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Personal reliefs and tax rebates- part 2 - Coggle Diagram
Personal reliefs and tax rebates- part 2
Spouse relief
Spouse has no total income
RM4000
Conditions
They are living together in the basis year
They did not cease to be living together
The spouse has elected for the combined assessment
Deemed living together
Even if one of the spouses may be temporarily living separately
Unless their separation is by a deed of separation, by a court order or where their separation is permanent
The person or spouse has income outside Malaysia which exceed RM4000
No relief is given
Does not apply for husband or wife who is disabled
Election for combined assessment
Husband may elect in writing for combined assessment provided that no election has been made by his wife
Where the man has more than one wives, the election for combined assessment can only be made with one wife only
If the spouse is a non-resident, the combined assessment can be allowed if he or she is a citizen
Alimony payment or payment to former wife
Whichever is lower
Payment of maintenance, or
RM4000
Payment to
A wife by way or in the nature of alimony
By way of alimony or maintenance to a former wife whose marriage with him was annulled or dissolved
Wife with whom he was separated by an order of a court
Not qualify for relief
Voluntary alimony payments under mutual agreement
Wife relief and alimony payment should not exceed RM4000
Child relief
Legitimate or step child or child approved to the satisfaction of the DGIR to have been adopted in accordance with any law
Resident individual is entitled to claim if they pay for the maintenance of the child at any time during the basis year for
An unmarried child under 18
An unmarried child receiving full-time instruction at any uni, college, school or others
Exclude tuition of correspondence or private tuition at home
An unmarried child serving under articleship or indentures with a view to qualify for a trade or profession
An unmarried child who is disabled (mentally or physically)
If the child is working
If the total income of child exceed the child relief, then no relief shall be given
Not income
Receipt under articles and indentures
The receipt is treated as return of premium paid earlier to the employee, and not their salary
Scholarships, grants or allowance
Election available to an individual's wife
Conditions
She is living together with her husband
Her income is being assessed separately
An election be made in writing for the appropriate deduction to be allowed to them for that year of assessment
Basic rate for child relief
Normal child
RM2000
Disable child
RM6000
Apportionment of child relief
Divorced parents and each of them pay for the maintenance of child
Yes
Couple (not divorced) who elect for separate assessment
No
Higher rate of child relief
Types
Normal
RM8000
Disabled
RM14000
Above the age of 18
Studying full time at a uni, college, etc, or serving under articleship or indenture with a view to qualify for a trade or profession
Studying in Malaysia
Diploma and above
Studying abroad
An award of degree, including master or PHD
Insurance premiums and approved contributions
Total up to RM7000
Payments of
Premiums for insurance (including takaful contributions)
Total of up to RM7000
Insured of a policy must be the person or the wife
Include
Whole life or endowment policy
Insure the life of them
Coverage of death of accident policy
Exclude
Accident policy
The amount of premium to be deducted is not restricted to the amount of annual premium paid. Thus, a lump sum of premium on a life policy would qualify for relief in the year of payment even if that payment is for future annual premiums
If the person receive discount/rebate from the agent, then the net amount would qualify for relief
Approved scheme other than private retirement fund made by an employee or self employed person within the meaning of EPF
Up to RM4000
Widow' and orphans' pensions or any approved scheme
Up to RM4000
Up to 2021. payment of deferred annuity or contributions made to a private retirement scheme approved by SC
Up to RM3000
Deferred annuity issues by the insurers licensed under the Financial Act or takaful operator registered under the Islamic Financial Scheme and contains the Retirement Saving Standards approved by the central bank, to be eligible for relief
To discourage withdrawal of contribution made to PRS, and/or deferred annuity insurance any withdrawal shall be subject to a final withholding tax of 8%
No withholding tax applies for any withdrawal, due to permanent total disability, serious disease and mental disability
Medical benefits or educational policy
Up to RM3000
An insurance contracted by an individual for themself, their spouse, or child
Educational policy must be scheduled to be payable when the policy matures, such as when the child is between the ages of 13 to 25
Separate assessment
The wife shall be allowed to claim for the above relief to reduce her total income
Summary. either combined or separate, the max is
RM4000
EPF
RM3000
Life insurance premium
Private retirement fund
Medical and educational premium
Income tax rebates
For chargeable income less than RM35000
Separate assessment
The wife can claim for RM400 tax rebates if her chargeable income is less than RM35000
Categories
Individual
400
Individual and spouse or relief for alimony payment to former wife
800