{"id":5135,"date":"2023-02-20T11:13:51","date_gmt":"2023-02-20T03:13:51","guid":{"rendered":"https:\/\/ancgroup.biz\/?p=3670"},"modified":"2023-02-20T11:13:51","modified_gmt":"2023-02-20T03:13:51","slug":"keep-sufficient-records-for-7-years","status":"publish","type":"post","link":"https:\/\/ancgroup.biz\/ms\/keep-sufficient-records-for-7-years\/","title":{"rendered":"Keep Sufficient Records for 7 Years: The Importance of Record Keeping for Income Tax Purposes"},"content":{"rendered":"<h2>Keep Sufficient Records for 7 Years: The Importance of Record Keeping for Income Tax Purposes<\/h2>\n<p>Under <a href=\"https:\/\/phl.hasil.gov.my\/pdf\/pdfam\/Act_53.pdf\">Income Tax Act 1967<\/a>, taxpayers are required to keep sufficient records relating to their business or operations income for at least 7 years from the end of the year of assessment.<\/p>\n<ol>\n<li style=\"list-style-type: none;\">\n<ol>\n<li>\n<h5>Who is required to keep records ?<br \/>\n<span style=\"font-size: 14px; font-weight: 400;\">Every person carrying on a business whether a sole proprietorship or a partnership is required to keep proper records.<\/span><\/h5>\n<hr \/>\n<\/li>\n<li><strong>What does keeping records involve ?<\/strong><br \/>\na) Setting up sufficient records for all business transactions<br \/>\nb) Maintaining the records throughout the year<br \/>\nc) Retaining the records for as long as necessary.<\/p>\n<hr \/>\n<\/li>\n<li><strong>Where should the records and books of accounts be kept?<br \/>\n<\/strong>Records and books of accounts relating to any business in Malaysia should be kept and retained in the place where the business is carried out.<\/p>\n<hr \/>\n<\/li>\n<li><strong>In what form should records be kept?<br \/>\n<\/strong>Records can be kept in manual or electronic form. However, if records are kept on an electronic medium such records should be readily convertible into readable format.<\/p>\n<hr \/>\n<\/li>\n<li><span lang=\"EN-US\"><span lang=\"EN-US\"><strong>Is it necessary to keep any supporting documents?<\/strong><br \/>\n<\/span><\/span>Supporting documents such as sales and purchases invoices, cash bills, bank statements, payment vouchers, pay-in slips, cheque butts, official receipts for payment etc. must be kept to support your expenses or claims.<\/p>\n<hr \/>\n<\/li>\n<li><strong>What types of records should be kept?<br \/>\n<\/strong><\/p>\n<div class=\"O0\">&#8211; A full set of books of accounts recording all your business transactions, receipts and payments.<\/div>\n<div class=\"O0\">&#8211; Invoices, vouchers, receipts and such other documents necessary to verify the entries in the books of account.<\/div>\n<div class=\"O0\">&#8211; Sales record<\/div>\n<div class=\"O0\">&#8211; Bank statements : Separate accounts for business and personal use should be maintained. If, for any reason, a separate account is not maintained for the business, a record should be kept to identify the transactions which are for business purposes.<\/div>\n<div class=\"O0\">&#8211; Stock take figures<\/div>\n<div class=\"O0\">&#8211; List of debtors and creditors (trade and non trade)<\/div>\n<div class=\"O0\">&#8211; Lists of assets and liabilities<\/div>\n<div class=\"O0\">&#8211; There are instances where assets and liabilities may be used for both business and private purposes such as:<br \/>\n&#8211; Motor vehicle \/ Shop premise \/ staff living quarter<br \/>\nIn such situations, a fair estimation of private use should be noted when the expenses are recorded.<\/div>\n<div class=\"O0\">a) Overdraft \/ Loan (interest restriction)<\/div>\n<div class=\"O0\">b) Depreciation schedules<\/div>\n<div class=\"O0\">c) Profit and Loss Statement and Balance Sheets<br \/>\nd) Any other document that confirms entries in your accounts (such as worksheets)<\/p>\n<hr \/>\n<\/div>\n<\/li>\n<li>\n<div class=\"O0\"><strong>Why is it necessary to maintain sufficient records for a period of seven years?<\/strong><\/div>\n<p>In accordance with<a href=\"https:\/\/phl.hasil.gov.my\/pdf\/pdfam\/3687.pdf\"> Section 82A (1) of the Income Tax Act 1967<\/a>, every person who is required to submit a return of their return of his income for a year of assessment shall retain and securely keep sufficient documentation for a period of seven years from the end of the year of assessment for the purposes of ascertaining his chargeable income and tax payable.<\/p>\n<hr \/>\n<\/li>\n<li><span lang=\"EN-US\"><strong>What happens if sufficient records are not kept?<\/strong><br \/>\n&#8211; Best judgement of the Director General and an assessment will be raised accordingly<br \/>\n&#8211; Offender upon conviction may be liable to a fine of not less than RM300 and not more than RM10,000 or to<br \/>\nimprisonment for a term not exceeding 12 months or both.<\/span><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<div class=\"mobiletextcenter\">\n<hr \/>\n<h4><strong><span style=\"font-size: 25px;\">ANC Group &#8211; Your Personal Tax Advisor<\/span><\/strong><\/h4>\n<\/div>\n<p>Tax consulting is the core service of ANC Group. Our tax professionals provide clients with comprehensive tax support and guidance. We offer tax consulting and compliance services for <a href=\"https:\/\/ancgroup.biz\/ms\/2019\/10\/07\/how-to-be-a-tax-resident-in-malaysia\/\">expatriates<\/a>, <a href=\"https:\/\/ancgroup.biz\/ms\/2019\/10\/07\/sole-proprietors-and-partnerships-taxes\/\">entrepreneurs<\/a>, and <a href=\"https:\/\/ancgroup.biz\/ms\/2019\/10\/04\/overview-of-malaysian-corporate-income-tax-under-sendirian-berhad-sdn-bhd-and-limited-liability-partnership-llp\/\">listed and non-listed companies<\/a>.<\/p>\n<p>Our tax consulting services include business tax, transaction tax, personal tax, and corporate income tax. We don\u2019t just guide you in interpreting and applying complicated taxation rules, but to explore new opportunities and business trends.<\/p>\n<p>We keep you abreast with Malaysia tax updates and any changes in the local regulations.<\/p>\n<p>We work closely with industry specialists, authorities, and associated professionals within ANC Group to provide the best-in-class integrated tax planning solutions. ANC specialists coordinate the accounting and taxation services to bring your business to success.<\/p>\n<p>[vc_btn title=&#8221;Get a Quote&#8221; color=&#8221;orange&#8221; size=&#8221;lg&#8221; link=&#8221;url:%23Footer|title:Footer||&#8221; el_id=&#8221;buttonGetQuoteTaxService&#8221;]<\/p>\n<p>&nbsp;<\/p>","protected":false},"excerpt":{"rendered":"<p>Keep Sufficient Records for 7 Years: The Importance of Record Keeping for Income Tax Purposes Under Income Tax Act 1967, taxpayers are required to keep sufficient records relating to their business or operations income for at least 7 years from the end of the year of assessment. Who is required to keep records ? Every [&hellip;]<\/p>","protected":false},"author":1,"featured_media":3728,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[17,33,42],"tags":[],"class_list":["post-5135","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment","category-publication","category-taxation"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Keep Sufficient Records for 7 years - Malaysia Taxation<\/title>\n<meta name=\"description\" content=\"Under Income Tax Act 1967, taxpayers are required to keep sufficient records relating to their business or operations income for at least 7 years from the end of the year of assessment.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ancgroup.biz\/ms\/keep-sufficient-records-for-7-years\/\" \/>\n<meta property=\"og:locale\" content=\"ms_MY\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Keep Sufficient Records for 7 years - 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