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Individual income tax relief planning

Rising Global Consultants

Individual income tax relief

In Malaysia, tax residents can obtain certain reliefs in specific tax years to reduce taxable income and tax obligations.

To benefit from these reliefs, individuals must meet the conditions for each relief.

If the total relief amount exceeds total income, the excess cannot be carried forward to the next tax year.

For SMEs (companies/LLPs with paid-up capital below RM2.5 million), the income tax rate on the first RM500,000 of taxable income is 17%. If your personal effective tax rate is higher than 17%, paying tax under the company's/LLP’s income may result in tax savings. If your personal effective tax rate is below 17%, you might consider transferring income to be taxed under your personal name by paying director’s fees, compensation, etc. (subject to the tax deduction rules under the Income Tax Act).
Estimate tax liability
Joint Assessment: Applicable to married couples, where one spouse reports the income, and each person is entitled to a personal relief of RM4,000
Separate Assessment: Applicable to married couples, with each person entitled to a personal relief of RM9,000
Spouse with No Income or Tax-Exempt: Applicable when at least one spouse has no income or is tax-exempt
Single: Applicable to single taxpayers
Types of tax assessments

2024 Personal Income Tax Relief Details

(i) Personal Education Expenses RM7,000

  • Tuition fees for higher education or postgraduate level
  • Self-improvement courses (limited to RM2,000) [extended to 2026]

(ii) Spouse Relief or Maintenance RM4,000

  • Cohabiting partner with no income
  • Alimony paid to a former spouse (must have a formal agreement)

(iii) Insurance

  • Life Insurance RM3,000: Payment of life insurance premiums for oneself or spouse.
  • Social Insurance (SOCSO) + EIS RM350

(iv) Private Retirement Scheme (PRS) RM3,000

  • PRS and insurance premiums for private retirement plans
  • PRS tax relief has been extended until 2025

(v) Employees Provident Fund (EPF) RM4,000

  • Payment to personal EPF

(i) Child support

  • Sons and daughters under the age of 18 RM 2,000
  • RM 8,000 for an unmarried son or daughter over 18 years of age who meets the following criteria
    • Still in education, including full-time students, Pre-College, bachelor’s degree and above

(ii) Breastfeeding Equipment RM 1,000

  • Female taxpayers with children under age 2 only
  • This reduction can be used once every 2 years

(iii) Parenting classes or pre-school fees RM 3,000

  • Restricted to the taxpayer’s children under the age of 6
  • Childcare centers or kindergartens need to be registered with the Ministry of Social Welfare or the Department of Education

(vi) Savings Plan SSPN RM 8,000 [extended to 2024]

  • Net deposits made by a taxpayer to help a child into a state education savings plan account (SSPN)

(i) Parents’ medical expenses RM 8,000

  • Includes medical expenses, special nursing or care expenses
  • Complete Physical Examination (limited to RM 1,000) [Budget 2024]

**Tax relief for caring parents has been abolished**

 

(i) Education or medical insurance RM 3,000

  • Education and health insurance costs

(ii) Critical Care Medical Expenses RM 10,000

  • Included:
    • Includes the cost of fertility treatment for married couples
    • Full medical checkup (RM 1,000 only)
    • Vaccination Fee (RM 1,000 only)
    • Expenditure on children with learning disabilities (RM 4,000 only)
      • Autism
      • Attention Deficit Hyperactivity Disorder (ADHD)
      • Global Developmental Delay (GDD)
      • Mental retardation
      • Down’s syndrome
      • Specific learning disabilities, etc.
    • *Dental examination or treatment [Budget 2024].
      • Dentists registered with the Malaysian Dental Council
      • Individuals, partners or children are all welcome

(iii) Lifestyle RM 2,500

  • Books, journals, magazines, newspapers and other similar publications
  • Purchase a personal computer, smartphone or tablet
  • Payment of monthly internet subscription fees.
  • *Self-improvement courses
  • *Purchase of sports equipment(Expenses are deducted in the category of sports equipment)
  • *Subscribe to fitness membership fees (Fees are deducted in the exercise equipment category)

(iv) Sports Equipment RM 1,000 [Budget 2024]

  • Purchase of athletic equipment, the cost of renting/using athletic equipment, and the cost of registering for athletic competitions
  • Subscribe to a gym membership
  • *Exercise course fees

(v) Costs associated with electric vehicle (EV) charging facilities RM 2,500

  • Includes installation, rental, hire purchase of equipment or subscription costs. (Extended to 2027)

(i) Individuals with dysfunction RM 6,000

(ii) Partner is dysfunctional RM 5,000

(iii) Raising a dysfunctional child RM 6,000: Sons and daughters under 18 still in education

(iv) Purchase of basic aids for individuals, partners, children or parents with dysfunctions RM 6,000

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