Masters of Financial PlanningTaxation Planning

PERSONAL RELIEFS AND REBATES

By: Associate Professor Dr. GholamReza Zandi

zandi@segi.edu.my

Personal Reliefs

• Personal reliefs are deducted from total income of

an individual to arrive at chargeable income

• Reliefs are only given to resident individuals.

• Some reliefs are available only under joint

assessment (Example: spouse relief and disabled

spouse relief).

• A married woman may also claim these reliefs

unless she elects for joint assessment with her

husband.2

Relief for Self

• Resident individual given RM9,000

personal relief automatically.

• Also given to a wife who is assessed

separately.

• Full personal relief of RM9,000 given to a

deceased individual in the year of death i.e.

the relief is not apportioned on a time basis.

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Spouse Relief

• Available to husband when wife has no total income or when

wife elects for joint assessment.

• Wife can also claim for husband relief if he has no source of

income or elects for joint relief

• Maximum RM3,000 for spouse.

• Additional RM3,500 available if spouse is disabled.

• The relief is given either in full or nil. No apportionment of the

relief.

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Child Relief

• Relief RM1,000 for each child (below 18 years of age)

• RM5,000 for handicapped child (unmarried)

• RM4,000 for child 18 years or above and receiving fulltime

education at a university or college

• Wife who is living together with husband and assessed

separately may elect to claim for child relief.

• If wife claimed child relief in respect of a child, husband

cannot claim on the same child.

• However, divorced couple can share child relief based upon

formula: Child relief: 50 : 50.

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Medical Expenses for Parents

• Maximum of RM5,000 expended by taxpayer for his parents

(Sec 46(1)(c)).

• Covers both normal medical expenses and expenses to maintain

parents in nursing home.

• [From YA 2011 - includes ‘carer’ expenses provided by registered

foreign maid but not by spouse and or children)]

• Certified official receipt needed. Endorsement from a registered

medical practitioners to confirm that medical payment was made by

children.

• When the wife elects for joint assessment, the husband can obtain a

deduction for medical expenses incurred for “his” parents only.

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Insurance Premium and Contributions

• Maximum RM6,000 for insurance premiums and contributions to

approved schemes.

• Insurance premium must be paid to qualify for relief.

• Only individual’s obligatory contribution to Employment Provident

Fund and approved schemes qualify for relief.

• From YA 2012, contributions to Deferred Annuity Premium and/or

Private Retirement Schemes will be entitled to a maximum of

RM3,000 relief.

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Other Reliefs

• Basic supporting equipment restricted to RM 5,000

for himself ,wife, child or parent who is disabled.

• Disabled relief (additional) of RM 6,000 if taxpayer is

disabled.

• Course fees up to RM5,000 for pursuing any course

of study at Undergraduate/Masters/Doctoral level in a

Malaysian institution recognized by the Government.

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Other Reliefs (Cont’d)

• Serious disease relief up to RM5,000 for taxpayer, his wife or

child suffering a serious disease such as AIDS and Leukemia.

• Up to RM1,000 (with receipt) allowed for purchase of books,

magazines, etc. for own use, spouse or child.

• Taxpayer is given a relief of RM3,000 for a YA in respect of a

purchase (with receipt) of a personal computer in that YA. Relief

allowed once in 3 years. Each taxpayer i.e. the husband or wife

can claim the relief in separate assessments (the computer

purchased must be for private and not business use).

• RM3000 for insurance scheme premiums for education or

medical benefits.

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Other Reliefs (Cont’d)

• Up to RM300 given each year for purchase with

receipt of any sports equipment.

• Relief on Broadband Subscription fees up to

RM500 p.a.

• Relief for deposits made to the National

Education Savings Scheme is increased from

RM3,000 to RM6,000 with effect from YA 2012

to 2017

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Rebates

• A rebate is given as a deduction from the tax charged to arrive at

the tax payable.

• An individual who is resident in Malaysia is given the following

rebates for a YA, where the chargeable income does not exceed

RM35,000:

i. RM400 for an individual.

ii. Further RM400 if he has a wife living with him and she is not

separately assessed or if he is separated or divorced and

maintaining a wife.

iii. RM400 to a wife who is separately assessed, provided her

chargeable income does not exceed RM35,000. 11

Other Rebates

• Zakat, Fitrah or other Islamic dues to the appropriate religious

authority [sec 60A(3)]. Claims must be supported by official

receipts.

• Where the rebate exceeds the income tax payable for a YA, the

excess cannot be returned as a tax refunded nor is it available to

be carried forward as a credit to set off any future tax payable.

• The rebate is deducted before any sec 110 set off is given. Any

excess tax credit in terms of tax set off under dividend imputation

would be refunded to taxpayer.

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The End