Tax season is here—and as of 1st March 2021, you can already start filing your taxes. If you are someone who has to pay taxes, you would know that you can also get some exemptions or reliefs. In other words, after declaring your income, you can get a rebate if you spent on certain things such as medical expenses, education, travel and so on.
While the categories or types of reliefs are usually the same, the government may announce more reliefs each year. This year, with Covid-19 around, they’ve announced some additional reliefs for the year of assessment of 2020. Here are some of them:
1. Personal + family tax reliefs
Generally, each individual taxpayer will already get a rebate of RM9,000 after they declare their income. If you have any dependents on you such as parents or children, they will be included in this as well. This year, there’ll be a further reduction of 1% to this rebate– but this is only for the M40 group (those who have an annual income of RM50,000-RM70,000). For the B40 group, they can apply to their banks for their loan moratoriums to be frozen for a longer period of time.
Besides that, if you’re a parent, you can also get reliefs for your children’s education. To start off, you can get RM2,000 off for every child aged 18 and under, whether or not they’re studying. But if they are studying, you get a rebate of RM8,000 for each child.
There are also several medical tax reliefs you can get for yourself and your family, which we’ll be covering in the point below.
2. Medical tax reliefs
Even if you already have medical insurance, it’s safe to say that further financial relief for medical expenses would be much appreciated. So first off, if you had a medical check up last year, you’re eligible to get an exemption of RM500.
If your spouse or children have a serious condition that you had to pay for to treat, you can get RM6,000 off. As for parents, you can also get a relief of RM3,000 for them and an additional RM5,000 if you had spent on their check ups, medication and other treatment. However, just make sure your other siblings aren’t claiming for the same thing. If all the children had spent on their parents’ care, one child is advised to claim the relief and split it with the other children.
3. Property tax reliefs
We recently wrote an article about the type of property taxes you can be made to pay in Malaysia.
[READ MORE: 4 types of property tax you need to pay in Malaysia]
Two of the taxes mentioned in that article—stamp duty and real property gain tax—will have some rebates this year.
Stamp duty is what you pay when you sign any legal document while buying a new property. The more expensive your property is, the higher the stamp duty you’ll be paying. So this can be anywhere from a few thousand to millions of ringgit.
But now, the government has decided to scrap the stamp duty specifically for any ownership transfer and loan agreements for homes bought between 1st June 2020-31st May 2021. However, there’s a limit to this—RM500,000 to be specific. So if anyone’s stamp duty costs more than that, they’ll need to pay the balance.
Then there’s the real property gain tax, which is what home owners must pay when selling their homes. Basically, if you bought your house for RM500,000 and then later sell it for RM700,000, you’ll need to pay tax for the RM200,000 profit you made. So this won’t apply to you if you only made a loss from your sale. However, the government has also agreed to suspend this tax for any homes sold until 31st December 2021. There’s also a limit to this—3 homes per individual. So if you’re selling 4 homes this year, you’ll need to pay tax for the fourth home.
4. Other tax reliefs
There are several other categories that we haven’t covered in detail such as disabilities, lifestyle, education, and so on. Briefly, here are some of them:
- RM6,000 for disabled individuals
- RM6,000 for supporting equipment for disabled individuals, or a disabled child, spouse or parent
- RM7,000 for individuals who take up a Bachelor’s degree in law, accounting, Islamic financing, technical, vocational, industrial, scientific or technology
- RM7,000 for individuals who do a Master’s or PhD in any field of study
- RM2,500 for purchase of personal computer, smartphone or tablet for self, spouse or child (not for business use)
- RM2,5000 for internet subscriptions
- RM1,000 for breastfeeding equipment such as pumps
Like we said earlier, we’re not able to list all the reliefs you can get this year. But you can check out the full list on LHDN’s page here.
We know the whole process of filing taxes can be quite...taxing. So we hope that this list will at least help you know what kind of rebates you can get. The deadline to file your taxes is 30th April 2021, so don’t wait too long to start. In the meantime, make sure you don’t make these mistakes: