Easy Investment Income Tax Calculator Malaysia 2025 – Calculate in Seconds

Many individuals ask, "How do I calculate my investment income tax in Malaysia?" and search for a single, comprehensive "Malaysia Investment Income Tax Calculator." The truth is, a single, all-in-one calculator doesn't exist because the tax treatment for various investment types is not uniform.

The Malaysian Inland Revenue Board (LHDN) applies different rules and tax rates to different forms of investment income, from capital gains to dividends and rental income.

Instead of a single tool, a smart investor in Malaysia needs a solid understanding of the specific tax rules for each type of investment and then uses a general income tax calculator to compile the final figures. This guide will walk you through the key tax considerations for your investments and show you how to accurately estimate your tax liability.

How Do I Calculate Tax on My Investment Dividends in Malaysia?

This is a crucial question for anyone holding shares in Malaysian companies. The calculation for dividends has recently changed.

For individuals, here's what you need to know:

• Single-Tier Tax System: Until recently, dividends from Malaysian companies were generally tax-exempt for individuals under the single-tier system, where companies pay tax on their profits, and the dividends distributed are considered tax-free to the shareholder.
• The 2% Tax on High Dividends (Effective Year of Assessment 2025): A significant new rule has been introduced. If your annual local dividend income exceeds RM100,000, the portion of that income above the threshold will be subject to a 2% tax. This new rule is a key consideration for high-net-worth individuals and frequent traders.
• Exemptions: Not all dividends are subject to this new tax. Dividends from sources like Amanah Saham Nasional Berhad (ASNB), the Employees Provident Fund (EPF), and unit trusts are typically exempt, even if they exceed the RM100,000 threshold.

How to calculate: Sum up all your dividend income from all sources. If the total is over RM100,000, you will need to calculate the tax on the excess amount at 2%. This amount is then added to your total chargeable income.

Example Scenario: You received RM120,000 in dividends from various local companies.

• The first RM100,000 is tax-exempt.
• The remaining RM20,000 is subject to the 2% tax.
• Tax payable on dividends = RM20,000 x 2% = RM400.

Calculating Tax on Capital Gains from Investments

Another common question is, "Do I pay tax on selling shares in Malaysia?" The answer depends on the type of shares you sell.

• Real Property Gains Tax (RPGT): This tax is on the profit from the disposal of real property (land and buildings) and shares in a Real Property Company (RPC). RPGT rates range from 0% to 30%, depending on the holding period. This is a well-established tax and has its own specific calculator and reporting process (CKHT form).
• Capital Gains Tax (CGT) on Unlisted Shares: Starting January 1, 2024, a new 10% CGT was introduced for the disposal of unlisted shares in Malaysian companies by companies, limited liability partnerships, and other entities. For individuals, gains from the disposal of unlisted shares are generally not taxed unless they are classified as trading income.
• "Business of Trading" vs. "Investment": LHDN may consider your gains from selling listed shares as taxable business income if your trading activity is frequent, systematic, and resembles a business. This is a gray area, and it's best to consult a tax professional if you are a very active trader.

How to calculate: For unlisted shares subject to CGT, you calculate the net gain by subtracting the acquisition price and incidental costs (like brokerage fees and stamp duty) from the disposal price. The resulting net gain is then taxed at the relevant rate (e.g., 10% for companies).

This tool helps you calculate income tax without manual work

How to Calculate My Tax on Rental Income in Malaysia?

Rental income is a major source of investment earnings and is treated differently from other types of investment income. "How do I calculate the tax on my rental income?" is a frequent query from property owners.

• Gross vs. Net Income: You are not taxed on the gross rental income. Instead, you are taxed on the net rental income after deducting allowable expenses. This is a crucial distinction that can significantly reduce your tax bill.
• Allowable Expenses: LHDN allows you to deduct costs directly related to the maintenance and upkeep of the property.
  • Quit rent and assessment tax.
  • Interest on the housing loan.
  • Fire insurance premiums.
  • Maintenance fees and sinking fund contributions.
  • Repairs and maintenance costs to restore the property to its original condition (but not for renovations that enhance the property's value).
  • Cost of collecting rent (e.g., agent fees for securing a new tenant).

How to calculate:

1. Total Annual Rental Income: Add up all the rent you received in the year.
2. Total Allowable Expenses: Sum up all the deductible expenses.
3. Net Rental Income: Subtract the total expenses from the total income.
4. Final Calculation: Your net rental income is then added to your other sources of income (e.g., salary, business profit) and taxed at the progressive individual income tax rates.

Before making big investments, check your tax liability here

What about Other Investment Incomes?

• Interest Income: Interest earned from savings and fixed deposits in Malaysian licensed banks is typically tax-exempt for individuals. However, interest from non-traditional sources like Peer-to-Peer (P2P) lending or corporate bonds may be taxable.
• Unit Trusts: Income distributions from unit trusts are generally tax-exempt at the investor level, as the fund itself is taxed before distribution.

The Role of an Official "LHDN Tax Calculator"

While there is no single investment-specific calculator, the LHDN website offers official e-calculators for general income tax. These tools are invaluable for putting all your numbers together.

How to use it:

1. Input Your Income: First, you calculate the taxable portion of each investment income type using the rules above (e.g., your net rental income, the taxable portion of your dividends).
2. Add Other Income: Combine this with your employment or business income.
3. Enter Reliefs and Rebates: Input your personal reliefs (e.g., for self, spouse, children) and any tax rebates.
4. Final Tax Liability: The calculator will then apply the progressive tax rates to your total chargeable income to give you an estimate of the tax you need to pay.

A Word of Caution: These calculators are powerful tools for estimation, but they are not a substitute for professional tax advice. Tax laws can be complex and are subject to change. For complex portfolios or high-value transactions, it's always recommended to consult with a professional tax agent to ensure full compliance and optimize your tax position. By understanding these rules and using the right tools, you can confidently manage your investments and your tax obligations in Malaysia.