1. Tax Brackets #
Definition: Tax brackets are ranges of income that are taxed at different rates. As income increases, the tax rate applied also increases progressively.
Example in Malaysia (2024):
| Chargeable Income (RM) | Tax Rate |
|---|---|
| 0 – 5,000 | 0% |
| 5,001 – 20,000 | 1% |
| 20,001 – 35,000 | 3% |
| 35,001 – 50,000 | 8% |
| … | … |
💡 Each portion of income is taxed at the rate corresponding to that bracket.
2. Tax Rebates #
Definition: A fixed amount deducted directly from your tax payable (not from income), often based on eligibility like individual status, spouse, children, etc.
Common Tax Rebates in Malaysia:
| Type | Rebate Amount (RM) |
|---|---|
| Individual with income < RM35,000 | 400 |
| Spouse without income | 400 |
| Zakat/Fitrah paid | Full amount paid |
3. Tax Thresholds #
Definition: The minimum income level at which a person becomes liable to pay income tax.
Malaysia example:
- Individuals earning less than RM34,000 per annum (after EPF deductions) are not required to register or pay tax.
