How To Maximise Your Income Tax Refund Malaysia 2019 (YA 2018)

Here are some tax reliefs you can claim when filing your income tax for YA 2018. Whether you’re single, married, or have children, there are tax reliefs to help maximise your tax refund.

No-one likes seeing a chunk of their hard-earned salary being deducted for tax purposes. If you’re earning above RM34,000 per annum, you’re not going to escape paying your taxes, but what you can do is make sure you get the maximum possible tax refund back. You can do this by identifying all the tax reliefs and tax rebates you are eligible for and claim for them when you file your taxes.

Claiming for tax relief allows you to reduce your chargeable income, but how does this affect your tax refund? As you know, the amount of tax you are charged is based on your amount of chargeable income. If your chargeable income amount is lesser, you will have to pay less tax - sometimes, you may even be charged with a lower tax rate. The Inland Revenue Board explicitly shows the income tax rates for the current assessment year (YA), while we've also shown a comparison between the tax rates for YA 2018 and YA 2017.

For example, let’s say your annual taxable income is RM40,000. Based on this amount, the income tax to pay the government is RM1,000 (at a rate of 8%). However, if you claimed a total of RM11,600 in tax relief, your chargeable income would reduce to RM28,400. This would enable you to drop down a tax bracket, lower your tax rate to 3%, and reduce the amount of taxes you are required to pay to RM402.

However, since you are already paying income tax at a higher bracket every month via the monthly tax deductions (MTD) for salaried employees, it is highly likely that you are paying more income tax than you should be. This is where the government has the obligation to refund you the tax you’ve overpaid – which is why the more tax reliefs you claim for, the bigger your tax refund will be. If you're confused by all these different terms, make sure to check our Income Tax Glossary to set yourself straight. 

Here are some examples of tax relief that you can claim to maximise your tax refund in 2019 (for YA 2018). 

(Update 12/3/2019: An earlier version of the infographic stated an incorrect value for Breastfeeding Equipment, and has since been rectified. The error is regretted.)

What You Need To Know About Income Tax Reliefs In Malaysia

Lifestyle

You can get up to RM2,500 worth of tax relief for lifestyle expenses under this category. Buying reading materials, a personal computer, smartphone or tablet, or sports equipment and gym memberships for yourself, spouse, or child allows you to claim for tax relief. You can also claim for your monthly home Internet subscription. Yes, you get tax relief for just paying your monthly Internet bills from Unifi, Streamyx, and so on. It’s also the only utility payment you can get a tax relief for, so make sure you don’t miss out on claiming for it.

Deferred annuity/private retirement scheme

If you’re putting some money aside for a mutual fund or unit trust, why not consider investing in a deferred annuity or private retirement scheme (PRS) instead? These come with a tax relief of up to RM3,000 per year. This way you can maximise your tax refund and contribute towards your long-term savings at one go.

Education
  • For yourself, you can claim for a Master’s, Doctorate, or a non-degree at Master’s or Doctorate level for acquiring law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications (CLP, ACCA, etc) for up to RM7,000.
  • For your child, the conditions for tax relief are that your child has to be 18 years and above, unmarried, and in full-time education for A-Level, certificates, matriculation, or other preparatory courses. You can claim a higher limit for those receiving further education in Malaysia for diploma level or higher (excluding matriculation/preparatory courses) or outside Malaysia for degree level and above.
SSPN

SSPN stands for the Skim Pendidikan Nasional, or the National Education Savings Scheme. It is a savings plan introduced by PTPTN to enable parents to invest for their children’s higher education and can be opened with Maybank, Bank Islam, Agrobank, Bank Rakyat, or RHB Bank. As long as your total deposit in the year 2018 is larger than your total withdrawal, you’re eligible for a tax relief of your net balance up to RM6,000.

Zakat/fitrah

Do take note that, this is not a tax relief, but a tax deduction. Tax rebates are not deducted from your chargeable income like a tax relief is, but from your final tax amount at the end. So, if your amount taxed after taking all your claimed tax reliefs into account is RM402, you can claim a tax rebate for zakat up to the actual amount expended or the maximum of tax charged.

Keep Your Receipts!

When claiming for any purchases, premiums, donations, or fees, it’s crucial that you have the receipts to back your claims up. It is your responsibility to keep them for the next 7 years from the year of filing. If you fail to produce these receipts and should you be audited by the Inland Revenue Board, you must pay a penalty – so don’t try to claim for anything unless you know you have the receipt.

Don’t Lose Out – Get Your Tax Money Back

From single individuals to those married or married with kids, there are definitely tax reliefs to help reduce your tax burden and maximise your tax refund. When you file your income tax this 2019, make sure to have a good hard look at your expenditure from the year before so you don’t miss out on any tax relief you can claim for. Poring over your finances from last year probably won’t be fun, but at least you’ll know you can get the highest tax refund back possible!

More on Malaysia income tax 2019

Find more income tax related content in our Income Tax page.

0 comments

Agree or disagree with this post? Questions? You also have your word!

  • Lai

    I am divorced and has 3 kids. Does it mean I can deduct up to rm10k for life style (rm2.5k x 4)?

    Reply
    • Suresh Mohan Krishnan

      Hi Ms. Lai, you can only deduct 2.5k maximum on lifestyle claim - which includes internet, gym membership and books and magazines. You can deduct 2k for each child under 18, but remember if your husband is also claiming this relief for your kids, then you can only claim 50% on this. (i.e: (3 kids x 2k) / 2 claimants = 3k each). You can also claim your childcare fees, up to 1k spent on an approved childcare center/kindergarten. Note that alimony received is tax exempt. Also thank you, Ringgitplus and Jacie for this really good write-up.

      Reply
      • Genny

        Under what condition child relief only can claim?

        Reply
      • RinggitPlus

        Hi, Lai

        You can claim the lifestyle tax relief for yourself and your children. However, you can only claim up to RM2,500 as stated by LHDN.

        Thanks for the question and we hope this helps.

        Reply
      • Liu

        Hi, for those who work and get paid from foreign company which do not pay tax on behalf, what can she do?

        Reply
        • RinggitPlus

          Hi, Liu

          He or she still needs to declare their income regardless of whether they are working overseas or locally.

          Thanks for the question and we hope this helps.

          Reply
        • Vernon

          Can we claim for both father and mother if they are healthy and working? As we are giving monthly amount to them...

          Reply
          • RinggitPlus

            Hi, Vernon

            As long you can prove that you are taking care of your parents, you can claim the parental care tax relief.

            Thanks for the question and we hope this helps.

            Reply
          • Dan

            Hi! What's the exact salary amount where income tax will be deducted? I heard the numbers have changed. My gross salary is between 3000-3100 but income tax is not deducted, heard the minimum amount is around 3150 if im not mistaken. Pls clarify.

            Reply
            • Tony

              Hello Ringgit Plus!

              The lifestyle category is Rm2500 combined for self,spouse and child.

              Does it meant that house internet bills under my wife's name will be tax deductible for my income tax? Fyi, my wife is a homemaker and not claiming it.

              Thanks!

              Reply
              • RinggitPlus

                Hi, Tony

                Yes, you can claim it. Make sure you have the documentation for the tax relief.

                Thanks for the question and we hope this helps.

                Reply
              • Hasrul N.

                Hi, starting from YA2019, the EPF & Life Insurance are now being split. Up to RM4,000 for EPF + RM3,000 for life insurance/takaful.

                Reply
                • Indy

                  Hi Team,
                  Separate or combined tax assessment is better for working parents. One at 8% and the other at 24%. TQ

                  Reply
                  • RinggitPlus

                    Hi, Indy

                    This part depends on your preference and financial commitment. If you want to compile your tax easily, then a combine declaration will be better. If you need more information, you head to LHDN.

                    Thanks for the question and we hope this helps.

                    Reply
                  • Winnie

                    Hi, I bought a unit of low cost flat in month October 2018. It's cost RM158K, it is my first house, do I need declaration it?

                    Reply
                    • RinggitPlus

                      Hi, Winnie

                      This part depends on what is the purpose of the property. If this is for rental income, then yes you should declare the property. If it is for personal use, then you don't have to declare it.

                      Thanks for the question and we hope this helps.

                      Reply
                    • LEONG

                      Both my parent is not longer around. Can l claim tax relief of rm1500 for my mother in low which i have given her rm500 every month

                      Reply
                      • RinggitPlus

                        Hi, Leong

                        no, you can't do that as it requires proof that indeed the person that you care for to be around.

                        Thanks for the question and we hope this helps.

                        Reply
                      • Kuldeep

                        Hello Ringgit Plus!
                        Under lifestyyle category can I claim for my monthly mobile phone with data plan?

                        Reply
                        • RinggitPlus

                          Hi, Kuldeep

                          It is hard to say as some telcos like Digi said that their mobile plans are not eligible for tax relief. It is in your best interest to contact LHDN for more information.

                          Thanks for the question and we hope this helps.

                          Reply
                        • hanis

                          Hi,

                          Just wondering, smartwatch can be claimed under lifestyle category.?

                          Reply