Hello Grasshoppa,
We are months away from approaching 2025 & it is time for us to utilize our tax relief benefits. Tax reliefs are a great way for Malaysians to reduce their taxable income legally, thus paying less in taxes. However, many aren’t fully aware of the available reliefs & how to maximize them. Let’s break down some key tax reliefs you can leverage.
1. Lifestyle Relief
This includes expenses for books (e-book is not included), internet subscriptions, selected sports equipment, & gadgets like smartphones & tablets. You can claim up to RM2,500. If you’re already spending on these items, keep your receipts to claim this relief.
2. Medical Expenses
Medical expenses for yourself, your spouse, your parents, or your children can provide substantial tax relief. You can claim up to RM8,000 for serious illnesses & an additional RM1,000 for full medical check-ups. Preventive care like vaccination expenses can also be claimed.
3. EPF & Life Insurance
Contributions to the Employees Provident Fund (EPF) & life insurance premiums offer a combined relief of up to RM7,000. This is a straightforward way to reduce taxable income while securing your financial future.
4. Education Fees
If you’re planning to further your education, you can claim up to RM7,000 for fees related to master’s degrees, doctorates, & even professional qualifications. This relief is a great way to reduce taxes while investing in your personal development.
5. SSPN (Skim Simpanan Pendidikan Nasional) Contributions
If you’re saving for your child’s education through SSPN, you can claim up to RM8,000 in tax relief. This encourages you to invest in your child’s future while gaining tax benefits.
6. Donation & Charity Relief
Donations to approved institutions or government bodies can be claimed as tax relief. While there is no specific limit, it usually should not exceed 7% of your aggregate income. Ensure the donations are made to institutions that qualify for this relief.
How to Utilize These Reliefs Effectively
- Plan Your Spending: Align your yearly spending with available tax reliefs. For example, if you’re due for a medical check-up or planning to buy a new laptop, consider making these expenses within the tax year to claim the relief.
- Keep Proper Documentation: Always keep receipts & relevant documents for all claims. In case of an audit, having proper documentation ensures you can justify your claims.
- Combine Reliefs Where Possible: Some reliefs like lifestyle relief, cover multiple expenses under one category. Plan strategically to make the most of these combined reliefs.
Conclusion:
I always aim to maximize the income tax relief available to me each year, which has helped me claim thousands over time. One habit I stick to during tax filing season is submitting my return as soon as possible. By filing early, I can usually receive my refund within about two weeks. So, if you’re looking to get your refund quickly, just file as soon as you have your EA form.
OSS!
