Income Tax Act 1967 · Section 103
LHDN late payment penalty: 10% + 5%.
Miss the income tax payment deadline in Malaysia and LHDN adds a 10% surcharge to your unpaid balance straight away. Still unpaid 60 days later? Another 5% on top. Here's exactly how it's calculated.
The penalty lives in Section 103 of the Income Tax Act 1967. It's automatic — there's no warning letter first, and it applies even if you filed your Form BE / B on time. Filing and paying are two separate things: you can do one right and still get penalised for the other.
Step 1 — the 10%. The day after the payment deadline, any tax you still owe is increased by 10%.
Step 2 — the extra 5%. If the balance (the original tax) is still unpaid 60 days after the deadline, LHDN adds a further 5%. That 5% is on the outstanding tax, not on the 10% surcharge — so the two don't compound on each other.
Worked example · RM 3,000 unpaid tax
So a RM 3,000 bill you ignore for two months becomes RM 3,450 — an extra RM 450 for nothing. The fix is simple: know the number early enough to set the cash aside.
Frequently asked questions
What is the LHDN penalty for paying income tax late?
Under Section 103 of the Income Tax Act 1967, the unpaid tax balance is hit with a 10% surcharge immediately after the payment deadline. If the balance is still unpaid 60 days after that, a further 5% is added on top.
Is the second 5% charged on the original tax or on the tax plus 10%?
The further 5% is charged on the tax amount that remains outstanding, not on the 10% surcharge. So on RM 1,000 of unpaid tax it's RM 100 (10%) then RM 50 (5%), for RM 150 in total penalties.
Does the late payment penalty apply if I filed on time but paid late?
Yes. Filing and paying are two separate obligations. You can file your Form BE / B on time and still be hit with the Section 103 penalty if you don't pay the balance by the deadline.
How can I avoid the LHDN late payment penalty?
Know your tax bill early so you can set the cash aside. MyTaxMate computes your liability the moment you log your income and reliefs, and counts down to the payment deadline — so there's no May surprise.
Don't get surprised in May. MyTaxMate computes your tax bill the moment you log income and reliefs, and reminds you before the payment deadline.
See how it works