Personal Income Tax 2016 Guide Part 4

Personal Income Tax 2016 Guide Part 4

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  Personal Income Tax 2016Guide PART 4
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  Tax Reliefs ForYear Of Assessment 2015 (Tax Filed In 2016)  What is a income tax relief? Tax reliefs are set by LHDN, where a taxpayer is able to deduct a certain amount for money expended in that assessment year, from the total annual income. These are for certain activities or behaviours that the government encourages or even necessities or burdens to lighten our financial loads.  For income tax Malaysia, Tax reliefs can help reduce your chargeable income, and thus your taxes. If planned properly, you can save a significant amount of taxes.
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   In ourexample, a taxpayer would have been taxed about 10% of his total chargeable income of RM84,300 if he had claimed no tax reliefs at all.  However, with the self & dependent tax relief of RM9,000, life insurance & EPF relief at RM6,000, and special tax relief of RM2,000, his total chargeable income is now RM67,300, hence, he would only be taxed 7% of his chargeable income.
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  Other than theabove three common tax reliefs, there are many other reliefs tax payers in Malaysia can maximise. Refer to this list of the income tax relief 2016 Malaysia: Individual Relief Types Amount Self and dependent RM9,000 Special relief [THIS YEAR ONLY] Eligibility: Earning RM8,000 per month or below (aggregate income of up to RM96,000 annually) RM2,000 Insurance & other policies Life insurance and EPF RM6,000 Deferred annuity and Private Retirement Scheme (PRS) RM3,000 Insurance premium for education or medical benefit RM3,000
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  Applicable to certaintaxpayers Husband/Wife/Alimony payments RM3,000 Medical expenses for parents RM5,000 Education fees (Individual) RM5,000 Medical expenses for serious diseases RM6,000 Complete medical examination RM500 Purchase of books, journals, magazines and publications RM1,000 Purchase of personal computer (once in every 3 years) RM3,000 Purchase of sport equipment for sport activities (i.e. racquets, balls, golf sets) RM300 Disabled individual RM6,000 Disabled wife/husband RM3,500 Basic supporting equipment (for disabled self, spouse, child or parent) RM6,000
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  Applicable to taxpaying parents Ordinary child relief RM1,000/per child Each unmarried child of 18 years and above who is receiving full-time education ("A-Level", certificate, matriculation or preparatory courses) RM1,000/per child Each unmarried child of 18 years and above that is: (i) receiving further education in Malaysia for diploma or higher (excluding matriculation/preparatory courses) (ii) receiving further education outside Malaysia for degree or its equivalent (including Master or Doctorate) (iii) the instruction and educational establishment shall be approved by the relevant government authority RM6,000/per child Disabled child RM6,000/per child Additional exemption per unmarried disabled child age 18 years old and above, who is pursuing: (i) diplomas or above qualification in Malaysia (ii) bachelor degree or above outside Malaysia in programme and in Higher Education Institute that is accredited by related Government authorities RM6,000/per child Net saving in SSPN's scheme RM6,000
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   There reallyare a lot of tax reliefs and if you plan your reliefs effectively every year, you could be saving thousands in taxes every year. Quick tips On top of just looking at tax reliefs, how you file can make a difference. For married taxpayers, you need to consider whether to file for joint or separate assessment to maximise on the tax reliefs such as spouse relief, and also which spouse to claim for child relief. Depending on the income differences between the spouses claiming joint or separate can have a big impact on your tax savings.
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  Thank You… SOURCE :WWW.IMONEY.MY/ARTICLES/INCOME-TAX-2016/TAX- RELIEFS-FOR-YEAR-OF-ASSESSMENT-2015 PART 5 COMING SOON