TABLE OF CONTENT

No. Content. Pages.

01. Introduction 3
02. Content 4-21
03. Recommendation and Conclusion 22
04. References 23
Introduction

Tax relief or exemption is an incentive or preferential tax measure for certain taxpayers. Tax
relief in Malaysia are set by Inland Revenue Board of Malaysia (LHDN). Taxpayers in
Malaysia can receive some relief during the assessment year, where they can have a
deduction from their annual income. If the total tax relief amount exceeds gross income, the
excess does not carry over to the next assessment year. In this case, taxable income is zero,
meaning that the taxpayer does not need to pay income tax in the year of assessment.
Companies are not entitled to enjoy tax relief and rebates. Below is a list of tax relief in
Malaysia.

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Comparisons between: The latest tax relief in Malaysia (YA 2018) and YA 2013
PERSONAL RELIEF

YA 2018

YA 2013

Effective for YA 2018, the tax relief for self and dependent is RM 9,000 per year.

However, compare to YA 2013, although the tax relief for self and dependent is deducted
with the same amount as RM 9,000, but for the taxpayers who earn an income of up to RM
8,000 per month or the aggregate income of up to RM 96,000 annually, there will be a special
deductions of RM 2,000 given to the taxpayers and it is only applicable for YA 2013 and YA
2015.

DISABLED INDIVIDUAL
YA 2018

YA 2013

Effective for YA 2018 and YA 2013, if the taxpayer is a disabled person, he or she will be
given an additional deduction of RM 6,000 per year. Disabled person is defined in Section 18
to mean that any individual must certified in writing by the Department of Social Welfare to
be a disabled person.

By comparing YA 2013 with YA 2018, the amount of deduction for these two years are same.

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HUSBAND / WIFE RELIEF AND ALIMONY PAYMENT
YA 2018

YA 2013

Effective for YA 2018, the tax relief for taxpayer’s spouse who living together had increased
to a maximum of RM 4,000 per year and it is only applicable when the taxpayer has elected
for joint assessment with their spouse or the spouse has no source of income or total income.

Yet, with effect from YA 2017, if the husband or wife is receiving an oversea income that
exceeding RM 4,000 would result in the husband or wife not eligible to claim the relief.

Besides that, if the taxpayer made alimony payments to a former wife or made payments in
pursuance of a court order, a deed or a written agreement for separation, a maximum of RM
4,000 would be allowed to be deducted. However, the total deduction for wife relief and
alimony payments would be restricted to RM 4,000.

However, compare to YA 2013, the tax relief for husband or wife and alimony payments was
only maximum to RM 3,000.

DISABLED WIFE / HUSBAND RELIEF

YA 2018

YA 2013

Effective for YA 2018 and YA 2013, if the taxpayer’s spouse is a disabled person who
received a certification in writing by the Department of Social Welfare, he or she will be
given an additional deduction of RM 3,500 per year.

By comparing YA 2013 with YA 2018, the amount of deduction for these two years are same.

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CHILD CARE EXPENSES (6 YEARS OLD AND BELOW)
YA 2018

Effective for YA 2018, there is a new deduction of up to a maximum of RM 1,000 for child
care fees to a Child Care Centre registered with the Social Welfare under the Child Care
Centre Act 1984 or a Kindergarten registered under Education Act 1996. This relief is
claimable either by the husband or wife for their child who is 6 years old or below and must
be supported by the receipt issued by the child care centre or kindergarten.

Since this relief is effect from YA 2017, therefore, it does not available in the tax relief of YA
2013.

NORMAL CHILD RELIEF (BELOW 18 YEARS OLD)

YA 2018

YA 2013

Effective for YA 2018, the tax relief for normal unmarried child who is under 18 years old
has increase to RM 2,000 for each child. The children must be being a legitimate child of the
taxpayer or the spouse, a step child of the taxpayer or spouse or is a child that adopted by the
taxpayer or the spouse according with the specific law.

However, prior to YA 2013, the child relief was only RM 1,000.

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NORMAL CHILD RELIEF (18 YEARS OLD AND ABOVE)
YA 2018

YA 2013

Effective for YA 2018, for a taxpayer who is maintaining a normal unmarried child who is 18
years and above and the child is receiving a full-time education such as “A-level”, certificate,
matriculation or preparatory course, he or she will be given a deduction of RM 2,000 for each
child.

However, prior to YA 2013, the tax relief for it was only RM 1,000.

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NORMAL CHILD RELIEF (18 YEARS OLD AND ABOVE)

YA 2018

YA 2013

Effective for YA 2018, for a taxpayer who is maintaining a normal unmarried child who is 18
years and above and the child is receiving a full-time education at diploma level and above
qualification at any university, college or other establishment of higher education within
Malaysia or degree level and above outside Malaysia, he or she will be given a deduction of
RM 8,000 for each child. The course of studying and the institution must be recognised by
the Public Service Department of Malaysia.

However, prior to YA 2013, the tax relief for it was only RM 6,000.

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DISABLED CHILD RELIEF (AGE NO LIMIT)
YA 2018

YA 2013

Effective for YA 2018, the child relief for disabled child is RM 6,000 for each child and there
is no restriction on the number of child. Disabled person is defined in Section 18 to mean that
any individual must certified in writing by the Department of Social Welfare to be a disabled
person.

However, prior to YA 2013, the disabled child relief was only RM 5,000

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DISABLED CHILD RELIEF (18 YEARS OLD AND ABOVE)

YA 2018

YA 2013

Effective for YA 2018, for an unmarried disabled child with no age restricted, there is a
deduction of RM 6,000 will be given to the taxpayer and there is no restriction on the number
of children.

Yet, prior to YA 2013, the deduction that given to the taxpayer is only RM 5,000.

Besides that, if the child of the taxpayer is an unmarried 18 years old and above disabled
child who is undertaken a diplomas and above qualification in Malaysia or bachelor degree
and above outside Malaysia that is accredited by related Government authorities, an
additional deduction of RM,8000 will be given to the taxpayer. (Total deduction = RM
14,000)

However, compare to YA 2013, the additional deduction for an unmarried 18 years old and
above disabled child who still pursuing study was only RM 6,000. (Total deduction = RM
11,000)

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MEDICAL EXPENSES FOR PARENTS AND PARENTAL CARE

YA 2018

YA 2013

Effective for YA 2018, the tax relief for medical expenses for parents are limited to a
maximum of RM 5,000 per year. Medical expenses that are deductible are medical care and
treatment that provided by nursing home and dental treatment such as tooth extraction, filling,
scaling and cleaning but not included cosmetic dental treatment and the purchase of medical
equipment such as checking device for hypertension and diabetics. All of the claims must be
supported by a certified medical officer registered with the Malaysian Medical Council that
the medical conditions of the parents are requiring medical treatment or special carer. The
parents also must be resident in Malaysia and the medical treatment and care services must be
provided within Malaysia.

Yet, if the tax relief of medical expenses for parents are not claimed, the taxpayers can apply
for a deduction for parental care of up to a maximum of RM 1,500 for each one mother or
one father. There are some criteria to be fulfil in order to eligible to claimed for this
deduction. For example, the parents are the legitimate natural or foster parents that according
with the respective law (subject up to two persons). Besides that, the parents must be resident
in Malaysia, aged 60 years and above as well as the annual income of the parents must not be
exceeding RM 24,000 per year for each parent. This deduction can be shared with other
siblings by providing a total deduction claimed that does not exceed RM 1,500 for each
parent.

However, compare to YA 2013, there is only tax relief for medical expenses with the same
amount of restricted to RM 5,000 from tax payers’ annual income. Receipt to fulfil the claim
of relief is compulsory for medical expenses for parents but it is not required for parental care.

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MEDICAL EXPENSES ON SERIOUS DISEASES AND COMPLETE MEDICAL
EXAMINATION

YA 2018

YA 2013

Effective for YA 2018, a total deduction up to RM 6, 000 per year will be given to the
medical expenses on serious diseases and complete medical examination that incurred on the
taxpayers or on his spouse or child who is suffering from a serious disease. In order to fulfil
the claim, receipt and certification by a medical officer is required. Serious diseases that
included are the treatment of acquired immunity deficiency syndrome (AIDS), Parkinson’s
disease, cancer, renal failure, leukaemia and other similar diseases such as major organ
transplant and etc. Besides that, a deduction up to a maximum of RM 500 per year is
deductible for the complete of medical examination expenses.

For example, if the medical expenses on serious diseases of the taxpayer is RM 5,800. then
he or she only be able to claim a tax relief of RM 200 for medical examination.

However, compare to YA 2013, the tax relief of medical expenses for serious diseases is only
up to a limit of RM5, 000 but with the same amount of RM 500 for the complete medical
examination.

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BASIC SUPPORTING EQUIPMENT
YA 2018

YA 2013

Effective for YA 2018, the tax relief for the purchase of any basic supporting equipment for
himself or herself, spouse, children or parents who is a disabled person, the taxpayers can
claim a deduction with a limit up to RM 6,000 in a basis year. The basic supporting
equipment that are claimable includes haemodialysis machine, wheelchair, artificial leg and
hearing aid but not included optical lenses and spectacles.

However, prior to YA 2013, the tax relief for basic supporting equipment is only restricted up
to RM 5,000 in a basic year.

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SKIM SIMPANAN PENDIDIKAN NASIONAL ACCOUNT (SSPN)
YA 2018

YA 2013

Effective for YA 2018, for the taxpayers who are parents as well as guardians and legally
adoptive parents who have an SSPN-i account for their children, there will be given a
deduction of up to RM 6,000 every year on the net deposit that they deposited into the
account of Skim Simpanan Pendidikan Nasional. This Scheme is a saving scheme for
children’s education. By using the total deposit in the year of assessment minus total
withdrawal in the year of assessment, we can know that the amount of the net deposit.
Besides that, if the taxpayers have more than one children, the taxpayer and his or her spouse
can both claim this deduction to maximize their income tax relief.

By comparing YA 2013 with YA 2018, the amount of deduction for these two years are same.

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LIFE INSURANCE AND EPF
YA 2018

YA 2013

Effective for YA 2018, the tax relief up a maximum of RM 6, 000 will be given to the
taxpayer for life insurance and EPF. As the taxpayer is paid any premium for any life
insurance which included takaful insurance, making a contribution to an approved scheme
who he or she is recognized as an employee or as a self-employed person under the
Employees Provident Fund Act 1991 or making of any contribution under any written law
relating to widows’, widowers and orphans’ pensions as well as any approved scheme under
specific law, he or she will be eligible to claim this deduction.

By comparing YA 2013 with YA 2018, the amount of deduction for these two years are same.

CONTRIBUTION TO SOCIAL SECURITY ORGANIZATION (SOCSO)

YA 2018

Effective for YA 2018, a deduction up to a maximum of RM 250 will be given to the

taxpayer for the contribution made to the Social Security Organization (SOCSO) under the
Employees’ Social Security Act 1969.

Since this deduction is effect from YA 2016, therefore, it does not available in the tax relief
for YA 2013.

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PREMIUM ON DEFERRED ANNUITY AND PRIVATE RETIREMENT SCHEME
YA 2018

YA 2013

Effective for YA 2018, there is a deduction up to RM 3,000 will be given to the taxpayer who
paid any premium for deferred annuity or make a contribution to a Private Retirement
Scheme (PRS). Private Retirement Scheme is defined in Section 2 to mean a retirement
scheme approved by the Securities Commission in accordance with the Capital Markets and
services Act 2007.

Besides that, with the effect from YA 2014, a deferred annuity contracted on or after 1
January 2014 that issued by insurers under the Financial Services Act 2013 (Act 758) or
takaful operators registered under the Islamic Financial Services Act 2013 will be defined as
deferred annuity in Section 2 (1).

By comparing YA 2013 with YA 2018, the amount of deduction for these two years are same.

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INSURANCE PREMIUM FOR EDUCATION OR MEDICAL BENEFIT

YA 2018

YA 2013

Effective for YA 2018, the taxpayer who paid for any premium for insurance on education or
medical benefits for himself or herself, spouse, or children, there is an additional deduction of
up to RM 3,000 will be given to the taxpayer.

By comparing YA 2013 with YA 2018, the amount of deduction for these two years are same.

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EDUCATION FEES (FOR SELF IMPROVEMENT)

YA 2018

YA 2013

Effective for YA 2018, the tax relief for self-education fees had increased to the limit of RM
7,000 per year. This deduction will be allowed to individual on fee incurred for any course of
study up to tertiary level, degree at Masters or Doctorate level in an institution or professional
body that recognized by the Government of Malaysia or approved by the Minister of Finance
for the purpose of improving any skill or qualification included a degree at Masters or
Doctorate level undertaken for the purpose of acquiring law, accounting, Islamic financing,
technical, vocational, industrial, scientific or technological skills or qualifications.

However, for YA 2013, the tax relief for self-education fees is only restricted up to RM 5,000
per year.

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LIFESTYLE

YA 2018

YA 2013

Effective for YA 2018, a new lifestyle tax relief is available to the taxpayers who incurred
such expenses himself or herself, spouse or child at a maximum of RM 2500 every year.
However, this new lifestyle tax relief is not exactly new. It is actually the combination of a
few tax reliefs into one which are reading materials, computer and sports equipment. There
also include some new categories such as the purchase of printed newspapers, smartphones or
tablets, gym membership fees as well as internet subscriptions. Evidence receipt is required
to support this claim.

However, compare to YA 2013, tax relief for lifestyle is separate into three different
categories with different deductible amount. For the purchase of books, journals, magazines
and similar publications, the deduction is up to a maximum of RM 1,000 every year while for
the purchase of sport equipment for sport activities, the deduction is up to RM 300 every year.
Yet, for the purchase of personal computer, the deduction is only claimable by the taxpayers
once in every three years with a maximum of RM 3,000. Evidence receipt is required to
support this claim.

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Besides that, for YA 2013, only the taxpayers with a monthly income of RM 3.800 and above
would have the qualification to claim this lifestyle tax relief. However, for YA 2018, the
taxpayers with a monthly income of RM 3,600 and above are able to claim this deduction.

BREASTFEED EQUIREMENT
YA 2018

Effective for YA 2018, taxpayers who are new mothers with children of 2 years old or less
than 2 years old can get a new deduction of up to a maximum of RM 1,000 for breastfeeding
equipment such as breast pump kit and an ice pack, a breast milk collection and storage
equipment and a cooler set or bag. This deduction is only available once in every two years.

Since this relief is effect from YA 2017, therefore, it does not available in the tax relief of YA
2013.

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INTEREST
YA 2013

Effective for YA 2013, there is a deduction up to RM 10,000 for three consecutive years from
the first year the interest is paid to finance purchase the residential property. There are some
conditions need to be fulfil in order to be able to claim this deduction such as the taxpayer is
a citizen and a resident, it is limited to one residential unit, the sale and purchase agreement
must be signed between 10th March 2009 and 31st December 2010 and the residential
property is not for rent out purpose. This deduction is claimable by two or more individuals
for the same property and total interest paid by those individuals exceeds the allowable
amount for the year.

However, this deduction is not available for YA 2018.

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Recommendation & Conclusion

Based on the tax relief on lifestyle, it looks great that taxpayer able to get an additional RM
600 deduction over the three year, however, we found out that the amount of deduction is
quite low. Although there are many categories to claim for, but in the end the taxpayer is not
able to claim them all and there is a limitation of amount need to be consider. For example, if
the taxpayer had purchased a computer, smartphone or a tablet in the year of assessment, he
or she would be losing the chance to claim deduction on books, newspaper, sports equipment,
gym or internet subscription. Therefore, we recommend that the tax relief for lifestyle should
separate computers, smartphones and tablets from the relief by giving a limit amount of RM
3000 every year.

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 REFERENCES

http://mystarjob.com/articles/story.aspx?file=/2018/9/12/mystarjob_gettingthejob/201809121
12445&sec=mystarjob_gettingthejob

https://home.kpmg/xx/en/home/insights/2015/11/flash-alert-2015-134.html

https://help.payrollpanda.my/12465-malaysia-payroll-faq/what-kinds-of-tax-deductions-and-
rebates-can-be-claimed

https://www.hasilnet.org.my/income-tax/tax-relief/

https://1-million-dollar-blog.com/2013-income-tax-exemptions-deduction-rates-reliefs-
rebates/

https://www.imoney.my/articles/lifestyle-tax-relief-the-good-the-bad-the-ugly

https://www.comparehero.my/budgets-tax/articles/maximise-income-tax-relief

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