What kinds of tax deductions and rebates can be claimed?


Tax Deductions

The following compulsory and optional deductions are deducted from your taxable income to arrive at your chargeable income, on which the amount of tax payable will be calculated. Employees can claim optional deductions by submitting TP1 Form to the employer. 


Compulsory Deductions


Deduction
Amount limited to (RM)
Individual 
Deduction of RM 9,000 for an individual in respect of himself and his dependent relatives is granted automatically.
9,000
Spouse
Deduction of RM 4,000 is given in respect of a spouse living together in the basis year on condition that the spouse has no source of income/total income or has elected for joint assessment.
4,000
Children 
See here for more details and additional deductions in relation to children.
2,000
Contribution to EPF or Other Approved Scheme and Life Insurance
Total deduction for the payment of contributions to the EPF or any other approved scheme and life insurance premiums is limited to RM 6,000 per year.
6,000
Disabled Person
Additional deduction given to disabled person. 
6,000
Disabled Spouse
Additional deduction given to an individual living with a disabled spouse. 

3,500


Optional Tax Deductions


Deduction
Amount limited to (RM)
Medical Treatment, Special Needs or Carer Expenses of Parents
Medical treatment, special needs and carer expenses for parents are limited to RM 5,000 in a basis year. Medical expenses which qualify for deductions include:
  • medical care and treatment provided by a nursing home; and
  • dental treatment limited to tooth extraction, filling, scaling and cleaning but not including cosmetic dental treatment.
The claim must be supported by a certified medical practitioner registered with the Malaysian Medical Council that the medical conditions of the parents require medical treatment or special needs or carer.
The parents shall be resident in Malaysia. The medical treatment and care services are provided in Malaysia.
In the case of carer, shall be proved by a written certification, receipt or copy of carer’s work permit. “Carer” shall not include that individual, husband, wife or the child of that individual.
5,000
Parental Care
New personal deduction of RM 1,500 for each parent is given to a resident taxpayer subject to the following conditions:
  • Such taxpayer does not claim expenses on medical treatment and care of parents;
  • Parents are residents and aged 60 years and above;
  • Parents have an annual income not exceeding RM 24,000 per annum each; and
  • Parents are the legitimate natural parents/foster parents in accordance with the respective law subject to a maximum of 2 persons.
  • This relief can be shared with other siblings provided that the total relief claimed shall not exceed RM 1,500 for each parent.
3,000 total (1,500 for each parent)
Basic Supporting Equipment
The purchase of any supporting equipment for one’s own use, if he/she is a disabled person or for the use of his/her spouse, child or parent, who is a disabled person may be claimed but limited to a maximum of RM 6,000 in a basis year. Basic supporting equipment includes haemodialysis machine, wheelchair, artificial leg and hearing aid but excludes optical lenses and spectacles
6,000
Higher Education Fees (Self)
Payment of annual fee limited to RM 7,000 is allowed as a deduction for any course of study in an institution or professional body in Malaysia recognized by the Government of Malaysia or approved by the Minister of Finance for the purpose of enhancing any skill or qualification:
  • up to tertiary level (other than Master's and Doctorate) in law, accounting, Islamic finance, technical, vocational, industrial, scientific or technology; or
  • any course of study at Master's or Doctorate level.
7,000
Medical Expenses on Serious Diseases
Medical expenses on serious diseases include the treatment of acquired immune deficiency syndrome (AIDS), Parkinson’s disease, cancer, renal failure, leukaemia and other similar diseases.
‘Other similar diseases’ such as heart attack, pulmonary hypertension, chronic liver disease, fulminant viral hepatitis, head trauma with neurological deficit, brain tumour or vascular malformation, major burns, major organ transplant or major amputation of limbs. Amount expended on own self, husband/wife or child is deductible up to a maximum of RM 6,000.
6,000
Complete Medical Examination
Amount expended on own self, husband/wife or child for complete medical examination is deductible up to a maximum of RM 500. The total deduction for medical expenses on serious diseases and complete medical examination is limited to a maximum of RM 6,000.00 a year.
Example: Person claims RM 5,900 for treatment for Parkinson’s. Therefore, he can only claim a deduction of RM 100 for medical examinations.
500
Net Deposit in Skim Simpanan Pendidikan Nasional (SSPN)
Amount deposited in SSPN by an individual for his children’s education is deductible up to a maximum of RM 6,000 per year. The deduction is limited to the net amount deposited in that basis year only (deposits less withdrawals for the year).
This deduction has effect for the years of assessment 2012 until 2017.
6,000
Payment of Alimony to Former Wife
Payment of alimony to a former wife is deductible provided that the total deduction for wife (in paragraph 4.4.1 (b)) and alimony payment is limited to RM 4,000 per year. Voluntary alimony payment to a former wife under a mutual agreement but without any formal agreement does not qualify as a deduction.
Note: Payment of alimony to former wife is not allowed in the case where the employee claimed deduction for wife.
4,000
Life Insurance
Total deduction for the payment of life insurance premiums and contributions to the EPF or any other Approved Scheme is limited to RM 6,000 per year.
6,000
Contribution to a Private Retirement Scheme and Payment of Deferred Annuity
Deduction on contribution to Private Retirement Scheme approved by the Securities Commission under The Capital Markets and Services Act 2007 or payment of deferred annuity premium or both limited to RM 3,000 per year (for 10 years from year assessment 2012 until year assessment 2021).
3,000
Education and Medical Insurance
A deduction not exceeding RM 3,000 per year for insurance premiums in respect of education or medical benefits for an individual, husband, wife or child.
3,000
Interest on Housing Loan
A deduction not exceeding RM 10,000 per year is given on housing loan interest for house purchased from developer or third party subject to the following conditions:
  • the taxpayer is a Malaysian citizen and a resident;
  • limited to one residential house;
  • has not derived any income; and
  • sale and purchase agreement is executed between 10 March 2009 and 31 December 2010.
The tax deduction is given for 3 consecutive years from the first year the housing loan interest is paid.
10,000
SOCSO Payment
A deduction not exceeding RM 250 per year for payments to the Social Security Organisation (SOCSO).
250



Lifestyle Tax Relief
Combined tax relief for reading materials, computers and sports equipment (Includes purchase of newspapers, smartphones and tablets, internet subscriptions & gymnasium membership fees)  
2,500
Breastfeeding
Purchase of breastfeeding equipment
1,000 (once every 2 years
Early Education 
For individual taxpayers who enroll their children aged 6 years and below in registered nurseries & preschools
1,000




Tax Rebates

Unlike tax deductions which are reductions in your chargeable income, tax rebates are further reductions in the amount of tax you pay after you have calculated your tax for the year.


Rebate on Zakat

Zakat can be deducted from the employee’s remuneration (in which case the amount of zakat should appear on the payslip and EA Form), or claimed through TP1 form.


Rebates for Individuals with Chargeable Income less than RM35,000

A rebate of RM 400 is available to individuals with a chargeable income less than RM 35,000. Where the spouse does not receive an income or is jointly assessed, a further RM 400 rebate can be claimed.





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