Final Week to Make Use of Income Tax Reliefs
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With only a week till the end of the year, Malaysians still have time to take advantage of various income tax reliefs. When it's time for 2021 individual tax filing, they will have maximised the benefits and decreased their tax bill.
The various types of tax reliefs
According to tax agent Christine Koh, Malaysians should take advantage of the RM2,500 lifestyle relief to purchase books, periodicals, newspapers (including e-copy), computers, cellphones, tablets, sports equipment, gym membership, and Internet subscription.
The PERMAI Assistance Package offers customers an RM2,500 discount for personal computers, smartphones, and tablets purchases.
She explained that if one spends RM5,500 on a laptop, they can claim RM2,500 under lifestyle relief and RM2,500 under special relief. The total amount claimable will be RM5,000.
Malaysians can also make use of up to RM1,000 tax relief for domestic tourism spent on:
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Accommodation registered with the Commissioner of Tourism,
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The purchase of domestic travel packages from registered travel agents, and
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Admission fee to tourist attractions.
Koh said that Malaysians are also eligible for a maximum of RM8,000 in medical expenses tax relief for the taxpayer, spouse and children. The tax relief applies for severe diseases that must be backed by a medical report.
Taxpayers can claim a maximum of RM1,000 for a thorough medical check-up, including Covid-19 testing, and another RM1,000 for vaccination costs for themselves, spouses and children.
They can also claim an additional RM8,000 tax relief for medical treatment and caregiving expenses for their own parents if the medical condition is certified by a medical practitioner.
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Taxpayers should also consider using the RM3,000 tax break to buy private retirement schemes or deferred annuity schemes.
There is also an RM8,000 relief for contribution to children's education under the National Education Savings Scheme (SSPN).
Koh said it is a very appealing tax relief that is not new, but many taxpayers do not file for it.
Here are other reliefs that taxpayers can still enjoy by year-end:
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Educational fees, which one can claim for a maximum of RM7,000,
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Breastfeeding equipment, up to RM1,000,
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Registered kindergartens and childcare centres fees, claimable for a maximum of RM3,000, and
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Life insurance premium, claimable for a maximum of RM3,000.
According to Koh, supporting equipment for disabled taxpayers, their spouses, or children is also eligible for an RM6,000 tax break.
Donations to the federal government, state governments, or approved organisations and institutions can also be claimed as tax deductions.
Koh said that to claim the tax reliefs, preserve the invoice or receipt in the name of the taxpayer as per MyKad in order to prepare for the 2021 filing.
Do not claim if you do not have supporting documents
She added that taxpayers who do not have any supporting paperwork should not seek such tax relief.
According to tax expert Dr Veerinderjeet Singh, individual taxpayers should remember that the tax year is January to December 2021 for their income tax return to be filed in April 2022.
He also said that to prepare for tax filing, employees must verify that their employers have delivered their annual remuneration form (EA form) by April 2022.
Taxpayers should keep in mind that paperwork and receipts are required to defend a claim for specific personal reliefs when the LHDN conducts a desk audit.
Source: The Star