Understand LHDN – Penalties Without a Notice
Some penalties are charged by LHDN without giving a notice or telling the concerned party. One of it falls under Section 107C(9) Income Tax Act, 1967.
Penalty S 107 C (9) is for the unpaid tax amount instalment, CP204 without a notification to the tax payer or tax agent.
The penalty would be 10% of the amount that is unpaid. It is the tax payer’s responsibility to pay the tax instalment on the 15th of every month.
Here is an extract from Income Tax Act, 1967, S 107 C(9);
“Where any instalment due to payable has not been paid by the due date or on the date specified by the Director General, the amount unpaid shall, without any further being served, be increased by a sum equal to ten percent of the amount unpaid, and that amount unpaid and the increase on the amount unpaid shall be recoverable as if it were tax due and payable under this Act.”
The LHDN system will automatically capture the penalty. There are no rules on the timing of when this penalty appears in the tax payer’s status.
LHDN will not send a tax status statement to the tax payer or tax agent on a regular basis. Further, the tax status statement is obtainable from the LHDN. This happens through a formal request by the tax payer or tax agent because of confidentiality.
Penalties without a notice can be avoided by paying within the deadline of the installment. Taxpayers must accomplish this on or before the 15th of each month.
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