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From 2008 onward , this amount cannot exceed 7% of your aggregate income. However Charitable donations that were made in 2007 are not subject to this limit. Tax deduction : Up to 7% of your aggregate taxable income can be reduced with this deduction. For Mr A : With his taxable income of RM 90000 , Mr A can make a donation of RM 6300 .This deduction results in a saving of RM 1512 ( RM 6300@24%)
9) Get Sporty
You will get a deduction of RM 300 for each year of assessment for the purchase of sports and exercise equipment for any sports activities defined under the Sport Development Act 1997 Tax Deduction : RM 300 per individual For Mr A : By buying RM 300 worth of sports equipment , Mr A makes a saving of RM 71 ( RM 300@24%)
13) Medical
Claim a deduction of up to RM 500 per tax year for a full medical examination and RM 5000 for medical expenses for yourself, spouse or child for serious disease. If you have also spent money on full medical in the same year, your claim will be reduce the RM5000 available for serious disease. A separate tax reduction of up to RM5000 a year is given for necessary basic supporting equipment for disabilities suffered by yourself ,spouse, children or parent Tax Deduction : RM 500 per individual for full medical check-up. RM5000 for serious diseases or basic supporting equipment For Mr A : He claimed for a full medical check-up .The deduction give him of RM 120 ( RM 500@24%)
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Invest in dividend-yielding shares if your tax bracket is above 26%. A new single-tier system was established under the national Budget for dividends received by shareholders. Companies pay tax of 26% (YA2008) and shareholders receive a net dividend that is exempt from tax and does not need to be filed with the IRB Shareholders who fall into higher tax brackets [higher than 26%] are essentially [getting a] saving on the difference. The single-tier dividends is intended to simplify the tax filing process for individuals, says Chua Tia Guan, executive director and head of tax and financial planning at Great Vision Wealth Management Sdn Bhd. In the past, refunds had been slow. From now on, there is no need to declare or apply for a refund. And as corporate taxes are falling, companies will be able to pass on more profits to their shareholders [in the form of dividends], he says
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However, not all companies will go under the single-tier system immediately as some of them might have imputation tax credits left, which they can use till 2013. Shareholders who receive dividends from companies using the imputation system will have to report the amount received and claim a tax refund if his personal tax rate is lower than the companys tax rate (27% in YA2007, 26% in YA2006). Shareholders can identify the system used by the company as it is stated in the dividend vouchers. Tax Deduction Your tax saving is the difference between your tax bracket and 26% (the corporate tax rate). This is only applicable to dividends given out by companies using the single-tier system.