The tax season in Malaysia has begun. If you’re like most taxpayers, your top priority right now is to start learning about all the tax reliefs, deductions, and rebates that you’re qualified for in order to pay less tax. (Trust us; all Malaysian taxpayers are forced to perform this annual rite; indeed, everyone on the planet.)

 

Let’s get started! The goal of this post is to offer you a comprehensive review of everything you can claim to maximise your tax refund according to LHDN. But made simple for your consumption.

 

YA 2022: Tax Reliefs, Deductions & Rebates In Detail

 

This section is for you if you’re seeking clarity on the details of each tax relief, deduction, or refund because, as is to be expected, many of them have requirements and conditions that must be met in order to be claimed.

Continue reading to verify your eligibility for the reliefs, deductions, and rebates you intend to claim. 

It’s important to note that tax reliefs, deductions, and rebates are three separate mechanisms designed to assist you in lowering your overall income, chargeable income, and amount of tax charged, respectively. This will allow you to benefit from a lower tax rate and pay less in taxes overall.

If you need a guide on How to File your taxes with MyTax we have an article on that too!

 

Tax Reliefs 

Tax reliefs help reduce your chargeable income. This could affect the income bracket on which your taxes will be calculated based on. Let’s say you made RM60,000 in 2022. Applying the reliefs reduces that amount. Instead of paying tax based on the brackets and the rate of your gross income, you might find yourself having a lower “taxable income”.

 

1) Individual & dependent relatives

Claim: up to RM9,000

It is granted to an individual for themselves and their dependents.

 

2) Medical treatment, special needs, and carer expenses for parents

Claim: Up to RM8,000

Includes non-cosmetic dental care as well as nursing home care and therapy. A licensed medical professional or written certification from a certified caretaker (who should not be the taxpayer, his/her spouse, or child) must be provided as proof. Parents must live in Malaysia, where they must also receive treatment.

This tax break’s upper limit was initially set at RM5,000, however, in YA 2021 it was increased to RM8,000. The Inland Revenue Board (LHDN) also eliminated a sub-category of this tax relief in the same assessment year that permitted people to claim RM1,500 for each parent (RM3,000 for both parents) even if they did not submit a claim for medical care for their parents.

 

3) Husband/Wife/Alimony

Claim: Up to RM4,000

This tax relief is only applicable if your spouse has no source of income, or if he/she opts for a joint assessment in your name. You cannot claim this relief if your spouse has a gross income exceeding RM4,000 derived from sources outside of Malaysia.

If you’re a husband paying alimony to an ex-wife, the deduction is allowed for the amount of alimony paid or up to a limit of RM4,000. Note as well that the total deduction for a wife living together and alimony payments to a former wife is also capped at RM4,000. Only formal alimony agreements qualify for this tax relief (voluntary alimony payments under a mutual agreement do not qualify).

 

4) Education fees in Malaysia

Claim: Up to RM7,000

You can claim this tax relief for the amount spent on a course of study undertaken in a recognised institution or professional body within Malaysia and must be listed by the Ministry of Higher Education Malaysia. 

 

Education level	Eligible courses of study
Masters or Doctorate	Any course of study undertaken is eligible
Other than a Master’s/Doctorate	Any course of study up to tertiary level undertaken for law, accounting, Islamic finance, technical, vocational, industrial, scientific, or technical skills or qualifications is eligible
A course of study undertaken for up-skilling (sub-limit of RM2,000)	Any skill areas recognised by the Director General of the Department of Skills Development under the National Skills Development Act 2006 (Act 652)

 

This sub-limit for upskilling was increased for YA 2022, and the deduction is currently allowed until YA 2023.

 

5) Medical expenses

Claim: Up to RM8,000 (in total)

You can claim tax relief for the following categories of medical expenses;

 

Expenses	Claim limit	Details
Medical expenses on serious diseases for self, spouse, or child	Up to RM8,000 in total (inclusive of medical expenses for fertility treatment, vaccination expenses, as well as complete medical and mental health examination)	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 brain or vascular malformation, major burns, major organ transplant, and major amputation of limbs
Medical expenses for fertility treatment for self or spouse	Up to RM8,000 in total (inclusive of medical expenses for fertility treatment, vaccination expenses, as well as complete medical and mental health examination)	– Includes intrauterine insemination (IUI) treatment, in vitro fertilisation (IVF), or any other fertility treatments on yourself or your spouse (including consultation fees and medicines) – Only married individuals are eligible
Vaccination expenses for self, spouse, or child	Up to RM1,000 (included in the overall RM8,000 tax relief allowed under this category)	Includes vaccination for pneumococcal, human papillomavirus (HPV), influenza, rotavirus, varicella, meningococcal, tetanus-diphtheria-acellular-pertussis (TDAP combination), and coronavirus disease 2019 (Covid-19)
Complete medical and mental health examination for self, spouse, or child	Up to RM1,000 (included in the overall RM8,000 tax relief allowed under this category)	– Refers to a thorough examination as defined by the Malaysian Medical Council (MMC) – Includes Covid-19 detection tests (e.g. PCR and RTK tests) and vaccination expenses – Includes mental health examination by registered psychiatrists, clinical psychologists, and counsellors

 

The tax break for mental health exams was announced as part of Budget 2022, at which point the government acknowledged that Covid-19 had a detrimental effect on people’s mental health as a whole, in addition to the economy. As a result, this tax break is meant to help people who require professional assistance.

Also, it’s crucial that you save the invoices for your medical care as well as the certified doctor’s certification for future use.

 

6) Lifestyle purchases for self, spouse, or child

Claim: Up to RM2,500

This tax relief applies to the following expenses:

 

• Books, journals, magazines, printed newspapers, and other similar publications in both hardcopy and electronic forms; banned and offensive materials excluded.
• Personal computers, smartphones or tablets; additional charges for warranty or devices used for your business are excluded.
• Sports equipment for sports activities defined under the Sports Development Act 1997, including golf balls and shuttlecocks, and payment for a gym membership. Motorised bicycles and club memberships which provide gym facilities are excluded.
• Internet subscription is paid through a monthly bill registered under your name.

 

7) Expenses related to sports activity for self

Claim: Up to RM500

This tax relief is allocated specifically for sports-related expenses to encourage a more active lifestyle among Malaysians, take note that it is separate from a gym membership, which is also healthy for the Malaysian lifestyle. This tax break covers the following;

• Purchase of sports equipment for any sports activity as defined under the Sports 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 Commissioner of Sports under the Sports Development Act 1997

This tax break is offered in addition to the previously indicated general lifestyle tax relief of RM2,500. According to the calculation, if you spent RM3,000 on sports equipment in 2022, you would first claim RM2,500 under the general lifestyle tax relief before claiming the final RM500 under this supplementary relief designed exclusively for athletes.

 

9) [Special] Purchase of personal computers, smartphones, or tablets for self, spouse, or child

Claim: Up to RM2,500

This additional lifestyle respite was initially planned to complement work-from-home (WFH) arrangements and was first announced for YA 2020. It was first valid from 1 June to 31 December 2020, and then it was again extended to 31 December 2021 and 31 December 2022.

If you’re still unclear about how it works, here’s an example from LHDN to show how this tax relief can be added to the RM2,500 general lifestyle tax deduction: Let’s say you spend RM2,000 on a smartphone in March 2022 and RM4,000 on a laptop in July 2022. As a result, you are eligible to use this special tax relief to claim up to RM2,500 for the cost of the laptop. In the meantime, you can claim RM2,000 for the smartphone and an additional RM500 from the general lifestyle tax exemption.

 

10) [Special] Tourist accommodation, attractions, or tour package

Claim: Up to RM1,000

Another additional relief was introduced during YA 2020 to support Malaysia’s domestic tourism and travel industry during the pandemic. Like the special tax relief for the purchase of selected electronics to boost work-from-home arrangements, it was also extended twice: first to cover YA 2021, then YA 2022 as well (expenses made until 31 December 2022).

You could claim this tax relief for the following domestic tourism expenses:

• Accommodation at premises registered with the Commissioner of Tourism (hotels are good to go, but it may not apply to selected bed&breakfast(s))
• Entrance fees for tourist attractions (National Museum, KL Bird Park, etc.) 
• Purchase of domestic tour package through licensed travel agents, inclusive of fees for tour guide services, purchase of local handicraft products, F&B, and transportation (not the ride-sharing kinds, but definitely the Hop-on-Hop-off buses)

 

11) Breastfeeding equipment

Claim: Up to RM1,000 per mother

You can claim this relief if you are a breastfeeding mother and have purchased breastfeeding equipment for your personal use to breastfeed your child (aged 2 years and below). This claim is limited to once every 2 years only. 

Breastfeeding equipment that qualifies includes:

• Breast pump kit and ice pack
• Breast milk collection and storage equipment
• Cooler set or bag

 

12) Childcare fees

Claim: Up to RM3,000

You are eligible to get this reimbursement if you have paid kindergarten or childcare costs for a kid who is 6 years old or younger. Even if you have more than one child who qualifies for specialised care, the maximum amount is RM3,000.

If you’re a married couple and are assessed separately, this relief can only be claimed by either party who makes the expenditure. Divorced couples, meanwhile, can both claim the tax relief, provided they made payments for the childcare fees of different children. Claims made under this category must be evidenced by the child’s birth document and receipts from the childcare centre or kindergarten.

The maximum limit of this relief used to be set at RM1,000 but was increased to RM3,000 as part of the government’s Covid-19 economic recovery programme.

 

13) Nett deposit in SSPN

Claim: Up to RM8,000 per individual with children

This relief is available for the nett deposit made by parents into the National Education Savings System (SSPN) for their children’s higher education, up to the claim restriction.

In order to be clear, the net deposit is the amount of savings that is left over after subtracting any withdrawals you may have made over the year. You are only permitted to deduct RM500 tax relief, for instance, if your SSPN account had a balance of RM4,500 brought forward from 2021 to 2022, and you afterwards deposited RM2,000 and later withdrew RM1,500 throughout the year (RM2,000 – RM1,500). The brought-forward balance (RM4,500) won’t be considered.

If you are unsure where to find this information, SSPN will kindly generate a tax document that shows you the net deposit you can claim for tax relief. 

 

14) Ordinary child relief (under the age of 18)

Claim: RM2,000 per child

A deduction is allowed for every one of your unmarried children below the age of 18 years old, at any time during the year of assessment. 

 

15) Child (18+) in full-time education

Claim: RM2,000 or RM8,000 per child

Slightly different from the previous claim, there is an alternative deduction of RM8,000 is allowed if the child is unmarried, 18 years of age and above, and meets any of the following criteria:

• 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 Master or Doctorate) outside of Malaysia

 

16) Life insurance and EPF

Claim: Up to RM7,000 (this allocation differs for public and non-public employees)

You may claim this relief for personal life insurance premiums and premiums paid for your spouse, but not your children. Contributions to approved schemes, such as the Employees Provident Fund (EPF), too, are allowed under this relief. Private retirement scheme (PRS) contributions, on the other hand, fall under a different category.

Depending on whether you are a pensionable state employee or a private sector employee, this relief is handled differently. Normally, pensionable public employees are not eligible for the EPF relief allocation but may claim up to the full RM7,000 relief under life insurance premium payments and takaful contributions. Private sector employees (who make EPF contributions) are limited to a maximum of RM4,000 for EPF or other approved schemes, and RM3,000 for life insurance premium payments and takaful contributions.

With effect from YA 2022, the government will permit public employees who also make self-contributions to the EPF or other approved schemes to take advantage of the relief allocations of RM3,000 (for a life insurance premium payments/takaful contributions) and RM4,000 (for the EPF or other approved schemes).

 

17) Private retirement scheme (PRS) and the deferred annuity

Claim: Up to RM3,000

The maximum deduction allowed by this relief is RM3,000 for a person and RM3,000 for a spouse who is employed. Nevertheless, the deduction is only permitted if you choose joint assessment, and it is capped at RM3,000.

From YA 2012, this tax relief has been offered, and it has now been extended until YA 2025.

 

18) Education and medical insurance

Claim: Up to RM3,000

This claim can be used to pay insurance premiums for education or medical benefits for yourself, your spouse, or your child. The total deduction under this relief is limited to RM3,000 for an individual and RM3,000 for a spouse with a source of income. Couples who choose joint assessment, on the other hand, will be limited to an RM3,000 deduction limit.

 

19) SOCSO

Claim: Up to RM350

Your contributions to the Social Security Organisation (SOCSO) are deductible during the assessment year. Previously, this relief was limited to RM250, but it was increased to RM350 in Budget 2022. The scope of this tax relief was also expanded to include contributions made by employees through the Employment Insurance System (EIS).

 

20) Equipment for disabled self, spouse, child, and parent

Claim: Up to RM6,000

This relief can be claimed for the costs of purchasing any necessary basic supporting equipment for yourself, your spouse, your child, or your parents. The disabled person must be registered with the Department of Social Welfare.

Haemodialysis machines, wheelchairs, artificial legs, and hearing aids are examples of basic auxiliary equipment. Spectacles and optical lenses are not permitted.

 

21) Disabled individual

Claim: RM6,000

Disabled individuals can claim a further deduction under this tax relief if they have been certified in writing by the Department of Social Welfare.

 

22) Disabled husband/wife

Claim: RM5,000

Those who have a disabled spouse are entitled to a further deduction under this relief. This relief was previously set at RM3,500; it was then increased to RM5,000 under Budget 2021.

 

23) Disabled child

Claim: RM6,000

Individuals with a disabled child up to any age who is unmarried can claim this tax relief.

 

24) Additional relief for a disabled child (18+) in higher education

Claim: RM8,000

You are also entitled to this additional relief (in addition to the RM6,000 relief mentioned above) if your child is unmarried (18 years of age or older) and meets 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 Master’s or Doctorate) outside of Malaysia

In total, you can get a child relief of up to RM14,000.

 

Tax Deductions

While tax reliefs reduce your chargeable income, tax deductions reduce the amount of your aggregate income (the sum of your total income for the entire year). These are the deductions allowed for YA 2022, on an individual claim:

 

1) Donations to charities, sports activities, and approved funds/institutions

Deduction: Up to 10% of aggregate income

Donations under the following categories are restricted to 10% of your aggregate income:

• 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

Individual taxpayer donations and contributions to help fight the Covid-19 pandemic (to approved institutions, organisations, or funds) are also included in this category. This includes the Covid-19 Fund, which the government established in 2020.

However, if you contribute to the National Disaster Management Agency (NADMA), your tax deduction is the amount of your contribution.

 

2) Other donations, gifts, and contributions

Deduction: Up to the value of the gift unless stated otherwise

Tax deductions (with varying limits) are available for the following situations:

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

 

3) Membership subscription for professional bodies

Deduction: Membership subscription paid

Membership subscription fees paid to professional bodies for one’s profession – such as medical or legal professional fees – can be claimed as tax deductions.

 

Tax Rebates

Finally, after you’ve determined the amount of tax charged on your chargeable income, tax rebates are calculated at the end of your BE form. It has a direct impact on the amount of tax you pay.

1) Tax rebate for self

Rebate: RM400

You will be entitled to this rebate of RM400 on the tax charged if your chargeable income (after tax relief and deductions) does not exceed RM35,000.

 

2) Tax rebate for spouse

Rebate: RM400

You can claim this rebate if your chargeable income (after tax relief and deductions) does not exceed RM35,000 and you have been granted tax relief of RM4,000 for your spouse. As a reminder, the RM4,000 tax relief for your spouse is available if your spouse has no source of income or elects to file jointly in your name.

 

3) Departure levy rebate for umrah or religious travel

Rebate: Amount of departure levy paid

This rebate is granted to any Muslim person who leaves Malaysia by air to perform umrah or other kinds of religious pilgrimage, but not for the purpose of performing hajj. The following supporting documents are needed to claim this rebate:

• For umrah: A copy of the visa issued by the embassy of Saudi Arabia
• For other religious pilgrimages: Written verification by a recognised religious body

You can only claim this tax rebate twice per 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.

We hope that now that you’re aware of the full list of tax reliefs, deductions, and rebates available for YA 2022, the tax filing process will be easier for you. It will undoubtedly take some time for you to go through your spending in the previous year and match it to all of the reliefs that you are eligible for, but the tax refunds will be well worth it!