Skim Simpanan Pendidikan Nasional (SSPN) will give you tax rebate of 13% for saving in SSPN. The limit of the tax rebate is up to RM3000 savings in SSPN.
Example:
Lets say you have saving of RM3,000 in SSPN for one child. The tax rebate you will get is
RM3,000 x 13% = RM390.
Return
The average return for SSPN is 3.5++% from 2004 – 2007.
tax time. i submit my tax using e-filling borang BE, i am shocked that my tax is still high to my standard. still wondering how to reduce my tax besides buying books, life insurance and medical check up for parents. why i don’t to pay for the government? because i don’t want to give a cent to the corrupt guys.
This is the second article in a series of four weekly articles to assist taxpayers in complying with their tax obligations.
ALL revenue income derived from a source within Malaysia are subject to tax unless specifically exempted. Foreign source income remitted into Malaysia are exempted from tax.
The classes of income that are subject to tax for an individual include the following:
Employment income
Employment income which must be reported in the employee’s tax return includes the following:
A Section 110 tax credit (27%) can be claimed against the income tax suffered on the dividend income. If a resident individual’s marginal tax rate is lower than 27%, the excess tax credit can either be refunded or used to set off against the tax payable on other sources of income.
Tax exempt and foreign dividends: These dividends are exempted from income tax and need not be declared in the tax return.
Expenses which are deductible against the dividend income are:
Rental income is required to be reported in the tax return and is normally treated as an investment income.
Expenses which are allowable against the rental income are:
The taxable income of a business is determined after deduction of the following:
http://biz.thestar.com.my/news/story.asp?file=/2008/3/24/business/20702241&sec=business
This article will consider the personal reliefs and tax rebates allowable, the residence status rules and the tax rates applicable to a resident individual.
Personal Reliefs for Individual
Personal Reliefs are only available to a tax resident in Malaysia and are deducted against the total income of the taxpayer. The reliefs claimable are as follows:
(Supporting documents are necessary for claiming the relief.)
Serious diseases
“Serious disease” include Acquired Immunity Deficiency Syndrome, Parkinson’s disease, cancer, renal failure, leukaemia and other similar diseases. “
Other similar diseases” in relation to serious diseases include heart attack, pulmonary hypertension, chronic liver disease, fulminant viral hepatitis, head trauma with neurological deficit, tumour in brain or vascular malformation, major burns, major organ transplant and major amputation of limbs.
Medical examination expenses
Complete medical examination for the purposes of the deduction under this paragraph would mean full medical check up as defined by the Malaysian Medical Council (MMC).
Parents
In a case where the receipt is issued in the name of the patient, the individual who is making the claim must obtain an endorsement on the receipt by the doctor to certify that the medical charges were paid by him.
Medical expenses which qualify for deductions would include:
Medical care and treatment provided by a nursing home; and
Dental treatment limited to tooth extraction, filling, scaling and cleaning but not including cosmetic dental treatment expenses such as teeth restoration and replacement involving crowning, root canal and dentures.
Further education fees
The course must be undertaken for the purpose of acquiring technical, vocational, industrial, scientific or technology skills or qualifications. Scientific skills mean the stuffy of the nature or behaviour of the material and physical universe such as studies in the field of biology, physics, chemistry mathematics, IT, engineering and medicine.
Reading material expenses
Expenses expended in the basis year for the purchase of books, journals, magazines and other similar publications (in form of hardcopy or electronic) for enhancing the knowledge.
Books would include school textbooks, periodicals, comics whether purchased locally or overseas but exclude newspapers or banned reading materials such as morally offensive magazines.
Personal computer
Personal computer includes laptop and desktop but does not include palmtop, Personal Digital Assistant (PDA) and its equivalent.
Skim Simpanan Pendidikan Nasional
This relief is given for amount deposited into Skim Simpanan Pendidikan Nasional established under the Perbadanan Tabung Pendidikan Tinggi Nasional Act 1997 for his or her child at maximum RM3,000.
However, this relief is restricted to the net amount deposited within a basis year.
Tax rebates
Tax rebates are deducted against the income tax charged.
Tax Residence Rules
Generally, an individual is treated as a resident if he satisfies one of the following conditions:-
He is present in Malaysia in that calendar year for a period or periods totalling 182 days or more;
He is in Malaysia in the calendar year for a period of less than 182 days but this period is linked by or to another 182 or more consecutive days (throughout which he is in Malaysia) as follows:-
i) in the calendar year immediately preceding that particular year; or
ii) in the calendar year immediately following that particular year.
Any temporary absence shall be taken to form part of the 182 days or that period, as the case may be, if he is in Malaysia immediately prior to or after that temporary absence and the temporary absence is for the following reasons:
Non-resident individual
Flat rate of 28% on the gross income without any reliefs.
The next article will look at how to compute the tax liability of an individual taxpayer.
Lee Voon Siong is the Executive Director of RKT Tax Consultants Sdn Bhd which is an independent member firm of RSM International, an affiliation of independent consulting and accounting firms with the seventh largest worldwide network. He can be contacted at leevs@rsmi.com.my.
