Income Tax Relief: What Can You Claim In 2021 For YA 2020?

Category: Budgets & Tax

Do you know what is income tax relief? Tax reliefs are set by Lembaga Hasil Dalam Negeri (LHDN), where a taxpayer is able to deduct a certain amount for cash expended in that assessment year, from the total annual income. These are for certain activities that the government encourages to lighten our financial loads.

For income tax, Malaysia, tax reliefs can help reduce your chargeable income, and thus your taxes. If planned properly, you can save a significant amount of taxes.

Things to do now to maximise income tax relief

There are various items included for income tax relief within this category which are:

  • books, journals, magazines, printed newspapers
  • sports equipment and gym membership fees.
  • computer (annually)
  • payment of a monthly bill for internet subscription
  • Smartphones


The maximum income tax relief amount for the lifestyle category is RM2,500. So if you bought a computer that costs more than that, you can no longer include your gym membership, internet subscription, and others for income tax relief.

Do also take note:

If you have a golf club membership that also has gym facilities, it would not qualify for this income tax relief.

Here are some of the other things that you can claim for:

Tax Relief Year 2020
Individual Relief TypesAmount (RM)
Self and dependent9,000

Medical expenses for parents

OR

Parent

Limited 1,500 for only one mother

Limited 1,500 for only one father

5,000 (Limited)

OR

3,000 (Limited)

Basic supporting equipment for disabled self, spouse, child or parent6,000 (Limited)
Disabled individual6,000

Education fees (Self)

  1. Other than a degree at Masters or Doctorate level-for acquiring law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications;
  2. Degree at Masters or Doctorate level-for acquiring any skills or qualification
7,000 (Limited)
Medical expenses for serious diseases for self, spouse or child6,000 (Limited)
Medical expenses for fertility treatment for self or spouse
Complete medical examination for self, spouse, child (Limit to RM500)

Lifestyle:

  1. Purchase of books journals, magazines, printed newspaper and other similar publications (except banned reading materials) for self, spouse or child;
  2. Purchase of a personal computer, smartphone or tablet for self, spouse or child;
  3. Purchase of sports equipment for any sports activity as defined under the Sports Development Act 1997 (excluding motorized two-wheel bicycles) and gym memberships for self, spouse or child; and
  4. Payment of monthly bill for internet subscription
2,500 (Limited)
Lifestyle: Purchase of personal computer, smartphone or tablet for self, spouse or child and not for business use
(Additional deduction for purchase made within the period of 1st June 2020 to 31st December 2020)
2,500 (Limited)
Purchase of breastfeeding equipment1,000 (Limited)
Child care fees to a Child Care Centre or a Kindergarten3,000 (Limited)
Net saving in Skim Simpanan Pendidikan Nasional’s (SSPN) scheme8,000 (Limited)
  
Husband/wife/alimony payments4,000 (Limited)
Disabled wife/husband3,500
Each unmarried child and under the age of 18 years old2,000
Each unmarried child of 18 years and above who is receiving full-time education (“A-Level”, certificate, matriculation or preparatory courses).2,000

Each unmarried child of 18 years and above that:

  1. receiving further education in Malaysia in respect of an award of diploma or higher (excluding matriculation/ preparatory courses).
  2. receiving further education outside Malaysia in respect of an award of degree or its equivalent (including Master or Doctorate).
  3. the instruction and educational establishment shall be approved by the relevant government authority.
8,000
Disabled child6,000
Additional exemption of RM8,000 disable child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities8,000

Life insurance and EPF including not through salary deduction

  1. Pensionable public servant category
  • Life insurance premium
  1. Other than pensionable public servant category
  • Life insurance premium (Limited to RM3,000)
  • Contribution to EPF / approved scheme (Limited to RM4,000)
7,000 (Limited)
Deferred Annuity and Private Retirement Scheme (PRS) – with effect from year assessment 2012 until year assessment 20213,000 (Limited)
Insurance premium for education or medical benefit INCLUDING not through salary deduction3,000 (Limited)
Contribution to the Social Security Organization (SOCSO)250 (Limited)

Payment for accommodation at premises registered with the Commissioner of Tourism and entrance fee to a tourist attraction

(Accomodation expenses at premises registered with the Ministry of Tourism, Arts and Culture Malaysia and entrance fees to tourists attractions incurred on or after 1st March 2020)

Registered accomodation premises can be check thru link of : http://www.motac.gov.my/en/check/registered-hotel

1,000 (Limited)

Source: Inland Revenue Board of Malaysia

As a final note, when filing for your income tax remember to not under-declare your income. Many people tend to do so. You will then have LHDN come after you for all of your under-declared income down the road plus you will also be fined and risk being jailed.

Related: What Happens If You Miss The Tax Filing Deadline