Kuala lumpur:<Text>

Individual taxpayers who receive the Instalment Payment Notice (CP500) will not face penalties in 2026, as announced by the Inland Revenue Board (LHDN).

According to BERNAMA News Agency, the government has approved a transition period for individual taxpayers with income from both salaries and non-salary sources, such as rent, interest, and royalties, regarding CP500 compliance for the assessment year 2026. During this transition, no penalties will be imposed if taxpayers choose not to pay the CP500 instalments. However, they are encouraged to make voluntary payments to mitigate their tax liabilities when filing income tax return forms.

The LHDN emphasized that taxpayers with solely salary-based incomes are not required to adhere to the instalment payment instructions. Nonetheless, it is advised that they update their income reporting in tax returns for the 2025 assessment year to avoid CP500 notices in the future.

For th ose wishing to amend their CP500 amounts, the LHDN has provided an option to use the CP502 form. Taxpayers can submit their first amendment based on estimated income and tax for 2026 by June 30, with a second amendment deadline set for October 31.

The LHDN urged taxpayers to report their incomes accurately in tax return forms to enhance efficient and organized tax management. The board also committed to reaching out to taxpayers to clarify any discrepancies in previous income reporting submitted in tax returns.