9th October 2026 - 4 min read
Individual relief, the part of your income that every taxpayer gets tax-free, is going up from RM9,000 to RM12,000 under Budget 2027. It’s the first increase since 2010, and you don’t need any receipts to claim it.
Prime Minister Datuk Seri Anwar Ibrahim announced the change when he tabled Budget 2027 in the Dewan Rakyat on 9 October. He also cut the tax rate for two income bands. Anwar said the higher relief and lower rates together will give around five million taxpayers up to RM1,600 more to spend.
Several other reliefs will cover more of the things you pay for, such as sports shoes, AI subscriptions, and your children’s tuition. Anwar didn’t give a start date, so these changes have been announced but aren’t in force yet.
Your income tax is worked out on your chargeable income. That’s your yearly income after your reliefs are taken away. With RM3,000 more relief, your chargeable income drops by RM3,000, so you pay tax on less money.
How much you save depends on your tax band. Malaysia taxes income in layers called bands, and each band has its own tax rate. The higher your band, the higher the rate, and the more you save. The table shows the saving for each band, based on our own calculation.
| Your Chargeable Income | Tax Rate For This Band | Tax You Save On The Extra RM3,000 (Our Calculation) |
|---|---|---|
| RM5,001 to RM20,000 | 1% | RM30 |
| RM20,001 to RM35,000 | 3% | RM90 |
| RM35,001 to RM50,000 | 6% | RM180 |
| RM50,001 to RM70,000 | 11% | RM330 |
| RM70,001 to RM100,000 | 18% (new rate) | RM540 |
| RM100,001 to RM150,000 | 24% (new rate) | RM720 |
We worked out each saving by multiplying RM3,000 by the tax rate for that band. This assumes your chargeable income stays in the same band. The rates for RM70,001 to RM100,000 and RM100,001 to RM150,000 are the new Budget 2027 rates. Each one is a percentage point lower than today’s 19% and 25%.
People in these two bands save in two ways, because they get the extra relief and the lower rate. Take someone whose chargeable income is RM80,000 under today’s rules. They pay RM5,600 in tax now. With RM3,000 more relief, their chargeable income falls to RM77,000, and at the new 18% rate they’d pay RM4,960. That’s RM640 less a year (our calculation, before any rebates or zakat).
Chargeable income of RM5,000 or less isn’t taxed at all, so people in this group won’t see a change in their tax bill.
Five reliefs you can already claim will cover more of what you spend. These need receipts, unlike individual relief, and each one has its own limit. Anwar didn’t say whether these limits will change.
The sports equipment relief will cover sports shoes. The lifestyle relief will cover AI subscriptions, such as ChatGPT or Gemini, as well as vaccination costs and the cost of adopting a pet from a registered centre.
For families, the relief for course fees will cover all fields of study and your children’s tuition classes. Medical relief will cover care after giving birth. The relief for looking after your parents and grandparents will cover their general care, as well as their medical bills.
Tax changes in a Budget usually start from the next year of assessment, which is the year of income you’re taxed on. If that happens here, the new rules will cover money you earn and spend in 2027, and you’ll claim them when you file your taxes in 2028.
This means your next tax filing stays the same. When you file in 2027 for your 2026 income, you’ll still get RM9,000 in individual relief, and the current list of reliefs applies.
You’ll need receipts to claim the new items, such as running shoes, an AI subscription, or a pet adoption fee. Keeping them in one folder or phone album from 1 January 2027 makes filing in 2028 easier. Our income tax relief guide lists everything you can claim now, and the personal income tax guide explains how filing works.
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As a creative content writer, Eloise has covered finance, business, lifestyle topics, and even moonlights as a singer-songwriter outside of RinggitPlus. Her current interests are learning the best ways to optimise spending and credit card hacks to gain more airline miles.
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