Save tax by claiming the Reliefs
In preparing personal income tax return for the Year of Assessment (YA) 2025, which will be filed in 2026, taxpayers should take note of several updates to the personal tax relief framework. These changes include higher relief limits for disabled individuals, an expanded scope of qualifying expenses for medical insurance, and the introduction of a new relief for first time homeowners. The revisions are intended to provide additional tax support to individuals while encouraging greater financial protection and home ownership.
Personal Tax Reliefs for YA 2025
Individual & Family
1. Individual & Department Relatives: RM9,000 (granted automatically).
2. Disabled Individual: RM7,000 (increased from RM6,000).
3. Spouse / Alimony Payment: RM4,000 (for a non-working spouse or alimony to a former wife).
4. Disabled Spouse: RM6,000 (increased from RM5,000).
5. Child Relief (Unmarried):
i. Under 18 years old: RM2,000.
ii. 18+ years in higher education (Diploma, Degree, and above): RM8,000.
6. Disabled Child: RM8,000 if the child is 18+ and pursuing higher education.
7. Childcare Fees: Up to RM3,000 for fees paid to registered childcare centres or kindergartens for children aged 6 and below.
8. Breastfeeding Equipment: Up to RM1,000 for mothers with children aged 2 and below (claimable once every two years).
Medical & Care
1. Medical Expenses (Self, Spouse, or Child): Up to RM10,000. Covers serious diseases, fertility treatment, and dental treatment (excluding cosmetic).
i. Sub-limit: RM1,000 for full medical check-up, mental health consultations, vaccinations, and self-testing medical devices (e.g., glucometers, thermometers).
ii. Sub-limit: RM6,000 for diagnostic assessments or early intervention for children with learning disabilities.
2. Medical Expenses for Parents & Grandparents: Up to RM8,000 for medical treatment, special needs, and carer expenses (expended to include grandparents in YA 2025).
3. Basic Supporting Equipment: Up to RM6,000 for equipment for a disabled self, spouse, child, or parent.
Education, Lifestyle & Enviroment
1. Education Fees (Self): Up to RM7,000 for approved courses, including upskilling (restricted to RM2,000 for upskilling).
2. Lifestyle Relief: Up to RM2,500 for books, journals, smartphones, tablets, computers and internet subscriptions.
3. Sport Relief: Up to RM1,000 for sports equipment, facility rentals, competition entry fees, or gym membership (scope expanded to include expenses for parents).
4. Green Tech / EV: Up to RM2,500 for EV charging facility expenses and purchase of domestic food waste composting machines.
5. Housing Loan Interest: Up to RM7,000 (for houses ≤RM500K) or RM5,000 (for houses RM500K - RM750K) for first-time homeowners (agreements signed 2025-2027).
Insurance & Savings
1. Life Insurance & EPF: Up to RM7,000 total.
i. Pensionable officers: Up to RM7,000 for life insurance premiums.
ii. Private sector / others: Up to RM3,000 for life insurance and RM4,000 for EPF.
2. Education & Medical Insurance: Up to RM4,000 (increased from RM3,000).
3. Private Retirement Scheme (PRS) & Deferred Annuity: Up to RM3,000 (extended until YA 2030).
4. SSPN (National Education Savings Scheme): Up to RM8,000 (net deposit only; extended until YA 2027).
5. SOCSO / PERKESO: Up to RM350 for employee contributions.
For further guidance, please refer to : LHDN Tax Relief Guide.
Record Keeping
Under the Income Tax Act 1967, taxpayers are required to maintain proper records to support the information declared in their tax returns. Section 82 of the ITA 1967 provides that every taxpayer must keep sufficient records, including receipts, invoices, statements and other relevant documents, to enable the income and allowable deductions reported in the tax return to be readily ascertained.
These records must generally be retained for seven (7) years from the end of the year of assessment to which the tax return relates. This requirement is particularly important in the event of a tax audit or investigation by the Inland Revenue Board of Malaysia, as failure to maintain adequate records may result in adjustments to the taxpayer’s income and potential penalties under the Act.