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Income Tax Malaysia

Income Tax Reliefs You Can Claim In 2023

What is the meaning of tax relief?

‘Tax relief’ means that you either: pay less tax to take account of money you’ve spent on specific things, like business expenses if you’re self-employed. get tax back or get it repaid in another way, like into a personal pension.

Come tax time, it can be a struggle trying to determine which expenses are claimable for tax relief that will allow you to reduce your taxes.

In Malaysia, personal deductions and reliefs can help reduce your chargeable income, and thus your taxes. If planned properly, you can save a significant amount of taxes. There are personal reliefs that every taxpayer in Malaysia can deduct once their income reaches the chargeable income level. It is important to note that manual BE forms need to be filed by 30th April 2023 and online e-BE forms need to be filed by 15th May 2023.

Malaysian Income Tax Relief 2023

Below are some reliefs to allow you better tax efficiency:

  1. Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz has announced that under Budget 2023, the government will reduce the tax rates for taxable income ranging between RM50,001 to RM70,000, and RM70,001 to RM100,000 by 2%. This will be beneficial to middle income earners allowing them higher future returns.
  2. Women planning to return to work after a career break will be entitled to income tax exemptions for five consecutive years of assessment from 2023 to 2028. This move is to encourage women back into the workforce. As of October 2022, women constituted 29 per cent of the composition of the BOD for 100 major public-listed companies.
  3. Dental treatment limited to tooth extraction, filling, scaling and cleaning but excluding cosmetic dental treatment expenses such as teeth restoration and replacement involving crowning, root canal and dentures.
  4. To encourage debtors to pay off their loans and promote saving habits, Budget 2023 provides income tax relief up to RM8,000 until YA 2024 for net annual savings in SSPN. This also includes 20% off outstanding PTPTN loan balance upon full settlement between 1 November 2022 to 30 April 2023 & 15% discount off outstanding PTPTN loan balance for debtors who pay off at least 50% of their remaining debt in a single payment or opt for salary deduction or scheduled direct debit between 1 November 2022 to 30 April 2023.
  5. Parents are entitled to an extension of tax relief for payment of nursery and kindergarten fees until YA 2024. This is to enable a support system for working parents. Parents could receive up to RM3,000 of tax relief for nursery and kindergarten fees for children aged 6 years and below. Please note that this is only applicable if the child is in a registered childcare facility.

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