As sure as the sun rises in the East, income tax season is once again upon Malaysians as March rolls around. Given that fact, it is crucial to keep in mind the income tax reliefs that you are eligible for when filing your taxes for the 2023 Assessment Year.
These can range from personal expenditures such as electronic or sporting goods purchases, to medical expenses incurred as a consequence of hospital admissions and even the purchase of insurance policies. Read on to discover which of your purchases from the past year can be deducted from your tax amount, based on the guidelines released by the Malaysian Inland Revenue Board (LHDN).
Individual income tax reliefs for Malaysians in the 2023 Assessment Year
Individual income tax relief
1. Relief for individual and dependent relatives: RM9,000
This amount is automatically granted to single individuals. An additional RM6,000 in relief will be granted for disabled single individuals registered with the Social Welfare Department (JKM).
2. Spousal relief: RM4,000
This relief is automatically granted if your spouse is unemployed and agrees to a joint tax assessment under your name. Disabled spouses gain an additional tax relief of RM5,000.
Divorced individuals still paying alimony to their former spouses will also be eligible for this relief.
3. Personal upskilling relief: RM7,000
This relief is granted to those who are currently self-financing their higher education. However, the course must adhere by the following criteria:
- Any postgraduate courses
- Undergraduate courses majoring in law, accounting, Islamic financing, technical, vocational, industrial, scientific, or technology
Those currently enrolled in any upskilling courses under the Department of Skills Development will only be eligible to claim a tax relief of RM2,000.
Income tax relief for individuals with children
1. Relief for children under 18: RM2,000
Those with children under 18 will automatically be entitled to this relief.
2. Relief for children over the age of 18: RM8,000
Those with children over 18 who are single and are full-time higher education students (diploma and above) will be entitled to this relief. However, those with children over 18 who are single but are unemployed will only be entitled to RM2,000.
3. Relief for nursery or kindergarten expenses: RM3,000
Parents who have sent their children to daycare nurseries or enrolled their children in registered kindergartens will be entitled to this relief.
4. Children with disabilities: RM6,000
Parents with disabled children with automatically be entitled to this relief. For those with disabled children over 18 who are single and are currently pursuing higher education study (diploma and above), this amount will increase to RM8,000.
Income tax reliefs for personal contributions and deductions
1. PERKESO contributions or other work insurance schemes: RM350
Those who are actively contributing to PERKESO or other similar workplace insurance schemes will be entitled to this relief.
2. Personal retirement and deferred annuity scheme contributions: RM3,000
Those contributing to personal retirement and deferred annuity schemes such as PRS will be entitled to this relief.
3. National Education Savings Scheme contributions: Up to RM8,000
Those who have made deposits to their National Education Savings Scheme accounts will be eligible for a tax relief of up to RM8,000.
4. Contributions to the Employee Provident Fund (EPF) and life insurance premiums: Up to RM7,000
Those contributing to their Employee Provident Fund (EPF) can claim a tax relief of up to RM4,000. Additionally, if you are also contributing to a life insurance policy, you may claim up to RM3,000 extra in tax reliefs.
5. Purchase of education or medical insurance for own self, partner, or child: Up to RM3,000
Those who have purchased an education or medical insurance policies for themselves, their partners, or their child, are eligible for a tax relief of up to RM3,000.
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Income tax reliefs for lifestyle and medical expenses
1. Medical expense relief: RM10,000
Those who have incurred medical costs can claim upwards of RM10,000 in tax reliefs. However, they must fit the following criteria:
- Expenses incurred from critical illness (whether self, partner, or child)
- Expenses incurred from fertility treatment (whether self or partner)
- Expenses incurred from COVID-19-related tests or treatments, both physical and mental. Capped at RM1,000
- Expenses incurred from vaccination (whether self, partner, or child)
- Expenses incurred from intellectual disability diagnosis assessments, early medical intervention, or rehabilitation treatments for children under 18 with intellectual disabilities. Capped at RM4,000
2. Expenses for the care of parents: RM8,000
Those who have spent money on medical treatment for special needs, or incurred expenses for the care of their elderly parents, are eligible for this relief. Capped at RM8,000
3. Lifestyle expenses: RM2,500
Lifestyle expenses such as the purchase of reading materials, personal electronic devices such as laptops, tablets, or smartphones, gym memberships, and sporting equipment, as well as the payment of monthly Internet plans, are eligible for this relief.
4. Additional expenses related to sports: RM500
Additional tax reliefs are available for those who have purchased sporting equipment, rented any sporting facility, or paid to register for any sporting competitions.
5. EV-related expenses: RM2,500
Those who have installed personal home-charging equipment, whether through a direct purchase or rental agreements, for their electric vehicles (EV) are entitled to this relief.
6. Expenses related to special life-support equipment: RM6,000
Those who have purchased life-support equipment, whether for personal use or their partner, child, or parents, are eligible for this relief.
7. Expenses related to breastfeeding equipment: RM1,000
Parents who have purchased breastfeeding equipment will be entitled to this tax relief.
A more detailed breakdown can be found on the Inland Revenue Board’s official website.
Feature and hero image credits: Nataliya Vaitkevich/Pexels, Tara Winstead/Pexels
This article first appeared on Lifestyle Asia Kuala Lumpur
