Anything won or inherited need
not be declared to IRB
22/01/2006 Sunday Star BY SHANTINI SUNTHARAJAH
KUALA LUMPUR: Everyone hopes to win RM1mil in a lottery or big cash prizes
in a contest.
But how many stop to think if the taxman has the right to claim a piece of
According to a tax consultant here, only money considered as income earned
Cash won in newspaper contests, TV game shows and other competitions are
categorised as capital or windfall gain and need not be declared in a
person’s income tax return form.
“In Malaysia, only income earned is taxed unlike in other countries such as
the United States or Britain,” said the consultant.
“Anything you get through inheritance, luck or chance is considered a
windfall or capital gain and is not taxable.”
The consultant said that while one might choose to declare cash or prizes
won in a contest, those who didn't do so weren't committing a punishable
“Even if you do declare your prize, a conscientious tax officer at the
Inland Revenue Board would tell you that it is not necessary,” he said.
The consultant also said that Malaysian professional athletes who were
awarded big cash prizes, apartments or cars for their achievements were also
exempted from paying income tax on them.
The same applies for those who hold winning 3-D or 4-D tickets bought from
legalised gaming outfits.
A representative of the Malaysian Institute of Taxation said that lottery
winnings were generally not subjected to tax as they were considered as