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Tax Relief YA 2023: 10 Things You Should Know When Doing e-Filing in 2024

BY Nisya Aziz

Updated 15 Mar 2024




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First order of being a taxpayer - getting ready for tax season in Malaysia lor. This is the time when we’re prepping ourselves to scramble around to find the receipts for items we purchased last year. Why?  Because being Malaysians, if we can’t bargain, then we’ll find a way to pay less. And, with all these receipts, we hope to creatively use all the tax deductions and reliefs to the max!

Now, some of you may be confused with the terms and ask, “What’s the difference between tax deductions and tax reliefs?” Well, both are in charge of reducing your chargeable income.

The only difference is that tax deductions come from gifts and donations you made. There’s also another term called tax rebate, which is deducted from the actual taxed amount.

Enough babbling, let’s move on to the things that you should take note of when doing e-filing because it can be complicated sometimes and you don’t want to miss something that can let you squeeze back the money government had taxed you. 
 

What's covered in this article?


1. There's a new adjustment for Tax Rate 2023 

Chargeable Income (RM) Tax Rate 2022 Tax Rate 2023
1 - 5,000 0% 0%
5,001 - 20,000 1% 1%
20,001 - 35,000 3% 3%
35,001 - 50,000 8% 6%
50,001 - 70,000 13% 11%
70,001 - 100,000 21% 19%
100,001 - 250,000 24% 25%
250,001 - 400,000 24.5% 25%
400,001 - 600,000 25% 26%
600,001 - 1,000,000
26%
28%
1,000,001 - 2,000,000 28% 28%
Melebihi 2,000,000 30% 30%


Perhaps some of you are wondering what’s chargeable income. How to calculate this? Say no more, here's the equation:

Chargeable Income = Total annual income – Tax exemptions – Tax Reliefs


For better understanding, let’s take a look at this example - meet Danial and his details.



Based on the info above and the equation is given previously, Danial's chargeable income would be:

Chargeable income = RM65,200 - RM1,600 - (RM9,000 + RM6,000 + RM1,800 + RM950)
                                     = RM45,850

Tax payable = RM45,850 x 8% (tax rate)
                        = RM3,668


2.  You can’t claim tax relief for a non-vocational education

This can be confusing because at first, the government said can, but now cannot, so which one leh? Well, according to LHDN, if you’re pursuing a certificate/diploma, bachelor’s degree in English Literature, Performing Arts, Philosophy, or Anthropology - basically non-vocational - you’re not eligible for the education tax relief. The only categories of courses that are eligible are Law, Accounting, Islamic Financing, Technical, Vocational, Industrial, Scientific, and Technology



That said, if you’re pursuing non-vocational courses at the Master’s or Doctorate level, then you can take advantage of this tax relief. You can claim up to RM7,000. Meanwhile, a course of study for upskilling or self-enhancement is restricted to RM2,000.
 

3. Moms with babies can get extra tax relief

Taking care of a baby isn’t cheap - you don’t need to have a baby to know this. We googled breast pump prices in Malaysia and were shocked by the price tag. The price starts from RM45 to more than RM500. Never thought running a mini food factory could cost you this much. 



This is why the government is giving tax relief of up to RM1,000 for the breastfeeding types of equipment - to lessen the financial burden for breastfeeding working mothers. So what are the requirements?
  • The types of breastfeeding equipment that are entitled to this tax relief are the breast pump kit (manual and electronic), ice pack, breast milk collection/storage equipment and a cooler set/bag.
  • Anything above RM1,000 CAN’T be claimed. So spend your money wisely, mothers.
  • It’s only available for children below 2 years old.


4. Got little ones in kindergarten or daycare? 


 

Good news – there are extra tax breaks for you. You can snag up to RM3000 in tax relief for each kiddo aged 6 and under. It's a nice bonus, especially if you're shelling out for special or private schools.


5. Additional tax relief for the ex-husband who pays for alimony to the ex-wife



Yup, a maximum relief of RM4,000 can be claimed by a husband who pays for alimony to his ex-wife. But, if there's no legally binding agreement, it can't qualify as tax relief. So, make sure that your affairs are in order.


6. So, sports attire isn’t sports equipment...

When it comes to claiming tax relief, many people got this part wrong. LHDN states in the Income Tax Act that the tax relief for sports equipment is only eligible for those used in sporting activities defined in the Sports Development Act 1997. This is to encourage you to live a healthier life.



This means equipment like dumbbells, shuttlecocks, nets, rackets, golf sets, and more are considered sports equipment. Meanwhile, jerseys, sports shoes, pants, and swimsuits are considered sports attire, which means you can’t claim a lifestyle tax relief. 

You may be dissatisfied and say, “How to swim without swimsuits?” or “Are we supposed to run barefoot?”. But hey, that’s the requirements and if you look at the dictionary, these two words - attire and equipment, have different meanings.  If you’re stubborn, you can still make that claim. Just know what to answer lah when there’s an audit and you have to pay for the fine/penalty.
 

7. There’s a tax rebate for Muslims who paid Zakat 

To those who aren't familiar, Zakat is a payment made annually by Muslims under Islamic law. It’s a way for a person to ‘cleanse’ his/her earnings because some of the money earned may not be halal due to imperfections of the system. This money is also used to help those who are in need.



And in Malaysia, those who paid Zakat (any type of Zakat) can get a tax rebate. Why? Well, due to both income tax and zakat, there is the concern that Muslims will end up paying double the amount of tax. Koyaklah pocket like this. Anyway, the amount of rebate is limited to the total tax charged. Don’t quite get it? Fret not, here’s an example:

Miss Adibah needs to pay RM1,050 for her income tax for the Year of Assessment 2022. Additionally, Miss Adibah had also paid RM650 for Zakat on Income, RM430 for Zakat on Savings and RM21 for Zakat Fitrah.

The calculation:
Tax Payable - Zakat paid
RM1,050 - (RM650 + RM430 + RM21)
RM1,050 - RM1,101 = - RM51


Miss Adibah don’t have to pay any income tax at all because of the zakat rebate. And, if she's doing a monthly tax reduction (PCB), she can get a tax refund for the balance. You too can do the same, just make sure to pay your Zakat before 1 January of every year to be able to claim a tax rebate

ALSO READ: How To Calculate Zakat On Your Investment?
 

8. A person with a mental health condition can also claim a tax relief

Just to break the stigma, not everyone with mental illness is locked at Tanjung Rambutan. Some of them are still part of functioning members of society. It means they still go to work and need to pay taxes. So, if you feel that you’re in this ‘category’, guess what? You can claim tax relief for your meds, therapy and check-up that is under the Medical Expenses under Serious Disease up to RM6,000



Some of you may ask, “What other serious illnesses that are eligible for tax relief?”. Well, according to LHDN, cancer, heart attack, pulmonary hypertension, renal failure, chronic liver disease, fulminant viral hepatitis, brain tumour, major burns, major organ transplant, Parkinson’s Disease, HIV/AIDS, major amputation of limbs, head trauma, chronic skin disease, diabetes mellitus, major Thalassemia, Rheumatology and Leukemia are considered as serious illnesses.

And if you did a complete medical checkup (for you, your spouse or children), you can also claim tax relief of RM500.
 

9. Married couples can choose to do a joint tax assessment

Yes, you read that right! Married couples have a choice to file a joint tax assessment with their spouse as stated in Section 45 of Malaysia’s Income Tax Act 1967. What’s great about this is that both will save money. If the husband or wife earns less than RM4,000, then it’s advisable to file it jointly. This will allow you to make use of the additional spouse relief of RM4,000. This is what we call teamwork.



But, if any of you (wife or husband) earns more than RM4,000, you guys might want to consider a separate assessment so that each of you can take advantage of the RM9,000 individual relief. Plus, you can also maximise other applicable reliefs that can help bring down the taxable income for both of you to a lower tax bracket.

This is, of course, one of the big decisions married couples need to think about. One way to find out which can give you the biggest tax savings is to double-check your calculations and then look at the balance due from each method - joint or separate. You can do this via e-filing, where you get to see the tax due for each individual and compare it with the joint assessment.
 

10. Own an electric car?



Here's a perk for you: you can score a deduction of RM2,500 for costs related to your EV charger. Whether it's installation expenses, buying or hiring the charger, renting it, or even subscribing to EV charging services, you're eligible for this deduction. Time to power up and save some cash!

 

Maximise your tax relief as much as you can!

We hope this list will help you to maximise your tax relief. Don’t forget to track all of the receipts needed (keep them for at least 7 years) and remember to file your income tax before the due date which is on the 30 April 2024 (15 May 2024 for e-filing) for those who only received employment income!

Having said that, the deadline would usually be extended. But to be safe, it’s better to get it done ASAP, people. Once that is done, do keep track of your bank account as the government would be refunding tax paid in excess if you have any.



Oh, one more thing - here’s another bonus tip to help you pay less tax. Try to talk to your manager or HR if your income can be arranged in a way that non-taxable allowance is increased instead of basic salary like travelling allowance, parking allowance, dental allowance, etc. This can help you to reduce your income tax. 

Other than that, we urge you not to take income tax lightly you know - can kena penalty/fine if you keep avoiding it. Even after you die, you’d still need to pay if you owe the government tax payable. After all, these taxes are what fund low-cost medical services like government clinics and hospitals, the building of roads and highways, the provision of public transport, etc. So let’s be responsible citizens.

Happy tax season!


ALSO READ:
*The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.
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About the Author

Nisya Aziz

A storyteller at Finology, who drinks coffee like its water, Nisya enjoy bringing valuable, educational and entertaining content to others. When not busy crafting content, you’ll find her in the boulder gym or on stage, performing theatre shows.

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