All Malaysians who earn an annual income of more than RM34,000 are obligated to file and pay taxes (if any), but you can tap into a variety of tax reliefs, deductions, and rebates to help you reduce the amount that needs to be paid. There’s a long list of reliefs that you may be eligible for, so this guide will help you with a bird’s eye view of all the reliefs available for YA 2023.
Now, why should you take the time to claim the tax reliefs that you are eligible for? After all the process can be quite tedious – especially if you’re doing this for the first time. The answer is quite simple: by claiming eligible tax reliefs, you reduce your chargeable income for that year, resulting in a possible surplus in the taxes deducted from you – meaning you’ll get a tax refund on the excess amount!
We’ve compiled all the different tax reliefs, deductions, and rebates that you can claim for YA 2023 here, for your convenience. Experienced taxpayers will find most of these details familiar, but the government has also updated certain tax benefits for the year, so be sure to go through them and avoid missing out on any reliefs that you’re eligible for!
To further simplify things for you, we’ve prepared an infographic on everything that you can claim for YA 2023 – which you can use as a quick checklist as you file your taxes. For the specifics of each tax incentive, meanwhile, simply scroll down further to read more.
In Detail: Tax Reliefs, Deductions & Rebates For YA 2023
This section is for those of you who want to find out more about the specific conditions and requirements that apply to each tax incentive. We’ll also briefly highlight what makes tax reliefs, deductions, and rebates different from each other (but if you want an in-depth explanation, head on to our explainer article here!)
Ready to check whether you’re truly eligible for the tax incentive that you wish to claim? Let’s dive in.
Part 1: Tax reliefs
Tax reliefs – which make up most of the tax incentives that you can tap into – are used to reduce your chargeable income (which determines the tax rate that applies to you). Read on for the full details of all the tax reliefs that you can claim for YA 2023:
1) Individual & dependent relatives
Claim: RM9,000
Automatically granted to an individual for themselves and their dependents.
2) Medical treatment, special needs, and carer expenses for parents
Claim: ≤RM8,000
This encompasses care and treatment by a nursing home, and non-cosmetic dental treatment. Note that non-cosmetic dental treatment here refers only to the following expenses:
- Tooth extraction
- Filling
- Scaling
- Cleaning
Teeth restoration and replacement involving crowning, root canal, and dentures cannot be claimed under this tax relief.
Also, note that your claims must be evidenced by a registered medical practitioner or written certification of a qualified carer (must not be taxpayer, or his/her spouse or child). Additionally, your parents must reside in Malaysia, and their treatments, too, must be provided within the country.
Note that for YA 2024, this tax relief will be expanded to include full medical examination for parents (with a sub-limit of RM1,000).
3) Husband/Wife/Alimony
Claim: ≤RM4,000
You can claim this tax relief if your spouse has no source of income, or if he/she opts for joint assessment in your name. It is also not allowed if your spouse has gross income exceeding RM4,000 derived from sources outside of Malaysia.
Meanwhile, husbands who are paying alimony to a former wife are permitted to claim the actual amount paid, or up to a maximum of RM4,000. Note as well that this RM4,000 deduction cap encompasses the payment for the wife who is living together with you, as well as the alimony payments made to a former wife.
4) Education fees in Malaysia
Claim: ≤RM7,000
Claim this tax relief for the amount spent on any of the following courses of study, provided that they are undertaken in a recognised institution or professional body of Malaysia (you can check at the Ministry of Higher Education Malaysia website here!):
To note, the tax relief for upskilling courses was initially limited to RM1,000 when it was first introduced for YA 2021, in a bid to encourage Malaysians to pick up new skills and improve their employability during Covid-19. This sub-limit was subsequently increased to the current RM2,000 for YA 2022, applicable until YA 2023. Under Budget 2024, the tax relief has been extended until YA 2026.
5) Medical expenses
Claim: ≤RM10,000 (in total)
If you’ve incurred any medical expenses that fall under the following categories, you can claim this tax relief:
This tax relief – which was previously set at RM8,000 in total – was increased to RM10,000 under the revised Budget 2023 by Prime Minister Datuk Seri Anwar Ibrahim. Along with this increase, the scope of this tax relief was also expanded to include assessments, early intervention programmes, and rehabilitation treatments for learning disabilities.
Remember to retain the receipts of your medical treatments, along with a copy of the certification of the registered medical practitioner for future reference!
For your future reference, this tax relief will be expanded in YA 2024 to cover dental examination and treatment expenses for self as well.
6) Lifestyle purchases for self, spouse, or child
Claim: ≤RM2,500
This tax relief can be claimed for the following lifestyle expenses:
- Books, journals, magazines, printed newspapers, and other similar publications in both hardcopy and electronic forms. Banned and offensive materials are excluded.
- Personal computers, smartphones, or tablets. Additional charges for warranty or devices used for the purpose of own business are excluded.
- Sports equipment for sports activities defined under the Sports Development Act 1997, including golf balls and shuttlecocks, as well as payments for gym membership. Motorised bicycles and club memberships that provide gym facilities are excluded.
- Internet subscription paid through monthly bill registered under your own name.
Note that under Budget 2024, this tax relief will be restructured for YA 2024 onwards to exclude the purchase of sports equipment and gym membership fees (which will be treated as a separate tax relief of its own, which you can read about right after this). Instead, it will be expanded to include fees for self-improvement courses.
7) Expenses related to sports activity for self
Claim: ≤RM500
Introduced in a bid to encourage a more active lifestyle among Malaysians, this specific tax relief covers the following expenses:
- Purchase of sports equipment for any sports activity as defined under the Sport Development Act 1997 (excluding motorised two-wheel bicycles)
- Payment of rental or entrance fees to sports facilities
- Payment of registration fees for sports competitions where the organiser is approved and licensed by the Commission of Sports under the Sport Development Act 1997
This tax relief is in addition to the general lifestyle tax relief of RM2,500 (mentioned in Part 6). To illustrate how this tax relief works, let’s say you purchased a sports equipment worth RM3,000 in 2023. You can first claim RM2,500 under the general lifestyle tax relief, and the remaining RM500 under this additional tax relief for sports.
For YA 2024 onwards, this sports tax relief will be increased from RM500 to RM1,000.
8) Purchase, installation, or rental of electric vehicles (EV) charging equipment
Claim: ≤RM2,500
This tax relief is claimable for the fees of purchasing (including hire-purchase), installing, and renting EV charging equipment. It also includes the subscription of the use of EV charging facilities.
This tax relief was introduced under Budget 2022, and is originally allowed only until YA 2023. Under Budget 2024, it has been extended to YA 2027.
9) Breastfeeding equipment
Claim: ≤RM1,000 per mother (only for women taxpayers)
Mothers who have purchased breastfeeding equipment for their own use to breastfeed their own child (aged 2 years and below) are entitled to claim this tax relief. Breastfeeding equipment that qualifies include:
- Breast pump kit and ice pack
- Breast milk collection and storage equipment
- Cooler set or bag
You can only claim this relief once every two years, and in the case of a combined assessment, this deduction is only allowed if the assessment is made in the name of the wife.
10) Childcare fees
Claim: ≤RM3,000
Parents with children aged 6 years and below can claim this tax relief for the childcare expenses that they pay to a registered childcare centre or kindergarten. It is capped at RM3,000 even if you have more than one child who is eligible under this tax relief.
Note that for married couples who are assessed separately, this tax relief can only be claimed by either one of the parents. Divorced couples, meanwhile, can both claim the tax relief, provided they made payments for the childcare fees of different eligible children.
You must support your claims for this tax relief with your child’s birth document and receipts from the childcare centre or kindergarten.
11) Net deposit in SSPN
Claim: ≤RM8,000 per individual with children
If you’re saving for your children’s higher education via the National Education Savings Scheme (SSPN), then you can claim this tax relief for the net deposit kept in SSPN, up to the RM8,000 limit allowed. Remember, the amount deposited must be under your children’s name!
Also, net deposit refers to the amount of savings that you still have after deducting any withdrawals that you have made during the year. As an example, let’s say you had a balance of RM4,500 brought forward from 2022 to 2023, and you made a deposit of RM2,000 but subsequently withdrew RM1,500. This means that the amount of tax relief that you can claim is only RM500 (RM2,000 – RM1,500); the balance brought forward (RM4,500) cannot be used to claim the relief.
If you have not been keeping track of all your SSPN deposits and withdrawals, though, no need to fret! SSPN will generate a tax document that shows you the net deposit you can claim for tax relief. It’s good form to cross-check, however, if you have retained records of your transactions.
12) Ordinary child relief (under age of 18)
Claim: RM2,000 per child
A deduction is allowed for every child who is unmarried and is below the age of 18 years at any time during the year of assessment.
13) Child (18+) in full-time education
Claim: RM2,000 or RM8,000 per child
A tax relief of RM2,000 is claimable for each child who is unmarried, 18 years of age and above, and receiving full-time education.
Meanwhile, a deduction of RM8,000 is allowed if the child is unmarried, 18 years of age and above, and satisfies any of the following conditions:
- In full-time education (other than matriculation/pre-degree/A-levels) at an education establishment in Malaysia
- Serving under articles or indentures to qualify in a trade or profession in Malaysia (apprenticeship)
- Pursuing a full-time degree (or equivalent, including Masters or Doctorate) outside of Malaysia
(UPDATED 5/4/2024): 14) Life insurance and Employees Provident Fund (EPF)
Claim: ≤RM7,000
This relief covers both your life insurance premium payments and EPF contributions, where you’re allowed to claim the following:
- Up to RM3,000: Life insurance premium/takaful contribution and additional voluntary contribution to EPF
- Up to RM4,000: Mandatory or voluntary contribution to EPF (or other approved schemes)
To note, this tax relief has been restructured slightly under Budget 2023 for YA 2023 and subsequent years, in a bid to encourage all Malaysians to save for their retirement. Prior to this, it was treated differently depending on whether you are a pensionable public servant or a private sector employee.
Pensionable public servants (who did not contribute to EPF voluntarily) were previously allowed to claim up to the full RM7,000 relief under life insurance premium payments and takaful contributions. Meanwhile private sector employees (who contribute to EPF) have always been restricted to the RM3,000 (for life insurance premium payments and takaful contributions) and RM4,000 (for EPF and other approved schemes) limit.
Another update to this tax relief as of YA 2023 is the expansion of the tax relief allocation for life insurance premiums, now to cover additional voluntary EPF contributions as well (allowed for all workers, both in formal or informal sector). This means that members who contribute both compulsorily and make voluntary contributions may now actually be able to claim the full RM7,000 tax relief for their EPF savings.
This initiative is meant to encourage more Malaysians to increase their retirement savings for old age, after the EPF signalled that many of its members simply do not have enough to tide them through their retirement period.
15) Private retirement scheme (PRS) and deferred annuity
Claim: ≤RM3,000
This tax relief is limited to RM3,000 for an individual, and RM3,000 for a spouse who has a source of income. Meanwhile, married couples who opt for joint assessment are restricted to RM3,000 deductions.
This tax relief has been provided since YA 2012, and has been extended until YA 2025 via several national budgets throughout the years.
16) Education and medical insurance
Claim: ≤RM3,000
You can claim this tax relief for the payment of insurance premiums that are related to education or medical benefits for yourself, as well as your spouse and child. It is limited to RM3,000 for an individual, and RM3,000 for a spouse who has a source of income. However, if you elect for joint assessment, the deduction allowed is restricted to RM3,000.
17) Social Security organisation (SOCSO)
Claim: ≤RM350
Your contributions to SOCSO can be claimed as relief during the year of assessment. Employees’ contributions via the Employment Insurance System (EIS) is also allowed.
18) Equipment for disabled self, spouse, child, and parent
Claim: ≤RM6,000
You’re entitled to this tax relief if you’ve purchased any necessary basic supporting equipment for yourself, as well as your spouse, child, and parents. Such equipment includes haemodialysis machines, wheelchairs, artificial legs, and hearing aids; spectacles and optical lenses are excluded.
Note that the disabled individual must be registered with the Department of Social Welfare.
19) Disabled individual
Claim: RM6,000
Disabled individuals are allowed to claim this tax relief, provided they have been certified in writing by the Department of Social Welfare.
20) Disabled husband/wife
Claim: RM5,000
Individuals with a disabled spouse are entitled to a further deduction under this tax relief.
21) Disabled child
Claim: RM6,000
Individuals with a disabled child who is unmarried can claim this tax relief.
22) Additional relief for disabled child (18+) in higher education
Claim: RM8,000
This is an additional tax relief provided on top of the RM6,000 relief allowed for those with a disabled child (mentioned above). If your child is unmarried (18 years of age and above), and meets the following conditions, you can claim this:
- In full-time education (other than matriculation/pre-degree/A-levels) at an education establishment in Malaysia
- Serving under articles or indentures to qualify in a trade or profession in Malaysia (apprenticeship)
- Pursuing a full-time degree (or equivalent, including Masters or Doctorate) outside of Malaysia
To clarify, this means you can get a total of RM14,000 tax relief for a disabled child if all the conditions are met.
Part 2: Tax deductions
While tax reliefs reduce your chargeable income, tax deductions reduce the amount of your aggregate income (your total income for the entire year). For YA 2023, the tax deductions allowed are as follows:
1) Donations to charities, sports activity, and approved funds/institutions
Deduction: ≤10% of aggregate income
If you’ve made donations that fall under these categories, then you’re allowed to deduct them from your aggregate income, up to the limit specified:
- Gift of money to approved institutions/organisations/funds
- Gift of money for any approved sports activity
- Gift of money or cost of contribution in kind for any approved project of national interest
- Gift of money in the form of wakaf to religious authorities or public universities or endowment to public universities
On top of these, the explanatory notes for YA 2023 by the LHDN still states that tax deductions will be given to donors who donate cash or contribution in kind for the fight against Covid-19, or to help those affected by the pandemic. If you have continued to make such donations, the tax deduction amount is also restricted to 10% of your aggregate income.
Just be sure to keep a record or a receipt of your donations as supporting documents!
2) Other donations, gifts, and contributions
Deduction: Up to value of gift, unless stated otherwise
You can enjoy tax deductions for the following situations (with varying limits):
- Gift of money to the government, state government, or local authorities
- Gift of artefacts, manuscripts, or paintings to the government or state government
- Gift of money for libraries (not exceeding RM20,000)
- Gift of money or contribution in kind for disability facilities in public places
- Gift of money or medical equipment to approved healthcare facilities (not exceeding RM20,000)
- Gift of paintings to the National Art Gallery or state art galleries
3) Membership subscription for professional bodies
Deduction: Membership subscription paid
You can claim the membership subscription fees paid to professional bodies for your profession/industry, such as medical or legal professional fees.
Part 3: Tax rebates
The third tax incentive that you can tap into is the tax rebates, which are calculated at the end of your tax form (BE Form for individuals who do not carry a business). This is after you’ve determined the amount of tax charged on your chargeable income, and it directly affects the amount of tax that you need to pay.
1) Tax rebate for self
Rebate: RM400
You can claim this rebate if your chargeable income (after tax reliefs and deductions) comes up to less than RM35,000.
2) Tax rebate for spouse
Rebate: RM400
Go ahead and claim this rebate if your chargeable income (after tax reliefs and deductions) is less than RM35,000, and you have been allowed the tax relief of RM4,000 for your spouse. A small condition though: your spouse must not have a source of income, or has elected for joint assessment in your name.
3) Departure levy rebate for umrah/religious travel
Rebate: Amount of departure levy paid
This rebate is allowed for any individuals who leaves Malaysia by air to perform umrah, or other kinds of religious pilgrimage but not for the purpose of performing hajj. Be sure to keep these documents to claim this rebate:
- Your boarding pass
- For umrah: A copy of the visa issued
- Other religious pilgrimages: Written verification by a religious body recognised by the Committee for the Promotion of Inter Religious Understanding and Harmony Among Adherents (JKMPKA), as well as Department of National Unity and Integration (DNUI) in the Prime Minister’s Department
You can only claim this relief for two trips in a lifetime.
4) Zakat/fitrah
Rebate: Zakat/fitrah paid
This rebate is applied to the payment of obligatory zakat and fitrah during the basis of the assessment year.
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We hope that these clarifications provided for the tax reliefs, deductions, and rebates for YA 2023 will be helpful in your tax filing process! If you have not, do take time to go through your receipts and spending from 2023 (especially big-ticket items!) to see which tax incentives you’re eligible for – while the process may take a while, it’s absolutely worth the effort.
Do also keep an eye out for our Income Tax Guide for YA 2023, which is coming out very soon! In it, we’ll take you through the whole tax filing process, step by step.
The post Everything You Should Claim As Income Tax Relief Malaysia 2024 (YA 2023) appeared first on RinggitPlus.
