personal reliefs and rebates by: associate professor dr. gholamreza zandi [email protected]
TRANSCRIPT
Masters of Financial PlanningTaxation Planning
PERSONAL RELIEFS AND REBATES
By: Associate Professor Dr. GholamReza Zandi
Personal Reliefs
• Personal reliefs are deducted from total income of
an individual to arrive at chargeable income
• Reliefs are only given to resident individuals.
• Some reliefs are available only under joint
assessment (Example: spouse relief and disabled
spouse relief).
• A married woman may also claim these reliefs
unless she elects for joint assessment with her
husband.2
Relief for Self
• Resident individual given RM9,000
personal relief automatically.
• Also given to a wife who is assessed
separately.
• Full personal relief of RM9,000 given to a
deceased individual in the year of death i.e.
the relief is not apportioned on a time basis.
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Spouse Relief
• Available to husband when wife has no total income or when
wife elects for joint assessment.
• Wife can also claim for husband relief if he has no source of
income or elects for joint relief
• Maximum RM3,000 for spouse.
• Additional RM3,500 available if spouse is disabled.
• The relief is given either in full or nil. No apportionment of the
relief.
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Child Relief
• Relief RM1,000 for each child (below 18 years of age)
• RM5,000 for handicapped child (unmarried)
• RM4,000 for child 18 years or above and receiving fulltime
education at a university or college
• Wife who is living together with husband and assessed
separately may elect to claim for child relief.
• If wife claimed child relief in respect of a child, husband
cannot claim on the same child.
• However, divorced couple can share child relief based upon
formula: Child relief: 50 : 50.
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Medical Expenses for Parents
• Maximum of RM5,000 expended by taxpayer for his parents
(Sec 46(1)(c)).
• Covers both normal medical expenses and expenses to maintain
parents in nursing home.
• [From YA 2011 - includes ‘carer’ expenses provided by registered
foreign maid but not by spouse and or children)]
• Certified official receipt needed. Endorsement from a registered
medical practitioners to confirm that medical payment was made by
children.
• When the wife elects for joint assessment, the husband can obtain a
deduction for medical expenses incurred for “his” parents only.
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Insurance Premium and Contributions
• Maximum RM6,000 for insurance premiums and contributions to
approved schemes.
• Insurance premium must be paid to qualify for relief.
• Only individual’s obligatory contribution to Employment Provident
Fund and approved schemes qualify for relief.
• From YA 2012, contributions to Deferred Annuity Premium and/or
Private Retirement Schemes will be entitled to a maximum of
RM3,000 relief.
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Other Reliefs
• Basic supporting equipment restricted to RM 5,000
for himself ,wife, child or parent who is disabled.
• Disabled relief (additional) of RM 6,000 if taxpayer is
disabled.
• Course fees up to RM5,000 for pursuing any course
of study at Undergraduate/Masters/Doctoral level in a
Malaysian institution recognized by the Government.
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Other Reliefs (Cont’d)
• Serious disease relief up to RM5,000 for taxpayer, his wife or
child suffering a serious disease such as AIDS and Leukemia.
• Up to RM1,000 (with receipt) allowed for purchase of books,
magazines, etc. for own use, spouse or child.
• Taxpayer is given a relief of RM3,000 for a YA in respect of a
purchase (with receipt) of a personal computer in that YA. Relief
allowed once in 3 years. Each taxpayer i.e. the husband or wife
can claim the relief in separate assessments (the computer
purchased must be for private and not business use).
• RM3000 for insurance scheme premiums for education or
medical benefits.
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Other Reliefs (Cont’d)
• Up to RM300 given each year for purchase with
receipt of any sports equipment.
• Relief on Broadband Subscription fees up to
RM500 p.a.
• Relief for deposits made to the National
Education Savings Scheme is increased from
RM3,000 to RM6,000 with effect from YA 2012
to 2017
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Rebates
• A rebate is given as a deduction from the tax charged to arrive at
the tax payable.
• An individual who is resident in Malaysia is given the following
rebates for a YA, where the chargeable income does not exceed
RM35,000:
i. RM400 for an individual.
ii. Further RM400 if he has a wife living with him and she is not
separately assessed or if he is separated or divorced and
maintaining a wife.
iii. RM400 to a wife who is separately assessed, provided her
chargeable income does not exceed RM35,000. 11
Other Rebates
• Zakat, Fitrah or other Islamic dues to the appropriate religious
authority [sec 60A(3)]. Claims must be supported by official
receipts.
• Where the rebate exceeds the income tax payable for a YA, the
excess cannot be returned as a tax refunded nor is it available to
be carried forward as a credit to set off any future tax payable.
• The rebate is deducted before any sec 110 set off is given. Any
excess tax credit in terms of tax set off under dividend imputation
would be refunded to taxpayer.
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The End