When it comes to filing income tax in Malaysia, understanding which items are claimable can make a significant difference in how much tax you ultimately pay. Many taxpayers often overlook deductions, resulting in them paying more than necessary. By being aware of the available income tax reliefs and rebates, you can legally reduce your taxable income and save money. Whether you are a salaried employee, a business owner, or self-employed, knowing your entitlements helps ensure compliance and efficiency in tax planning. Below is a comprehensive guide to income tax claimable items in Malaysia for individual taxpayers.
Understanding Income Tax Relief in Malaysia
Income tax reliefs are deductions that reduce your taxable income, leading to lower tax payable. The Inland Revenue Board of Malaysia (LHDN) updates these reliefs regularly, so it’s important to stay informed each assessment year. Reliefs can cover personal expenses, family-related costs, lifestyle spending, and contributions to government-approved funds.
Personal Reliefs for Individual Taxpayers
Personal reliefs apply to most taxpayers and are usually automatically included in tax filings. These are some of the key personal reliefs:
- Self and Dependent: RM9,000 per year for individuals with or without dependents.
- Disabled Individual: Additional RM6,000 if the taxpayer is a person with disabilities.
- Spouse Relief: RM4,000 for a non-working spouse, if the couple is not assessed separately.
- Spouse with Disability: Additional RM5,000 if the spouse is disabled.
Child-Related Reliefs
Parents can claim tax reliefs for their children, depending on the child’s age, education status, and other factors.
- Child below 18 years old: RM2,000 per child.
- Child over 18 in higher education: RM8,000 per child in college or university (local or overseas).
- Disabled child: RM6,000 per child, plus an additional RM8,000 if the child is pursuing tertiary education.
Lifestyle Tax Relief
The lifestyle relief allows claims for certain personal lifestyle-related expenses. This category helps encourage healthy living and digital literacy.
Claimable Lifestyle Items (Total: RM2,500)
- Purchase of books, journals, magazines, printed newspapers
- Sports equipment and gym membership fees
- Computers, smartphones, tablets purchased for personal use
- Internet subscription
Additional Lifestyle Relief (RM500)
This extra relief is available for purchases of lifestyle equipment made for the benefit of the taxpayer, spouse, or child specifically related to sports or fitness, such as bicycles or treadmill machines.
Education and Skill Development
Malaysia encourages lifelong learning through tax incentives for education. Taxpayers can claim for self-improvement and upskilling programs.
- Education Fees (Self): RM7,000 for approved courses related to acquiring or upgrading skills or qualifications.
- Kindergarten and Primary/Secondary Education Fees: Up to RM3,000 for each child attending registered institutions.
Medical Expenses
Healthcare is one of the more generous areas of tax relief. Various medical-related expenses are claimable under Malaysian income tax law.
Claimable Medical Expenses
- Medical expenses for serious diseases: RM8,000 (includes treatment for AIDS, cancer, kidney failure, etc.).
- Fertility treatment: Included under the same RM8,000 cap.
- Medical expenses for parents: RM8,000 if supported by receipts and medical practitioner confirmation.
- Full medical check-up: RM1,000.
- Vaccinations: RM1,000 (includes COVID-19, influenza, HPV, etc.).
- Disabled equipment: RM6,000 (for taxpayer, spouse, child, or parent).
Insurance and Retirement Savings
Malaysia also encourages financial planning through deductions for insurance and savings.
Claimable Contributions
- Life insurance and EPF: Combined relief of up to RM7,000 (split as RM3,000 for life insurance, RM4,000 for EPF).
- Private Retirement Scheme (PRS): RM3,000 for voluntary contributions to PRS.
- Education and medical insurance: RM3,000 for self, spouse, or child.
Donations and Gifts
Donations to approved charities and institutions are deductible, but only if they meet certain requirements set by the LHDN.
Approved Donations (Up to 10% of Aggregate Income)
- Donations in cash to government-approved institutions or relief funds
- Contributions to public libraries or public infrastructure
- Gifts of artefacts or manuscripts to approved museums
Tax Relief for Technology and Green Initiatives
Recent updates introduced tax relief for technology-related investments and environmentally friendly purchases.
- EV Charging Equipment: RM2,500 for expenses related to the purchase and installation of electric vehicle charging facilities.
- Energy-efficient appliances: Tax relief for solar panels or systems may apply if part of a green investment incentive.
Additional Claimable Items
Some less commonly known items can also be claimed:
- Breastfeeding equipment: RM1,000 every two years for mothers with children aged 2 years and below.
- Childcare centre and kindergarten fees: RM3,000 per year per child under age 6.
- Expenses for parental care: Up to RM1,500 per parent, if no other claims are made for medical expenses.
How to Maximize Your Income Tax Reliefs
To take full advantage of income tax claimable items in Malaysia, proper documentation is key. Keep receipts, invoices, and official statements organized throughout the year. Use digital tools or apps to track eligible expenses and store proof of payment.
Practical Tips
- Keep all receipts in a dedicated tax folder (physical or digital)
- Make full use of lifestyle reliefs by planning purchases
- Track your insurance premiums and EPF contributions
- Consult a tax advisor if your finances are complex
Filing Your Tax Returns
Once you have all your documents and receipts, you can submit your income tax returns online through the LHDN e-Filing system. Ensure you report all income sources and apply the correct reliefs to avoid penalties or audits. The deadline for filing individual tax returns in Malaysia is usually by April 30 (for non-business income) or June 30 (for business income).
Understanding and utilizing income tax claimable items in Malaysia can significantly reduce your tax liability. With a wide range of personal, family, lifestyle, health, education, and savings-related reliefs available, every taxpayer has the opportunity to legally and responsibly lower their tax burden. Keeping accurate records and staying up to date with LHDN’s yearly updates ensures you never miss out on valuable tax benefits. Make tax season less stressful by planning ahead and knowing exactly what you can claim.