Everything You Can Claim In 2021 For YA 2020
It’s tax season again for Malaysians earning over RM 34,000 for the Assessment Year (YA) 2020. Tax Residents can do so on the ezHASiL portal by logging in or registering for the first time.
If you have received your Income Tax Return Form (EA), you can start filing your returns now, until the April 30, 2021 deadline.
This year 2020, new tax breaks have been introduced to ease the financial and economic burdens of Malaysians induced by COVID-19. Claiming these incentives can help you lower your tax rate and pay less overall taxes.
Here is the full list of LHDN’s tax breaks for YA 2020. Note that anything you claim below must be supported by proof of documentation or a receipt in the event of a tax audit.
Self, parents and spouse
1. Automatic individual relief: 9,000 RM
Each time you complete the LHDN e-filing form, you will be entitled to an automatic tax relief of RM 9,000.
2. Continuing education costs (auto): ≤ 7,000 RM
You can claim tax relief of up to RM7,000 if you pay for your own continuing education courses at a recognized higher education institution in Malaysia.
If you are pursuing a master’s or doctoral degree, any degree program is eligible. For undergraduate or lower degrees, only law, accounting, Islamic finance, technical, vocational, industrial, scientific or technological courses can be claimed.
Medical expenses for parents: ≤RM5,000
If your parents have a health problem requiring specific treatment proven by a licensed physician, you can claim up to RM 5,000.
This includes all expenses incurred to purchase materials, care or treatment for their condition. Your parents must also reside in Malaysia where the treatment is also provided locally.
Healthy elderly parents: RM1,500 per parent
If your parents are healthy, you can also claim tax relief of up to RM 3,000 (RM 1,500 per parent) if they:
- Are your biological or legally adoptive parents?
- Are Malaysian residents aged 60 and over;
- Have not been claimed for the medical expenses of the parents mentioned above;
- Not have a cumulative annual income greater than 24,000 RM.
Each sibling must divide the claim amount equally when claiming the same parent.
4. Spouses and Alimonies: 4,000 RM
Having a spouse with no source of income or who does not earn enough to be taxable entitles you to a deduction limited to RM4,000.
This relief can also be granted by husbands who pay alimony to their ex-wives, but only if there are formal agreements to confirm it.
5. Medical expenses for yourself, your spouse or your child: ≤6,000 RM
You can claim tax relief of up to RM6,000 for yourself, your spouse, or your children undergoing medical treatment for serious or difficult-to-treat illnesses. These diseases include AIDS, Parkinson’s disease, cancer, chronic liver disease, leukemia, heart attack, major organ transplant, etc.
For YA 2020, the cost of fertility treatments like IVF or IUI undergone by married couples has also been added to this category.
In this category, up to relief RM500 is dedicated to a comprehensive medical examination for yourself, your spouse or your child. Examinations should be performed at a medical facility registered with the Ministry of Health (MOH).
Way of life
6. Lifestyle Purchases for yourself, your spouse or your child: ≤RM2 500
Up to RM 2,500 in tax relief can be claimed for the purchase of lifestyle equipment for personal use by you, your spouse, or your children. Articles include:
- Reading material such as books, journals, magazines, print newspapers and other publications (electronic journals are excluded at this time);
- Personal computer, smartphone or tablet;
- Membership in a gymnasium and purchase of sports equipment;
- Internet invoices under your own name.
7. Lifestyle shopping for technology: ≤RM2 500
You can claim an additional 2,500 RM in Lifestyle Relief if you purchased a personal computer, smartphone or tablet between June 1 and December 31, 2020.
This was made available as part of the PERMAI assistance program to assist the WFH and online schooling arrangements during the AGC.
8. Nursing equipment: ≤1,000 RM
Breastfeeding mothers can deduct up to RM 1,000 if you have purchased personal breastfeeding supplies for your child aged 2 and under.
9. Child care expenses: ≤3,000 RM
Parents who send their children to a nursery or kindergarten can receive tax relief limited to RM3,000. This amount has been increased by 1000 RM from YA 2019 in this category.
The deduction can only be claimed by the mother or father of the child if the couple chooses to file separately.
9. SSPN ≤8,000 RM
The SSPN (Skim Simpanan Pendidikan Nasional) is a savings plan that encourages parents to invest in their children’s higher education.
Parents who have contributed can get relief of up to RM8,000 for their net annual savings (total deposit in 2020 minus total withdrawal in 2020).
10. Unmarried child under 18: 2,000 RM
Parents can receive tax relief of up to RM2,000 for each unmarried child under the age of 18.
11. Child aged 18 and over pursuing full-time studies
Child aged 18 and over in pre-U classes: 2,000 RM
RM2,000 can be deducted for parents of children aged 18 and over who take preparatory courses such as foundation, A-Levels, matriculation, etc.
Child aged 18 and over continuing his studies: 8,000 RM
A tax deduction of RM 8,000 is claimed for parents of unmarried children aged 18 and over if they are full-time students and are pursuing:
- A degree or more (excluding the preparatory courses mentioned above) in Malaysia;
- An undergraduate, masters or doctoral degree (or its equivalent) outside of Malaysia;
- Any course in higher education institutions recognized by the Ministry of Higher Education (MOHE).
Insurance and investments
12. Life insurance, EPF / approved scheme
Life insurance for retired civil servants ≤7,000 RM
Retired civil servants receiving a pension can claim tax relief of up to RM7,000 for their life insurance premiums. However, those who belong to this group are not eligible for EPF contribution relief.
Employee life insurance: ≤3,000 RM
Private sector employees and civil servants without a pension are entitled to tax relief of up to RM3,000.
EPF of employees: ≤4000 RM
These workers can also claim up to RM4,000 for their contributions to the PEF or other approved schemes. These investments include self-contributions to the EPF without the employer’s contribution.
13. Deferred annuity and PRS: ≤3,000 RM
Contributing to the deferred annuity scheme or the PRS (Private Retirement Scheme) entitles you to tax relief limited to RM3,000. This relief is only in effect from YY 2012 to 2021.
14. Education and medical insurance: ≤3,000 RM
Tax relief of up to RM3,000 can be claimed if you pay insurance premiums related to education or medical benefits for yourself, your spouse or your child.
SOCSO (Social Security Organization) contributions can be claimed as relief limited to RM250 for this YA.
16. Equipment for yourself, spouse, child or disabled parent: ≤6,000 RM
Tax relief limited to RM6,000 is available for the purchase of special support equipment for yourself, your spouse, children or parents with disabilities.
To be eligible, people with disabilities must be registered with the Department of Social Welfare (JKM) and be OKU certified.
17. Disabled person (self): RM6,000
If you are a disabled person registered with the JKM, you are entitled to an additional deduction of RM6,000 for this relief.
18. Disabled husband / wife: RM 3,500
You are entitled to a deduction of RM 3,500 if you have a disabled spouse.
19. Disabled children
Help for disabled children: 6000 RM
Parents whose unmarried child is physically or mentally disabled are entitled to a tax break of RM6,000 regardless of their age. Children must also be certified by JKM to be a person with a disability.
Disabled child aged 18 and over pursuing higher education: RM8,000
Another exemption of RM8,000 applies for an unmarried disabled child receiving full-time education in Malaysia or abroad. This deduction is an addition to the allowance for disabled children if they are:
- Pursue full-time higher education for one degree or more in Malaysia;
- Take a full-time master’s or doctoral course outside Malaysia;
- Serve under acts or articles to qualify in a trade or profession in Malaysia.
Local tourism spending
20. Domestic travel expenses ≤1,000 RM
You can claim up to RM 1,000 for domestic travel expenses if you stay at a registered hotel or purchase entrance fees to tourist attractions.
This program was used to help boost the tourism sector as part of the 2020 Economic Stimulus Package and has been extended until December 31, 2021.
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Failure to report or file your tax return form will subject you to a penalty of RM200 to 20,000, jail time, or both.
If you haven’t done so yet or aren’t sure how, here’s a guide you can follow to register for income tax for the first time.
- You can read more about what we wrote about taxes here.
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