It’s tax season again for Malaysians earning over RM34,000 for the Year of Assessment (YA) 2020. Tax residents can do so on the ezHASiL portal by logging in or registering for the first time.
If you’ve received your Income Tax Return (EA) Form, you may start filing your taxes now, up until the deadline on April 30, 2021.
This YA 2020, new tax reliefs have been introduced to lighten Malaysians’ financial and economic burdens brought on by COVID-19. Claiming these incentives can help you lower your tax rate and pay less in overall taxes.
Here’s LHDN’s full list of tax reliefs for YA 2020. Do note that everything you’re claiming for below must be supported by proof of documentation or receipt in the event of a tax audit.
Self, Parents & Spouse
1. Automatic Individual Relief: RM9,000
Every time you fill in the LHDN e-Filing form, you’ll be eligible for an automatic tax relief of RM9,000.
2. Further Education Fees (Self): ≤RM7,000
You can claim a tax relief of up to RM7,000 if you pay for your own further education courses in a recognised higher learning institution in Malaysia.
If you’re pursuing a Masters or Doctorate, any course of study is eligible. For undergraduate degrees or lower, only courses in law, accounting, Islamic financing, technical, vocational, industrial, scientific, or technology are claimable.
Medical Expenses For Parents: ≤RM5,000
If your parents have a medical condition requiring specific treatment proven by a certified medical practitioner, you can claim up to RM5,000.
It includes any expenses incurred to purchase equipment, care, or treatment for their condition. Your parents must also reside in Malaysia where treatment is provided locally too.
Healthy Elderly Parents: RM1,500 Per Parent
If your parents are healthy, you can also claim tax relief of up to RM3,000 (RM1,500 per parent) if they:
- Are your biological or legally adoptive parents;
- Are residents in Malaysia aged 60 and above;
- Were not claimed under the above mentioned parents’ medical expenses;
- Don’t have an aggregated annual income above RM24,000.
Each sibling has to divide the claimable amount equally when claiming for the same parent.
4. Spouses & Alimonies: RM4,000
Having a spouse with no source of income or who doesn’t earn enough to be taxable makes you eligible for a deduction limited to RM4,000.
This relief can also be made by husbands who pay an alimony to their ex-wife, but only if there are formal agreements to back this up.
5. Medical Expenses For Self, Spouse, Or Child: ≤RM6,000
You can claim tax relief of up to RM6,000 for yourself, your spouse, or children undergoing medical treatments for serious or difficult to treat diseases. Such illnesses include AIDS, Parkinson’s disease, cancer, chronic liver disease, leukaemia, heart attack, major organ transplant, etc.
For YA 2020, the cost of fertility treatment like IVF or IUI undergone by married couples has also been added to this category.
Under this category, up to an RM500 relief is dedicated to a full medical checkup for yourself, spouse, or child. Checkups need to be done at a medical institution registered with the Ministry of Health (MOH).
6. Lifestyle Purchases For Self, Spouse, or Child: ≤RM2,500
Tax relief of up to RM2,500 is claimable for purchases of lifestyle equipment for personal use by yourself, your spouse, or children. Items include:
- Reading materials like books, journals, magazines, printed newspapers, and other publications (e-newspapers excluded for now);
- Personal computer, smartphone, or tablet;
- Gym memberships and purchase of sports equipment;
- Internet bills under your own name.
7. Lifestyle Purchases For Tech: ≤RM2,500
You can claim an additional RM2,500 in lifestyle relief if you’ve purchased a personal computer, smartphone, or tablet between June 1 to December 31, 2020.
This was made available under the PERMAI Assistance Package to aid WFH and online schooling arrangements during the MCO.
8. Breastfeeding Equipment: ≤RM1,000
Breastfeeding mothers can deduct up to RM1,000 if you’ve purchased personal breastfeeding equipment for your child aged 2 years and below.
9. Childcare Fees: ≤RM3,000
Parents sending their children to a daycare centre or kindergarten can claim a tax relief limited to RM3,000. This amount was raised from YA 2019’s RM1,000 in this category.
The deduction can only be claimed by either the child’s mother or father if the couple chooses to file separately.
9. SSPN ≤RM8,000
The SSPN (Skim Simpanan Pendidikan Nasional) is a savings plan encouraging parents to invest in their children’s higher education.
Parents who’ve contributed can get a relief of up to RM8,000 for their annual net savings (total deposit in 2020 minus total withdrawal in 2020).
10. Unmarried Child Under Age 18: RM2,000
Parents can get a tax relief of up to RM2,000 for each unmarried child of theirs under 18 years old. If the parents are filing separately, this deduction can only be claimed by either the child’s mother or father.
Editor’s Update: We’ve edited the paragraph above to reflect a greater accuracy of information.
11. Child Aged 18 & Above Pursuing A Full-Time Education
Child Age 18 & Above In Pre-U Courses: RM2,000
RM2,000 can be deducted for parents with children aged 18 years and above undergoing preparatory courses such as foundation, A-Levels, matriculation, etc.
Child Age 18 & Above Pursuing Further Studies: RM8,000
A tax deduction of RM8,000 is claimable for parents with unmarried children aged 18 and above if they are a full-time student pursuing:
- A diploma or higher (excluding the above mentioned preparatory courses) in Malaysia;
- An undergraduate, Master’s, or Doctoral degree (or its equivalent) outside Malaysia;
- Any courses at institutions of higher learning recognised by the Ministry of Higher Education (MOHE).
Insurance & Investments
12. Life Insurance, EPF/Approved Scheme
Life Insurance For Retired Public Servants ≤RM7,000
Retired public servants receiving a pension can claim tax relief of up to RM7,000 for their life insurance premiums. However, those who fall under this group do not qualify for EPF contribution reliefs.
Employees’ Life Insurance: ≤RM3,000
Employees in the private sectors and public servants with no pensions are eligible for a tax relief of up to RM3,000.
Employees’ EPF: ≤RM4,000
These workers can also claim up to RM4,000 for their EPF contributions or other approved schemes. Such investments include self-contributions to EPF without employer input.
13. Deferred Annuity & PRS: ≤RM3,000
Making contributions in the deferred annuity scheme or the PRS (Private Retirement Scheme) makes you eligible for tax relief limited to RM3,000. This relief is only in effect from YA 2012 to 2021.
14. Education & Medical Insurance: ≤RM3,000
A tax relief of up to RM3,000 is claimable if you pay insurance premiums related to education or medical benefits for yourself, spouse, or child.
Contributions to SOCSO (Social Security Organisation) can be claimed as relief restricted to RM250 for that YA.
16. Equipment For Disabled Self, Spouse, Child, Or Parent: ≤RM6,000
Tax relief limited to RM6,000 is available for purchases of special support equipment for yourself, spouse, children, or parents who are disabled.
To qualify, disabled individuals would need to be registered with the Department of Social Welfare (JKM) and be certified as OKU.
17. Disabled Individual (Self): RM6,000
If you’re a disabled person registered with the JKM, you’re eligible for a further deduction of RM6,000 under this relief.
18. Disabled Husband/Wife: RM3,500
You’re entitled to an RM3,500 deduction if you have a disabled spouse.
19. Disabled Children
Disabled Child Relief: RM6,000
Parents with an unmarried child who’s physically or mentally disabled are eligible for a tax relief of RM6,000, regardless of their age. Children must also be certified by JKM to be a disabled person.
Disabled Child Aged 18 & Above Pursuing Higher Education: RM8,000
A further exemption of RM8,000 applies for an unmarried disabled child receiving a full-time education in Malaysia or overseas. This deduction is an add-on to the Disabled Child Relief if they are:
- Pursuing a higher education full-time for a diploma or higher in Malaysia;
- Undergoing a full-time Master’s or Doctorate course outside Malaysia;
- Serving under indentures or articles to qualify in a trade or profession in Malaysia.
Local Tourism Expenses
20. Domestic Travel Expenses ≤RM1,000
You can claim up to RM1,000 for domestic travel expenses if you stay at a registered hotel or purchase entrance fees to tourist attractions.
This scheme was employed to help stimulate the tourism sector under the Economic Stimulus Package 2020 and has been extended till December 31, 2021.
Failure to declare or file your Income Tax Return Form will subject you to an RM200 – RM20,000 penalty, imprisonment, or both.
If you’ve yet to do so or don’t know how, here’s a guide you can follow to register for your income tax for the first time.
- You can read more about what we’ve written on taxes here.
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