Certain tax deductions are available for children under the charge of the employee. The deduction reduces the employee's chargeable income and therefore their PCB. For tax purposes, a “child” is an “unmarried dependent legitimate child or stepchild or adopted child”. Please note that no deduction can be claimed if the child is in receipt of their own income and their total income (not including scholarships/grants) exceeds the amount of deduction that would otherwise be allowed.
Below the age of 18
For each child below the age of 18 you are allowed to claim RM2,000 annually.
18 and above (not in higher education)
For each child aged 18 and above in full time education (A-levels, foundation, etc) you can claim RM2,000 annually.
18 and above (in higher education)
For each child studying within Malaysia for a diploma or higher, you can claim RM8,000 annually.
For each child studying outside Malaysia for a degree or higher, you can claim RM8,000 annually.
Disabled Children
For each disabled child, you can claim RM8,000 annually irrespective of age.
For each disabled child in higher education, you can claim RM14,000 annually.
Which spouse should claim for child tax relief?
If the spouses are not separated, one spouse should claim for 100% of the tax deduction while the other spouse cannot claim (0%). it is advisable for the parent with the higher income to claim the child relief in order to minimise their tax liability. Spouses living together cannot claim 50% each. If the husband and wife are separated and both spending on the child's maintenance, they are allowed to claim 50% each.
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