- Tax-filing season has begun in Malaysia, and the task of trying to save money through claiming tax relief and rebates can be confusing.
- To help make things a little clearer, we run through the list of all items eligible for tax relief, with explanations for some of the more confusing entries.
It’s mid-March and we Malaysians are right smack in the thick of the tax-filing season.
For most of us, filing our taxes can prove to be messy and confusing no matter how many times we’ve gone through the process. From not knowing which category to when filing online, to missing out on claiming for rebates on tax-relief-qualified items, there are so many things to consider when filing for taxes.
Add to this the ever-present financial squeeze brought upon us by our short-term and long-term expenses, and the task of trying to save as much as we can while filing our taxes becomes a giant of an undertaking.
To that end, we’ve come up with a list of things that you can claim for tax relief to help you save a little bit of money, split into three categories with some of the more confusing entries explained.
First, you can learn how to start filing taxes here.
But before you start however, always remember to save your receipts and invoices for the following items.
1. Dependents & Disabilities
| Relief Type | Amount |
| Self and dependents Every taxpayer is entitled to a default relief of RM9,000. |
RM9,000 |
| Basic supporting equipment for disabilities (self, spouse, children, or parents) Covers equipment to aid with disabilities including wheelchairs and artificial legs. Does not cover spectacles and optical lenses. |
Limited to RM6,000 |
| Disability (individual) A deduction if your suffer from any disability. |
RM6,000 |
| Disability (wife or husband) A deduction for if your husband or wife is disabled. |
RM3,500 |
| Disability (child) An additional exemption of RM8,000 is available for disabled children above 18 years who are not married and/or pursuing further education programs. |
RM6,000 (plus possible additional RM8,000) |
| Husband, wife, or alimony payments Relief for married taxpayers with a non-earning spouse as long as they are jointly assessed, as well as relief for remarried taxpayers paying alimony to his former wife. |
Limited to RM4,000 |
| Child relief (per child) | RM2,000 |
| Unmarried children above 18 years old (per child) Each unmarried child of 18 years and above who is receiving full-time education (“A-Level”, certificate, matriculation or preparatory courses). |
RM2,000 |
| Unmarried children above 18 years old (per child) Each unmarried child of 18 years and above that: (i) is receiving further education in Malaysia in respect of an award of diploma or higher (excluding matriculation/preparatory courses). (ii) receiving further education outside Malaysia in respect of an award of degree or its equivalent (including Master or Doctorate). *All these are subject to approval by the relevant government authorities. |
RM8,000 |
2. Medical Expenses
| Medical expenses for parents Relief of RM5,000 is claimable for medical, special needs, or care expenses for your parents OR Parental tax relief If medical expenses for parents were not claimed, children are entitled to collectively claim up to a maximum RM1,500 for each parent (mother and father). |
RM5,000 (Medical expenses for parents) OR Limited to RM3,000 (Parental tax relief, split between each parent) |
| Medical expenses to treat serious diseases for yourself, your spouse, or your child Serious diseases include AIDS, Parkinson’s disease, cancer, renal failure, leukemia, and other similar diseases such as heart attack, pulmonary hypertension, chronic liver disease, fulminant viral hepatitis, head trauma with neurological deficit, brain tumour or vascular malformation, major burns, major organ transplant and major amputation of limbs |
Limited to RM6,000 |
| Complete medical examinations for yourself, your spouse, or your child | Limited to RM500 |
3. Lifestyle Purchases
| Self-education fees (i) Applicable to certificates, diplomas, bachelor’s degrees related to law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills. (ii) Also applicable to any course of study at a Master’s Degree or Doctorate level. (iii) Not applicable to scholarship holders (check with LHDN to clarify how this applies to you). |
Limited to RM7,000 |
| Lifestyle purchases These include purchases such as personal computers, published materials that are not banned, sports equipment and gym memberships, and monthly internet subscription bills. |
Limited to RM2,500 |
| Purchase of breastfeeding equipment | Limited to RM1,000 |
| Relief off net savings in Skim Simpanan Pendidikan Nasional (SSPN) The amount is equal to the total deposits in the year 2017 minus the total withdrawals in the year 2017. |
Limited to RM6,000 |
| Child care fees paid to a child care centre or kindergarten | Limited to RM1,000 |
| Life insurance and employee EPF contributions | Limited to RM6,000 |
| Deffered Annuity and Private Retirement Schemes (PRS) This is with effect from assessment year 2012 until assessment year 2021. |
Limited to RM3,000 |
| Insurance premiums for educational or medical benefits | Limited to RM3,000 |
| SOCSO contributions | Limited to RM250 |
4. Other ways to cut your payable taxes.
- Self and spouse rebates: If your income does not exceed RM35,000 a year, you’re eligible to receive a rebate of RM400. You can also get an extra RM400 if your spouse has no income.
- Decide if you and your spouse will be assessed jointly or separately: If both you and your spouse are current taxpayers, it might be worth sitting down and analysing whether or not it would be worth being assessed for taxes as a couple rather than as individuals. Depending on what sort of income the both of you are earning, there could be advantages to either option. The best way to know is to calculate your taxes using the calculator on Lembaga Hasil Dalam Negeri’s (LHDN) website.
- Ask for higher employee EPF contributions: Your EPF contributions are eligible for tax relief. If you don’t mind having not having a higher take-home monthly salary, you can request for your employer to bump your monthly EPF contributions to the maximum 11%.
- Zakat and Fitrah: Muslims who pay for Zakat or Fitrah will be eligible to get tax rebates based on the amount paid.
- Tax-free income: This income refers to any sort of income that is exempt from taxes. An example of this is the Private Retirement Scheme (PRS) available from many banks locally that essentially allows Malaysians to contribute voluntarily to a savings scheme to plan for retirement.
###
In today’s economy, every single cent counts. And while it may be a tiresome task to know where you can save on taxes, the amount you could potentially accumulate at the end of the day could and should be ultimately worth the effort.
Feature Image Credit: Artists Network
