorrect information on income affecting his own chargeability or the chargeability to tax of another person
[s.113(a) and (2)]
  • Fine between RM1,000 and RM10,000 plus penalty equal to twice the amount of tax undercharged [s.113(1)];
OR:
If no prosecution is initiated, tax payer is required to pay a penalty equal to the tax undercharged [s.113(2)]
4. Person who assists in the preparation of return of tax another person that results in an understatement of liability [s. 114(1A)]
  • Fine between RM 2,000 and RM 20,000 or imprisonment not exceeding 3 years or both [s.114(1A)]
5. Leaving Malaysia without settlement of tax [s.115(1)]
  • Fine between RM 200 and RM20,000 or 6 months’ imprisonment or both.
6. Obstruction of officers [s.116]
  • Fine between RM1,000 and RM10,000 or imprisonment for 1 year or both.
7. Breach of confidence by classified person [s.117(1)]
  • Maximum fine of RM4,000 or imprisonment for 1 year or both.
8. Offences by officials having an official function under the ITA 1967 [s.118]
  • Maximum fine of RM20,000 or 3 years’ imprisonment or both
9. Failure to comply with a notice:
  1. Calling for specific returns and production of books [s.78]
  2. Calling for bank statements, loan accounts, etc. [s.79]
  3. Requiring books, accounts or records that are kept to be translated in the national language [s.80(3)]
  4. Calling for information and particulars [s.81]
A public officer or an officer in the employment of a local authority or statutory authority shall not be obliged to disclose any particulars to which he is under a statutory obligation to observe secrecy.
  • Fine between RM 200 and RM20,000 or 6 months’ imprisonment or both [s.120(1)]
10. Failure to comply with a notice:
  1. Requiring the form of records to be kept and the form of receipts to be issued and the manner in which they shall be issued or retained [s.82(3)]
  2. Requiring accounts audited by a professional accountant to be produced [s.82(5)]
  • Fine between RM 300 and RM 10,000 or imprisonment for 1 year or both [s.119A]
11. Failure to comply with a notice:
  1. Requiring returns containing particulars of income to be submitted by agents [s.84(1)]
  2. Requiring returns by occupiers of land or premises situated in Malaysia [s.85]
  • Fine between RM 200 and RM20,000 or 6 months’ imprisonment or both [s.120(1)]
12. Failure to comply with a statutory order:

Requiring the form of records to be kept and the manner in which they shall be kept and the form or receipts to be issued or retained [s.82(3)]
  • Fine between RM 300 and RM 10,000 or imprisonment for 1 year or both [s.119A]
13. Failure to comply with a statutory order:

Requiring employer to prepare and deliver a return of its employees [s.83(1)]
  • Fine between RM 200 and RM20,000 or 6 months’ imprisonment or both [s.120(1)]
14. Failure to give notice by an employer:
  1. Of an employee who has commenced work for the employer [s.83(2)]
  2. Of an employee who is ceasing work for the employer [s.83(3)]
  3. Of an employee who is about to leave Malaysia for a period exceeding three months [s.83(4)]
  • Fine between RM 200 and RM20,000 or 6 months’ imprisonment or both [s.120(1)]
15. Contravention of the duty imposed under the Act [s.120 (1)d]:

By a person who fails to keep business records and issue receipts [s.82(1)]
 
  • Fine between RM 300 and RM10,000 or 1 year’s imprisonment or both [s.119A(b)]
16. Contravention of the duty imposed under the Act [s.120 (1)d]:
  1. By an agent acting for a non-resident who fails to submit quarterly returns [s.84(2)]
  2. By a precedent partner who fails to submit a partnership return [s.86(1)]
  3. By a chargeable person who fails to inform the DG of change of his address in Malaysia
  4. By a person who holds himself out as a tax agent and does not satisfy the provisions of the Act [s.153(1)]
  5. Failure to withhold dues of an employee upon his cessation of employment [s.107(5)]
  6. Failure to comply with a direction to deduct tax from emoluments and pensions [s.107]
  • Fine between RM200 and RM20,000 or 6 months’ imprisonment or both [s.120 (1)]
17. Contravention of the duty imposed under the Act [s.120 (1)d]:

Failure to furnish and estimate of:
  1. Tax payable for a year of assessment [s.107C(2)]
  2. Tax payable for a year of assessment which is not less than the revised estimate of tax payable for the immediately preceding year of assessment [s.107(3)
  3. Tax payable of a company commencing operation is to be made within three months of commencement of operations [s.107C(4]]
  • Fine between RM 200 and RM20,000 or 6 months’ imprisonment or both [s.120(1)]
18. Failure to keep or records [s.82(1)]
  • Fine between RM 300 and RM10,000 or imprisonment for 1 year or both [s.119A]
19. Failure to furnish information as required by the DGIR [s.39(1A)]
  • Fine between RM200 and RM20,000 or 6 months’ imprisonment or both [s.120(1)]

 
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