The tax filing season can be a stressful time for individual taxpayers, and the common objective among taxpayers often revolves around reducing income tax burdens and ultimately paying less income tax. However, many taxpayers often lack awareness of updates and changes to tax reliefs, resulting in missed chances for potential tax savings during the filing process. In this article, we will highlight to you some often overlooked tax reliefs, ensuring that you do not miss out on claiming any eligible tax relief during this year’s filing!
Private Retirement Scheme (PRS)
Individuals who contribute to their PRS funds can claim personal tax relief of up to RM3,000 per year. This tax relief was specially introduced by the government to encourage individuals to have an additional savings scheme and stands as one of the commonly overlooked tax reliefs for taxpayers. For taxpayers, this tax relief is a plus since it allows them to save more for retirement while still claiming yearly tax relief. For example, if your tax bracket is 19%, your RM3,000 PRS contributions will give you tax savings of RM570. Additionally, this tax relief is available until the year of assessment of (YA) 2025.
Medical expenses on serious diseases, fertility treatment and vaccination
With effective from YA 2023, the RM8,000 cap on tax relief for medical expenses related to serious diseases, fertility treatment, and vaccinations has been increased to RM10,000. Additionally, the scope of medical expenses has been expanded to include intervention expenditures for Autism, Attention Deficit Hyperactivity Disorder, Global Development Delay, Intellectual Disability, Down Syndrome and Specific Learning Disabilities, which are limited to RM4,000.
Lifestyle relief and additional lifestyle relief – related to sports activity
Despite the fact that this tax relief is widely known, many taxpayers remain unaware of the eligibility criteria, which leads to an underutilization of this tax relief. Basically, taxpayers can enjoy tax relief of up to RM2,500 on lifestyle expenses incurred for themselves, their spouse and/or children. This includes:
- Books, journals, newspapers, or other similar publications (both physical and e-books)
- Personal computer, smartphone or tablet
- Sports equipment and gym membership
- Internet subscription fee
Another tax relief that most taxpayers might overlook is the additional tax relief of RM500 for the purchase of sports equipment, rental/entry fees for sports facilities and registration fees in sports competitions. Taxpayers are allowed to claim this relief in addition to the existing lifestyle relief, provided that the total amount claimed under this relief has not been claimed under the existing lifestyle tax relief.
Electric vehicle (EV) expenses
Although this relief was introduced in 2022, many people tend to overlook it and may not keep any relevant receipts to claim for tax deductions. This relief allows individuals to claim a deduction of up to RM2,500 for expenses incurred for EV charging facilities, including installation, rental, hire-purchase of equipment, or subscription fees. Additionally, in an effort to promote the usage of EVs, the government has extended this tax relief to YA 2027.
There are numerous other tax reliefs that have not been addressed in this article. If you want to learn more about the available tax reliefs to maximize your tax savings, subscribe to TaxPOD now to access decades of tax-saving knowledge at your convenience, anytime and anywhere. Visit https://taxpod.com.my/taxknowledge now!
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