Personal Tax Relief YA 2017

Assalam and Hi everyone!

Happy weekend to you, and yes, Happy New Year!

Well, I'm sure many of you are declaring for income tax rite? 

So following are some of the personal tax relief for the upcoming YA 2017 personal income tax return submission.

Here you go!

1. Self and Dependent - RM 9,000

2. Medical expenses/special needs and care expenses for parents - RM 5,000 (Limited)

OR

Deduction on Parent RM 3,000 (Limited)
- Limited RM 1,500 for only one mother
- Limited RM 1,500 for only one father

The special deduction on parent has been implemented since YA 2016. Some things to be care on:

 - Subject to criteria under Section 46(1)(o) of the ITA 1967:

 (o) an amount of one thousand five hundred ringgit (RM1,500) for each of the parent of that individual —

(i) who is a resident and, at any time in that basis year, aged sixty years and above (must be 60 years & ++) ; and

(ii) whose annual income does not exceed twenty-four thousand ringgit (<RM24,000) for that year of assessment: Provided that —

(a) the deduction under this paragraph shall be allowed for a maximum of two (2) parents;

(b) the deduction under this paragraph shall not be allowed for an individual who has made a claim under paragraph 46(1)(c) [those claim medical expenses for parent max RM5,000 cannot claim this relief] for the same basis year; and

(c) where two or more individuals are each entitled to claim a deduction for a year of assessment under this paragraph in respect of the same parent, there shall be allowed to each of those individuals, in place of the whole deduction which would otherwise be allowed under this paragraph, an amount of the whole deduction equally apportioned according to the number of the individuals making the claim; (let say have 3 child, and all 3 want to claim this relief, need to apportion/divide by 3 - means Rm3,000 for 2 parent, divide by 3 = each child can claim relief RM1,000)

Normally for the claiming deduction on parent purpose, a copy of I/C or I/C number of the parent will be kept as supporting.

*The above special deduction for parent can be claimed provided, the taxpayer did not claim medical treatment, special needs and care expenses for parents in the same YA. 

Referring to following Section 46(1) (c) of the ITA 1967, it's stated the criteria to claim the medical expenses relief for parent max RM5,000:

(c) an amount limited to a maximum of five thousand ringgit (RM 5,000) in respect of medical treatment, special needs or carer expenses expended in that basis year by that individual for his parents and the claim is evidenced by certification of a medical practitioner that the medical conditions of the parents require medical treatment or special needs or carer and—

(i) in the case of medical treatment or special needs, a receipt on the amount expended; or

(ii) in the case of carer, a written certification or receipt from, or work permit of, the carer:

Provided that for the purpose of this paragraph—

(a) “carer” shall not include that individual, his wife or her husband or the child of the individual;

(b) “parents” shall be individuals resident in Malaysia;

(c) the medical treatment and care services are provided in Malaysia; and

(d) the medical practitioner is registered with the Malaysian Medical Council.

3. Basic supporting equipment for disabled self, spouse, child or parent - RM 6,000 (Limited)

 - Original payment receipt/copy should be kept as supporting

Refer to Section 46(1)(d):

(d) an amount limited to a maximum of six thousand ringgit (RM6,000) expended (receipt) or deemed expended (tax invoice@payable) under subsection (3) in that basis year by that individual for the purchase of any necessary basic supporting equipment for his own use, if he is a disabled person or for the use of his wife, child or parent, who is a disabled person, or in the case of a wife, for her own use, if she is a disable person, or for the use of her husband, child or parent, who is a disabled person;

  

4. Disabled Individual relief - RM 6,000

 - A copy of OKU card from Jabatan Kebajikan Masyarakat (Social Welfare Department) should be presented if required by IRB upon tax audit

Refer to Section 46(1)(e) :

(e) a further six thousand ringgit (RM6,000) for that individual if he is a disabled person; 

So for a disabled taxpayer, entitle for personal relief RM 9,000 + disabled relief RM 6,000 = RM 15,000.

5. Education Fees (Self) - RM 7,000 (Limited)

(i) Other than a degree at Masters or Doctorate level-for acquiring law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications; 

(ii) Degree at Masters or Doctorate level-for acquiring any skills or qualification

Refer to Section 46(1)(f):

(f) fees expended in that basis year by that individual on himself for—

(i) any course of study up to tertiary level [this part is for those studying Form 6, A Level, Matriculation, Diploma, Degree], other than a degree at Masters or Doctorate level, undertaken for the purpose of acquiring law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications; or

(ii) any course of study for a degree at Masters or Doctorate level undertaken for the purpose of acquiring any skill or qualification, in any institution or professional body in Malaysia [example: Professional Qualification Exam in MIA, Professional Certification from CTIM, ACCA study cost in local institution recognized by Minister of Finance etc] recognized by the Government or approved by the Minister, as the case may be, and the total deduction under this paragraph is subject to a maximum amount of seven thousand ringgit;

This part need further in-depth study on the list of eligible courses and eligible institution in order to claim the relief. I'm comfortable to say those further study in Public Universities won't have problem to claim the relief (only for those relevant courses). But those sitting for international professional qualification such as ACCA, ICAEW, will need to see whether the institution they rendered from are qualified/recognized by the Gov/MOF or not.

6. Medical expenses for serious diseases for self, spouse or child - RM 6,000 (Limited)

Refer to Section 46(1)(g) :

(g) an amount limited to a maximum of six thousand ringgit (RM6,000) in respect of medical expenses expended or deemed expended under subsection (3) in that basis year by that individual on himself if he is suffering from a serious disease or on his wife or child who is suffering from a serious disease, or in the case of a wife, on herself if she is suffering from a serious disease or on her husband or child who is suffering from a serious disease:

Provided that the claim is evidenced by a receipt and certification issued by a medical practitioner that treatment was provided to the individual, spouse or child for that disease; 

Based on Public Ruling No. 4/2014 - Deferred Annuity,  Paragraph 3.7, the serious diseases are defined as :

“Serious disease” means acquired immunity deficiency syndrome, Parkinson’s disease, cancer, renal failure, leukaemia or other similar diseases.

And following are information extracted from IRBM's brochure:

7. Complete medical examination for self, spouse, child RM 500 (Limited)

Refer to Section 46(1)(h) :

(h) an amount limited to a maximum of five hundred ringgit (RM500) in respect of complete medical examination expenses expended or deemed expended under subsection (3) in that basis year by that individual on himself or on his wife or on his child, or in the case of a wife, on herself or on her husband or on her child, as evidenced by receipts issued by a hospital or a medical practitioner:

Provided that the deduction under this paragraph shall be part of the amount limited to a maximum of six thousand ringgit in paragraph (g);

So here, its either only claim RM500 for the complete medical examination, OR you may claim this to be a part of the RM6,000 for medical expenses for serious disease. 

8. Lifestyle - RM 2,500 (Limited)

This relief can be claimed on expenses incurred for SELF, SPOUSE or CHILD, provided the billing is under the taxpayer's name.

(i) Purchase of books journals, magazines, printed newspaper and other similar publications (except banned reading materials) for self, spouse or child;

(ii) Purchase of a personal computer, smartphone or tablet for self, spouse or child;

(iii) Purchase of sports equipment for any sports activity as defined under the Sports Development Act 1997 (excluding motorized two-wheel bicycles) and gym memberships for self, spouse or child; and

(iv) Payment of monthly bill for internet subscription

Please remember: the expenses must be incurred by taxpayer @ billed under taxpayer's name.

Refer to Section 46(1)(p) :

p) an amount expended or deemed expended under subsection (3) in that basis year by that individual— (i) for the purchase of books, journals, magazines, printed newspapers and other similar publications for the purpose of enhancing knowledge for his own use or for the use of his wife or child, or in the case of a wife, for her own use or for the use of her husband or child; (ii) for the purchase of a personal computer, smartphone or tablet (not being used for the purpose of his own business) for his own use or for the use of his wife or child, or in the case of a wife, for her own use or for the use of her husband or child; (iii) for the purchase of sports equipment for any sports activity as defined under the Sports Development Act 1997 (excluding motorized two-wheel bicycles) and gym memberships for his own use or for the use of his wife or child, or in the case of a wife, for her own use or for the use of her husband or child; and (iv) for the payment of monthly bill for internet subscription under that individual’s name for his own use or for the use of his wife or child, or in the case of a wife, for her own use or for the use of her husband or child, as evidenced by receipts issued in respect of the purchase or payment, as the case may be, and the total deduction under this paragraph is subject to a maximum amount of two thousand five hundred ringgit (RM2,500) ;

9. Purchase of breastfeeding equipment RM 1,000 (Limited)

Refer to Section 46(1)(q) :

(q) an amount limited to a maximum of one thousand ringgit (RM1,000) expended in that basis year for that year of assessment by that individual for the purchase of breastfeeding equipment for that individual’s own use for a child of that individual aged two years old and below, as evidenced by receipts issued in respect of the purchase:

Provided that—

(a) for the purpose of this paragraph, breastfeeding equipment refers to a breast pump kit and an ice pack, a breast milk collection and storage equipment, and a cooler set or bag;

(b) the deduction under this paragraph shall not be allowed for a year of assessment immediately following that year of assessment; and [only specially for YA 2017]

(c) the maximum amount of deduction under this paragraph shall apply notwithstanding that that individual may have more than one child; [means eventho you have more than 1 child, the max u can claim is only RM1,000]

10. Net saving in SSPN's scheme (total deposit in year 2017 MINUS total withdrawal in year 2017) RM 6,000 (Limited)

Refer to Section 46(1)(k) :

(k) an amount limited to a maximum of six thousand ringgit (RM6,000) deposited in that basis year by that individual for his child into the Skim Simpanan Pendidikan Nasional account established under the Perbadanan Tabung Pendidikan Tinggi Nasional Act 1997 [Act 566]:

Provided that if any withdrawal is made from the account by that individual in that basis year, the amount deposited during that year shall be reduced by that withdrawal and regard shall be had only to the reduced amount subject to a maximum amount of six thousand ringgit; 

11. Child care fees to a Child Care Centre or a Kindergarten RM1,000 (Limited)

Refer to Section 46(1)(r) :

(r) an amount limited to a maximum of one thousand ringgit (RM1,000) expended or deemed expended under subsection (3) in respect of the payment of child care fees to a child care centre registered with the Director General of Social Welfare under the Child Care Centre Act 1984 [Act 308] or a kindergarten registered under the Education Act 1996 [Act 550] in that basis year by that individual for a child of that individual aged six years and below as evidenced by receipts issued by such child care centre or kindergarten:

Provided that—

(a) where a wife living together with her husband is assessed separately for that year, the deduction under this paragraph shall only be allowed either to the husband or to the wife; and [only one of them can claim this relief]

(b) the maximum amount of deduction under this paragraph shall apply notwithstanding that that individual may have more than one child. [max amount can claim still is RM1,000 eventho have more than 1 child]

A child here is defined under Subsection 48(9) as:

S48(9) In this section “child”, in relation to an individual or his wife, means a legitimate child or step-child of his or his wife, or a child proved to the satisfaction of the Director General to have been adopted by the individual or his wife in accordance with any law.

12. Interest expended to finance purchase of residential property. Relief of up to RM10,000 a year for three consecutive years from the first year the interest is paid.

Subject to the following conditions:

(i) the taxpayer is a Malaysian citizen and a resident;
(ii) limited to one residential unit;
(iii) the sale and purchase agreement is signed between 10th March 2009
and 31st December 2010; and
(iv) the residential property is not rented out.

Where:
(a) 2 or more individuals are eligible to claim relief for the same property ; and
(b) total interest expended by those individuals exceeds the allowable amount for that year. Each individual is allowed an amount of relief for each year based on the following formula:

A x B/C

where;

A = total interest allowable in the relevant year;
B = total interest expended by the relevant individual in the relevant year;
C = total interest expended by all the individuals.

*Relief limited to RM 10,000

Please refer Section 46(3) :

(3) Where—

(a) two or more individuals are each entitled to claim deduction for the relevant year under this section for interest expended in respect of the same residential property; and

(b) the total amount of interest expended by those individuals in the basis year for that relevant year exceed the amount of deduction allowable for that relevant year under subsection (2), there shall be allowed to each of those individuals for that relevant year an amount to be determined in accordance with the following formula:

A x B/C

where

A is the total amount of deduction allowed under subsection (2) for that relevant year;

B is the total interest expended in the basis year for that relevant year by that individual; and

C is the total interest expended in the basis year for that relevant year by all such individuals.

The residential property here is defined under Section 46(5) :

(5) For the purposes of this section, “residential property” means a house, condominium unit, apartment or flat which is built as a dwelling house. 

13. Husband/Wife/Alimony Payments RM 4,000 (Limited)

Refer Section 47 (1)(a):

47. (1) In the case of an individual resident for the basis year for a year of assessment who in that basis year had a wife living together with him, there shall, subject to subsections (3) and (4), be allowed for that year of assessment a deduction of—

(a) four thousand ringgit (RM4,000) for the wife; and

14. Disable Wife/Husband RM 3,500

Refer Section 47(1)(b) :

(b) a further three thousand five hundred ringgit (RM3,500) for the wife if she is a disabled person. [so if disabled, its RM4,000 + RM 3,500 = RM7,500]

15. Ordinary Child relief RM2,000/child

Refer Section 48.

16. Each unmarried child of 18 years and above who is receiving full-time education ("A-Level", certificate, matriculation or preparatory courses) - RM 2,000/child

Refer Section 48.

17. Each unmarried child of 18 years and above that (RM 8,000/child) :

(i) receiving further education in Malaysia in respect of an award of diploma or higher (excluding matriculation/preparatorycourses).

(ii) receiving further education outside Malaysia in respect of an award of degree or its equivalent (including Master or Doctorate).

(iii) the instruction and educational establishment shall be approved by the relevant government authority.

Refer Section 48.

18. Disabled child RM 6,000

Additional exemption of RM 8,000 disable child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities

Refer Section 48.

19. Life insurance and EPF INCLUDING not through salary deduction - RM 6,000 (Limited)

Refer Section 49(1) :

49. (1) Subject to this section, in the case of an individual resident for the basis year for a year of assessment who in that basis year has—

(a) paid any premium for any insurance;

(b) as an employee or as a self-employed person within the meaning of the Employees Provident Fund Act 1991 [Act 452] made or suffered the making of a contribution to an approved scheme (other than a private retirement scheme); or

(c) made or suffered the making of any contribution under any written law relating to widows’, widowers’ and orphans’ pensions or under any approved scheme within the meaning of any such law,

there shall be allowed for that year of assessment a deduction of the aggregate amount of the payments or contributions or both or a deduction of six thousand ringgit (RM6,000) whichever is the less. 

The above insurance is defined under Subsection 49(3) as:

(3) In relation to an individual claiming a deduction under subsection (1) and (1D), “insurance” and “deferred annuity”, mean an insurance or deferred annuity contracted for by the individual—

(a) on the individual’s life;

(b) on the life of a wife of the individual or, where the individual is a female, on the life of the individual’s husband; or

So for the life insurance, must be under the taxpayer's name but can be insured for himself or his wife and vice versa.

20. Deferred Annuity and Private Retirement Scheme (PRS) - with effect from year assessment 2012 until year assessment 2021 - RM 3,000 (Limited)

Refer Section 49 (1D) :

(1D) In the case of an individual resident for the basis year for a year of assessment who has—

(a) paid premium for deferred annuity; or

(b) made or suffered the making of a contribution to a private retirement scheme,

there shall be allowed for that year of assessment a deduction of the aggregate amount of the payments or contribution or both or a deduction of three thousand ringgit (RM3,000) whichever is the less. 

21. Insurance premium for education or medical benefit INCLUDING not through salary deduction - RM 3,000 (Limited)

Refer Section 49(1B) :

(1B) (a) Subject to this section, in the case of an individual resident for the basis year for a year of assessment who has paid any premium for insurance on education or for medical benefits, there shall be allowed for that year of assessment in addition to the deduction allowed under subsection (1), a deduction of the aggregate amount of the payments or a deduction of three thousand ringgit (RM3,000) , whichever is the less; 

For the claiming purpose, the medical + education benefit, must be under taxpayer's name but can be insured for himself, the wife and child. Please refer Subsection 49(4) :

(4) For the purposes of subsection (1B) reference to an insurance means an insurance contracted for by an individual for himself, his wife or child, or in the case of a wife, for herself, her husband or child. 

22. Contribution to the Social Security Organization (SOCSO) - RM 250 (Limited)

Refer to Section 46(1)(n) :

(n) an amount limited to a maximum of two hundred and fifty ringgit (RM250) in respect of a contribution made or suffered in that basis year by that individual to the Social Security Organization pursuant to the Employees’ Social Security Act 1969; 

Sources:

1. http://www.hasil.gov.my/bt_goindex.php?bt_kump=5&bt_skum=1&bt_posi=3&bt_unit=1&bt_sequ=1

2. Income Tax Act 1967 :
http://www.agc.gov.my/agcportal/uploads/files/Publications/LOM/EN/Pindaan%20Act%2053%20-%2023%2011%202017.pdf

3. IRBM's Brochure: http://lampiran2.hasil.gov.my/pdf/pdfam/07_2017_2.pdf

*This post was made based on author's personal judgement , by referring to the available sources.