The government has announced significant updates to personal income tax reliefs during the tabling of Budget 2025, which is aimed at easing the financial burden of Malaysians.
Here’s a quick rundown of the key highlights:
1. Higher Relief for education & medical insurance premiums
To encourage more people to invest in education and health insurance, the individual income tax relief for premium payments has been raised to RM4,000. This increase offers Malaysians greater support in managing education and medical coverage costs.
2. Medical expenses relief raised to RM10,000
Taxpayers can now enjoy an income tax relief of up to RM10,000 for medical payments. This applies to policies under insurance and takaful products that come with co-payment features. This enhanced relief provides additional assistance to those managing high healthcare costs.
3. Extension of Foreign Source Income (FSI) Exemption
In a bid to encourage global investments, the FSI exemption for individual taxpayers has been extended until 2036. This long-term relief ensures that Malaysians receiving income from foreign sources will continue to enjoy tax exemptions for another 12 years.
4. Private Retirement Scheme (PRS) and Deferred Annuity Contributions Extended
To encourage retirement savings, the income tax relief on PRS contributions and deferred annuity premium payments will remain in place until the 2030 assessment year. This extension provides Malaysians more time to prepare for their financial future.
5. National Education Savings Scheme (SSPN) Tax Relief
The tax relief on net savings in SSPN has been extended for three more years, continuing to offer parents and guardians incentives to save for their children’s education.
6. Up to RM7,000 in deduction for housing loan interest payments
If you’re one who’s looking to buy your first home, this is for you to take note of.
For residential properties valued at RM500,000 or less, buyers can enjoy a tax deduction of RM7,000, while properties priced between RM500,000 and RM750,000 will be eligible for a RM5,000 tax deduction.
However, here are the conditions that has to be met beforehand:
- The property must not be used for any commercial purposes
- The sales agreement must be signed between January 1, 2025, and December 31, 2027
- The personal tax deduction is applicable for three consecutive tax years, starting from the first year of housing loan interest payment
- Two or more individuals can apply for a tax deduction on the same property’s loan interest based on the interest-sharing principle
MORE TO FOLLOW.
