Malaysia Income Tax Relief 2018

During tax season, most of us are scrambling to file our taxes. However, did you know you can reduce your taxes each year to a much lower amount? Besides the tax reliefs issued by the Inland Revenue Board of Malaysia (IRBM), there are also some tips and tricks you can take advantage of.

But what are tax reliefs?

It helps you, as a taxpayer, to reduce a certain percentage of money you spend on an array of things in a year from your total income.

You can get tax reliefs in Malaysia on a wide range of things—housing loan interests, sports equipment, breastfeeding equipment, education fees, and even for your medical insurance premium.

First, let’s dive into the individual income tax relief you’re eligible for.

Tax Reliefs for Resident Individuals in Malaysia (YA 2017-18)

Serial Number Individual Relief Types Amount (RM)
1 Self and dependent 9,000
2 Medical expenses for parents OR Parent Limited 1,500 for only one mother Limited 1,500 for only one father 5,000 (Limited) OR 3000 (Limited)
3 Basic supporting equipment for disabled self, spouse, child or parent 6,000 (Limited)
4 Disabled Individual 6,000
5 Education Fees (Self)
  • Other than a degree at Masters or Doctorate level-for acquiring law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications;
  • Degree at Masters or Doctorate level-for acquiring any skills or qualification
7,000 (Limited)
6 Medical expenses for serious diseases for self, spouse or child 6,000 (Limited)
7 Complete medical examination for self, spouse, child 500 (Limited)
8 Lifestyle:
  • Purchase of books journals, magazines, printed newspaper and other similar publications (except banned reading materials) for self, spouse or child;
  • Purchase of a personal computer, smartphone or tablet for self, spouse or child;
  • Purchase of sports equipment for any sports activity as defined under the Sports Development Act 1997 (excluding motorized two-wheel bicycles) and gym memberships for self, spouse or child; and
  • Payment of monthly bill for internet subscription
2,500 (Limited)
9 Purchase of breastfeeding equipment 1,000 (Limited)
10 Net savings in SSPN's scheme (total deposit in year 2017 minus total withdrawal in year 2017) 6,000 (Limited)
11 Child care fees to a Child Care Centre or a Kindergarten 1,000 (Limited)
12 Husband/Wife/Alimony Payments 4,000 (Limited)
13 Disabled Wife/Husband 3,500
14 Ordinary Child relief 2,000
15 Each unmarried child of 18 years and above who is receiving full-time education ("A-Level", certificate, matriculation or preparatory courses) 2,000
16 Each unmarried child of 18 years and above that:
  • Receiving further education in Malaysia in respect of an award of diploma or higher (excluding matriculation/preparatory courses).
  • Receiving further education outside Malaysia in respect of an award of degree or its equivalent (including Master or Doctorate).
  • The instruction and educational establishment shall be approved by the relevant government authority.
8,000
17 Disabled child (Additional exemption of RM8,000 disabled child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia, including bachelor degree or above outside Malaysia in programme and in Higher Education Institute that is accredited by related Government authorities) 6,000
18 Life insurance and EPF, including not through salary deduction 6,000 (Limited)
19 Deferred Annuity and Private Retirement Scheme (PRS) - with effect from year assessment 2012 until year assessment 2021 3,000 (Limited)
20 Insurance premium for education or medical benefit, including not through salary deduction 3,000 (Limited)
21 Contribution to the Social Security Organization (SOCSO) 250 (Limited)

Budget 2019, which was released in November 2018, included new changes to tax reliefs:

  • The Government will offer a Special Voluntary Disclosure Program to encourage taxpayers to voluntarily declare any unreported income.
  • The tax relief for your Takaful premium or life insurance and EPF contribution will be separated.
  • Your Takaful or life insurance premium payments will get an income tax relief of up to RM3,000.
  • Your EPF contributions or any approved pension funds will get an income tax relief of up to RM4,000.
  • Civil servants who are registered under the pension scheme will get a tax relief of up to RM7,000.
  • The tax relief for the he Skim Simpanan Pendidikan Nasional (SSPN) or National Education Savings Scheme has increased from RM6,000 to RM8,000.
  • Corporate income tax rate for SMEs has been reduced from 18% to 17% on the first RM500,000 of chargeable income. The balance income will continue to be taxed at 24%.

How to Claim More Income Tax Relief

Now that you know where you can claim tax relief, let’s look at different ways you can maximise them and pay lower taxes.

  1. Cut-off income

  2. In 2013, the Malaysia government said if your annual income is less than RM34,000 annually after all your EPF deductions, your income won’t be taxable.

    So, if you’re drawing RM2,800 or less each month as salary, you may need to only pay the bare minimum in taxes.

  3. Donations and gifts

  4. If you’re donating huge lump sums towards charitable, public, religious, or civic causes, you may be granted tax deductions from the government.

    However, to qualify for this particular tax deduction, you have to donate a substantial percentage of your income towards philanthropic causes.

  5. Lifestyle expenses

  6. You get a tax relief limit of RM2,500 on your lifestyle expenses. These include gym membership fees, internet subscriptions, buying printed newspapers, and purchasing smartphones and tablets.

  7. Education

  8. You can qualify for a tax deduction of RM5,000, especially if you’re pursuing higher education like a Masters or a Doctorate degree.

  9. Spousal support

  10. If you’re making alimony payments for your husband or wife, you’re eligible for a limited tax relief of RM3,000. And if you’re supporting a disabled spouse, you get a tax relief of RM3,500.

  11. Breastfeeding equipment

  12. If you’re a mother with children up to 2 years old, you’re eligible for a tax relief of up to RM1,000 on breastfeeding equipment every 2 years. Considering that good quality breastfeeding equipment is a little expensive, this tax relief is a lifesaver for new mothers and expecting mothers.

Next Article: Income Tax in Malaysia

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