Claims for Personal Income Tax Relief Malaysia 2022 (YA 2021)

Let’s get this straight, we love filling our taxes every year in the hopes of getting a tax return. Refunds are the best gift to self. That being said, 2022 hasn’t been the easiest year, still, we do rely on tax deductions, tax reliefs and tax rebates that you can claim to reduce your aggregate income, chargeable income, and amount of tax charged respectively. 

This is why we’re all here today, so in the spirit of getting a tax refund, let’s break down everything you can and should claim for the income tax year of assessment 2021

Tax Reliefs

The Government of Malaysia is fairly reasonable, allowing us to get personal tax reliefs from lifestyle expenses such as gadgets and sports equipment to mandatory ones such as education and medical expenses for our parents and ourselves. There’s even a tax relief for alimony payments! For the full list of personal tax reliefs in Malaysia as of the assessment year 2021, read on!

1. Education (self)

claim allowed: Up to RM7,000

Claim for fees expended on any course of study undertaken in a recognised institution or professional body in Malaysia. Take a quick look at the recognised list of studies at the Ministry of Higher Education Malaysia’s website. This doesn’t apply to Masters or Doctorate degrees, those are free for all. 

For other tertiary level education undertaken for law, accounting, Islamic finance, technical, vocational, industrial, scientific or technological skills or qualifications will be eligible.

Note: This category of education tax relief in Malaysia is only applicable to the individual themself. The education tax relief for your children falls under Parenthood, which we will cover below.

2. Self, Parents and Spouses

  • Automatic Individual Relief
    Claim allowed: Up to RM9,000
    Granted automatically to an individual for themselves and their dependents.
  • Medical Expenses for Parents
    Claim allowed: ≤ RM5,000 or RM1,500 for one parent and RM1,500 for the other
    Claim for fees expended on any course of study undertaken in a recognised institution or professional body in Malaysia. Take a quick look at the recognised list of studies at the Ministry of Higher Education Malaysia’s website. This doesn’t apply to Masters or Doctorate degrees, those are free for all. For other tertiary level education undertaken for law, accounting, Islamic finance, technical, vocational, industrial, scientific or technological skills or qualifications will be eligible.Note: This category of education tax relief in Malaysia is only applicable to the individual themself. The education tax relief for your children falls under Parenthood, which we will cover below.
  • Husband/Wife/Alimony
    Claim allowed: ≤ RM4,000
    You can claim this relief if your spouse has no source of income or elects for a joint assessment in your name. This also includes any income from outside of Malaysia, they have to be dependent on you for this claim to be made.In the case of alimony paid to a former wife, the deduction is allowed for the amount of alimony paid or up to a limit of RM4,000. Only formal alimony agreements are allowed for this tax relief in Malaysia.

3. Medical (self)

Claim allowed: ≤RM6,000

Medical expenses for serious diseases pertaining to yourself, your spouse, child and/or fertility treatment for yourself or your spouse.

For yourself: 

The claim includes treatment of AIDS, Parkinson’s disease, cancer, renal failure, leukaemia, heart attack, pulmonary hypertension, chronic liver disease, fulminant viral hepatitis, head trauma with neurological deficit, tumour in the brain or vascular malformation, major burns, major organ transplant, and major amputation of limbs.

Be sure to get a receipt of the treatment and certification by a registered medical practitioner must be kept for future reference.

For your spouse:

The claim includes Intrauterine Insemination (IUI) treatment, In vitro fertilization (IVF), or any other fertility treatments on yourself or your spouse, including consultation fees and medicines. The claim must be evidenced by a receipt and certification issued by a registered medical practitioner and is eligible to married individuals only.

Complete medical examination for yourself, spouse, or child:

Refers to any medical examination as defined by the Malaysian Medical Council (MMC).

4. Lifestyle (self)

Personal expenses claim
Claim allowed: Up to RM2,500 for self, spouse, or child. For each benefit. 

Also known as lifestyle tax relief in Malaysia, this is the single person’s favourite category under the topic of Personal Tax Reliefs. As of the assessment year of 2021, in this category, you can claim for the purchase of:

  • Laptops, personal computers, smartphones or tablets. Please note that is for personal equipment only, additional charges for warranty or devices used for your businesses is excluded. 
  • Sports equipment for sports activities is defined under the Sports Development Act 1997. The extensive list of sports equipment eligible for tax relief in Malaysia includes golf balls and shuttlecocks, and payment for gym memberships. Motorised equipment, bicycles, treadmills and club memberships that provide the use of gym facilities are excluded in this claim. 
  • Books, magazines, journals and other similar publications both in hard copy and electronic forms (for all the kindle users). The claim is not valid for any banned and/or offensive materials. 
  • Internet subscriptions are paid through a monthly bill registered in your own name.

Claim allowed: Up to RM2,500 for yourself, your spouse and your child. 

A recent addition for the year of assessment 2021 where you can make another claim of up to RM2,500 for the purchase of laptops, personal computers, smartphones and tablets. This benefit has been extended to the 31st of December 2022. 

Remember this is an additional claim, so for example, if you bought yourself a new smartphone in 2021, you can make a claim for the first benefit. Then in the period stipulated, you purchased a tablet for your child, maybe for an online school, you can make a second claim for that second device. 

The same rules apply, you cannot make a tax claim for devices purchased for business purposes, nor does it extend to additional charges for warranty.

Discounts for PTPTN Payments

Effective from the 1st of November 2021 to the 31st of April 2022, the government is offering a discount scheme for PTPTN settlements

  • 15% discount on full settlement
  • 12% discount on 50% settlement of loan balance
  • 10% discount for those who enlist auto-debit or scheduled salary deduction payment.

Tourism in Malaysia from 1st of March 2020
Claim allowed: Up to RM1,000

Sooo, for those of you who went on a visit Malaysia tour sometime last year after covid hit, here’s a chance for you to make some money back. This means you can claim expenses spent on tourist accommodation charges and entrance fees to tourist attractions for individuals. Payment for this vacation needs to have been made between the 1st of March and 31st of December 2020 to qualify for this tax relief. 

Another rule to follow is that your accommodation must be registered with the Commissioner of Tourism. Click this link here to check if the hotel you were in is registered. 

5. Parenthood

  • Breastfeeding equipment
    Claim allowed: ≤ RM1,000 per mother allowed once every 2 years.
    Enjoy a tax relief on any personally purchased breastfeeding equipment for your personal use to breastfeed your child of fewer than 2 years of age. The product that you can make this claim for includes, breast pump kit and ice pack, breast milk collection and storage equipment; and cooler set or cooler bags.
  • Childcare fees
    Claim allowed: ≤ RM 3,000
    If you are a married couple assessed separately, only one parent can make this tax claim. This tax relief is allowed for childcare fees for children aged 6 and under registered with a childcare centre or kindergarten. You may only make this claim once regardless of the number of children you have.Previously at RM 1,000, this relief was adjusted to RM 3,000 as part of the Covid-19 pandemic aid.
  • Subsidy for baby car seat
    Claim allowed: 50% or up to RM150
    This claim is only applicable to B40 families for the purchase of car safety seats for babies.
  • Net Deposit for SSPN
    Claim allowed: ≤ RM 8,000
    Skim Simpanan Pendidikan Nasional (SSPN) or the National Educations Savings Scheme is a savings plan from PTPTN that enables parents to invest in their children’s higher education. Claims for this benefit is for the net deposit in SSPN up to the claim limit of your total deposit for the year 2020.
  • Child Relief
    Claim allowed: RM 2,000 per child
    A little relief for every child who is unmarried and below the age of 18 during the year of assessment.
  • Child (18+) in full-time education
    (A-levels, Australian Matriculation, etc.)
    Claim allowed: RM2,000 per child

    If you are looking after a child over the age of 18, who is studying but not quite in university. You are entitled to an education tax relief of RM 2,000 per child.
  • Child (18+) in tertiary education
    Claim allowed: ≤ RM 8,000 per child
    This particular education tax relief in Malaysia is especially for those with children who are currently unmarried, unemployed and are pursuing a tertiary education under your care.
    They must be, as of YA 2021:

    • Pursuing a full-time education at an educational institution in Malaysia
    • Serving under articles or indentures to qualify in a trade or profession in Malaysia
    • Pursuing a full-time degree (or equivalent, including Masters or Doctorate) outside Malaysia

6. Insurance and Investments

You should be glad to know that your monthly or annual commitments such as life and medical insurance, education insurance for your children and retirement schemes are also eligible for personal tax relief in Malaysia. As of YA 2021 –

  • Life Insurance and EPF for Public Servants.
    Claim allowed: up to RM 7,000 for life insurance for pensionable public servants; Up to RM 3,000 for life insurance and up to RM 4,000 for EPF of non-public servants.If you have purchased and are paying for life insurance on your own life and your spouse then you’d be eligible to make a claim under this relief. The same goes for contributions to approved schemes like the Employees Provident Fund (EPF).In addition to that, according to our Finance Minister, there will be an extension of the EPF minimum contribution rate from 11% to 9% until June 2022. This initiative which involved an allocation of RM2 billion is to increase cash on hand for all Malaysians.
  • Deferred annuity and Private Retirement Schemes (PRS)
    Claim allowed: Up to RM 3,000

    For both individuals and their spouse who has a source of income, the total deduction is RM 3,000 each. However, if you have elected for a joint assessment, the deduction is limited to RM 3,000 for both of you.
  • Education and Medical Insurance
    Claim allowed: Up to RM 3,000 for yourself, spouse or child

    Any insurance for the education and/or medical benefits of yourself, spouse or child garners a total deduction of RM 3,000 under this relief. If you and your spouse have elected to a joint assessment, the total deduction for both of you is RM 3,000, if not, then it can be claimed separately.
  • SOCSO
    Claim allowed: up to RM 250Your contributions to SOCSO/PERKESO (the Social Security Organisation) can be claimed as relief under this benefit. Where is this contribution you ask? Check your payslip, there is usually a contribution right after EPF. 

7. Relief for Disabled Persons

  • Purchase of equipment for disabled self, spouse, child or parent
    Claim allowed: Up to RM 6,000 for self, spouse, child or parentIf you have any expenses incurred from the purchase of basic needs such as the equipment used by yourself, spouse, child or parent, this is the claim for you. Take note, that the individual needs to have been registered with the Department of Social Welfare as a disabled person for the expenditure to qualify. Basic supporting equipment includes wheelchairs artificial limbs, hearing aids and haemodialysis machines. Equipment excluded are spectacles and optical lenses.
  • Disabled Individual
    Claim allowed: RM 6,000

    If you are a disabled individual certified in writing with the Department of Social Welfare, then you are eligible for a further deduction under this relief.
  • Disabled spouse
    Claim allowed: RM 3,500

    For those of you with a disabled husband or wife, you are entitled to another deduction under this relief. Of course, meeting the parameters of the Department of Social Welfare.
  • Disabled child
    Claim allowed: RM 6,000

    Just as with your spouse, if you have a disabled child, unmarried and in your care, you are entitled to this deduction under the relief as well.
  • Disabled child in tertiary education
    Claim allowed: RM 8,000

    This is a secondary benefit that you can only claim if your disabled child is unmarried, under your care, over the age of 18 and pursuing higher education under the following conditions;

    • In full-time education at an educational establishment in Malaysia (excluding A-levels, pre-university, and matriculation)
    • Pursuing a full-time degree or equivalent outside of Malaysia (including a Masters or Doctorate)
    • Serving under articles of indentures to qualify in a trade or profession in Malaysia.

Tax Deductions

To reduce the amount of your aggregate income, the sum of your total income for the year, enter in tax deductions. When filing your income tax for the year of assessment 2021 (Year 2022) you can deduct the following contributions from your aggregate income.

  1. Donations; to charities, sports bodies and other approved projects.

    Deduction allowed: Up to 10% of aggregate incomeAny donation that falls under any of these categories is restricted to 10% of your aggregate income.

    • Gifting of money to approved institutions/organisations/funds
    • Gifting of money for any approved sports activity
    • Gifting of money or absorption of cost or contribution in kind for any approved project of national interest
    • Gifting of money in the form of wakaf to religious authorities or public universities or endowment to public universities
  2. Other such donations, gifts, and contributions

    Deduction allowed: Up to value of gift unless otherwise statedWhat type of donations are we talking about here? Check out the list below;

    • Gifting of money to the government/state government/local authority
    • Gifting of artefacts, manuscripts, or paintings
    • Gifting of money not exceeding RM20,000 for libraries
    • Gifting of money or contribution in kind for disability facilities in public places
    • Gifting of money or medical equipment not exceeding RM20,000 to approved healthcare facilities
    • Gifting of paintings to the National Art Gallery or state art galleries

    Donations under these categories are not subject to the earlier 10% limit, but up to the value of the gift unless otherwise stated.

  3. Subscriptions to other professional bodies.

    Deduction allowed: Membership subscription paid

    Certain professions, lawyers, doctors and such do often subscribe to paid professional bodies, clubs if you will. The subscription paid to these bodies can be claimed as a deduction.

Tax Rebates

The thing we’ve all been waiting for. Income tax rebates are what is calculated at the end section of your BE form. Once you have filed all the relevant tax amounts charged on your chargeable income. A calculation is done to determine if you have tax to pay or are indeed eligible for a rebate. A tax rebate reduces the amount of tax charged, there are currently four types of tax rebates for income tax Malaysia YA 2021.

Tax rebate for Self

Rebate amount: RM400

If your chargeable income does not exceed RM 35,000 after the tax reliefs and deductions. You will be granted a rebate of RM400. This tax rebate is why most Malaysian fresh graduates or those in their first two years of work will not need to worry about income tax payments.

Tax rebate for Spouse (husband or wife)

Rebate amount: RM400

Let’s do a refresher if you and your spouse choose to conduct a joint assessment due to one of you not having an income, only then would you be able to consider this rebate. To be eligible, your chargeable income cannot exceed RM 35,000.

Departure levy rebate for umrah or religious travel

Rebate amount: The amount of departure levy paid, limited to 2 trips per lifetime

To anyone who leaves Malaysia by air to perform umrah or other kinds of religious pilgrimage excluding the pilgrimage for Hajj in YA 2021. You will need a copy of the visa issued by Saudi Arabia for the umrah and a written verification by a recognised religious body, as evidence to be eligible for this tax rebate.

Zakat/fitrah

Rebate amount: Zakat/fitrah paid

This is a rebate applied to the payment of obligatory zakat and fitrah during the year of assessment. 

Take full advantage of your Tax Refund 

The most important thing to note is that to maximise your tax refund you need to claim your tax incentives wherever you can, reducing how much you have to give up in taxes on your income. So get your filing in order and claim what is rightfully yours.

For a guide on how to set up your account and file your taxes online check out our article Income Tax Malaysia: A Definitive Guide

Sources:

  1. Tax Relief for Resident Individual, LHDN Malaysia
  2. Return form filing 2021, LHDN Malaysia

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