Remember to take full advantage of the tax reliefs available in filing your personal tax returns in 2022.
It is that time of the year where you need to fulfil your duty as a Malaysian individual if you are earning income.
E-filing with the Inland Revenue Board of Malaysia (IRBM) will only be available from March 1, 2021 and you must ensure that you submit your filing by April 30, 2022.
For individuals filing their tax returns, you have some personal reliefs that you can claim, such as personal tax relief, medical and insurance premiums paid during 2021.
Additional relief is available to further reduce your tax burden for caring for your parents, spouse and children.
Some changes were made to reduce some of the taxpayer’s financial burden and adjusting to life during the pandemic.
Tax reliefs for taking care of your parents
With a growing ageing population, many of us are required to care for our ageing parents.
It can be a privilege to spend time with an older parent. However, it is also a huge responsibility and takes a lot of time, energy and money.
If you are caring for an elderly or sick parent, you can get a tax break to help relieve some of your financial challenges.
Effective from the Year of Assessment (YA) 2021, the deduction on the expenses incurred by an individual for the medical treatment, special needs and carer for his parents is increased to RM8,000, an increase of RM3,000 from the previous YA.
The amount includes parents’ medical treatment, limited dental treatment such as tooth extraction, filling and scaling services as well as care services.
Expenses for caregiving include nursing home or home caregivers, including cost of foreign hired caregivers with valid visas or special work permits.
However, it shall not include tax payers and taxpayer’s spouse or children. Note that parents who are physically and mentally healthy who may receive such care do not qualify for this deduction.
Tax reliefs if you have children
Having children is costly, and to reduce the financial burden will encourage better childcare.
For each child below 18 years old, taxpayers can claim relief of RM2,000.
For children above 18, the taxpayer can claim up to RM8,000, with the condition that the child is studying or serving under tutelage in a professional trade.
In addition, if you have children up to age six who attend registered child care centres or kindergartens, you can claim relief of up to RM3,000 for the expenses incurred.
Since YA 2017, to support mothers in breastfeeding their young children, breastfeeding mothers can claim relief for the purchase of breastfeeding equipment (such as breast pump kit, milk collection and storage and cooler bag) with proof of receipt.
The relief is up to RM1,000 allowed in total and only claimable once every two years.
One special tax relief that parents should consider is savings for their children in the Skim Simpanan Pendidikan 1Malaysia (SSPN) account.
While the child reliefs mentioned earlier can only be claimed by one parent, the relief of up to RM8,000 for savings in SSPN can be claimed by both parents for their respective contributions.
This is provided that each parent has contributed a net deposit of the claimed amount, even for the same child. This relief has been extended a few times, and the latest extension is to YA 2022.
Reliefs available for self
Regardless if you have any such dependents or expenses, you are entitled to RM9,000 relief where evidence of expenses incurred is not required.
However, for the rest of the reliefs, you are required to provide supporting records.
To provide further support for those with disabilities, the government has granted added reliefs for the taxpayers.
Except for the purchase of equipment for disabled use, the rest of the reliefs given do not require proof of expenses incurred.
That summarises the reliefs you can claim in filing for your individual tax return this year based on the latest personal tax filing information updated by the IRBM on January 20, 2022.
Remember to keep all receipts and supporting records where applicable for seven years, which you will need to produce in the event that the IRBM wants to do a tax audit on you.