6 Ways You Can Pay Less Income Tax In Malaysia
- By CompareHero.my
- April 8, 2021
If you’re a Malaysian who earns more than RM34,000 yearly, it’s time to file your income tax returns for the Year of Assessment (YA) 2020. So you should refer to your Income Tax Return (EA) form and complete your filing by April 30.
Ever wonder how you can maximise your tax deductions? It’s not that hard. Some of the lifestyle choices you’ve made in the past year can lead to tax reliefs and significant savings!
Contents
1. Take care of your parents
They cared for you when you were growing up, and now’s your chance to take care of them in their old age. There are also tax reliefs that you’re entitled to when it comes to parental care.
a) Medical expenses for your parents: Max. RM5,000 relief
If your parents are undergoing treatment for specific medical conditions in Malaysia, and this is proven by a certified medical practitioner, you can claim up to RM5,000.
b) Healthy parents: Max. RM1,500
If your biological or legally adoptive parents are Malaysian residents aged 60 and above, and they are in good health, you can claim up to RM1,500 each for your mum and dad.
Related: Tax Relief vs Tax Rebate: What’s The Difference?
If you’re paying for your own further education course at a recognised higher learning institution in Malaysia, you can claim up to RM7,000 in tax relief.
2. Invest in your education
There is always something new to learn in life – upskilling courses and university degrees to elevate your career, as well as books and articles to broaden your mind.
By improving yourself, you also claim for various tax reliefs.
a) Lifestyle purchases: Max. RM2,500
The lifestyle tax relief amounts up to RM2,500 a year. That’s why it’s important to save the receipts and bills for your purchases of:
- Books, journals, magazines, printed newspapers
- Sports equipment and gym membership fees
- Computer, smartphones, or tablets
- Monthly internet subscription
b) Lifestyle purchases for tech gadgets: Max. RM2,500
Claim an additional RM2,500 if you’ve bought a PC, smartphone, or tablet between 1 June and 31 December 2020.
c) Further education: Max. RM7,000
If you’re paying for your own further education course at a recognised higher learning institution in Malaysia, you’ll be entitled to claim a tax relief of up to RM7,000 (any Masters or Doctorate courses, or an undergraduate degree/diploma in law, accounting, Islamic financing, technical, vocational, industrial, scientific, or technology).
3. Be a nurturing parent
Besides the joy of watching your child grow up, you can enjoy tax reliefs as a parent.
a) Breastfeeding equipment: Max. RM1,000
Claim up to RM1,000 if you’ve bought breastfeeding equipment for your child (aged two years and below).
b) Childcare expenses: Max. RM3,000
If you’re sending your kids aged six years and below to a daycare centre or kindergarten, you can claim up to RM3,000.
c) Skim Simpanan Pendidikan Nasional: Max. RM8,000
If you have contributed to the Skim Simpanan Pendidikan Nasional (SSPN) for your child’s higher education, you can claim up to RM8,000.
d) Each unmarried child under 18: RM2,000
Get a tax relief of up to RM2,000 for each one of your unmarried children below 18 years old.
e) Disabled child: RM6,000
Parents with an unmarried child who’s physically or mentally disabled can claim for a tax relief of RM6,000, regardless of their age.
Related: #DigitalCareers: How To File Your Income Tax As A Freelancer
If you have unmarried children aged 18 and above who are full-time students that are pursuing a diploma course (or higher) in Malaysia, you can claim RM8,000 in tax relief.
4. Send your child to university
Give your kids a great education and enjoy these tax reliefs.
a) Each unmarried child aged 18 and above in Pre-U courses: RM2,000
If you have children aged 18 and above who are currently pursuing an A-Level, certificate, matriculation or preparatory course on a full-time basis, you can claim RM2,000 relief for each of them.
b) Each unmarried child aged 18 and above who is pursuing further studies: RM8,000
If you have unmarried children aged 18 and above who are full-time students that are pursuing a diploma course (or higher) in Malaysia, you are entitled to RM8,000 relief. If your child is studying for an undergraduate, Masters or Doctoral degree outside Malaysia, you can also claim RM8,000 relief.
Just make sure the institution of higher learning they’re studying in is recognised by the Ministry of Higher Education (MOHE).
c) Disabled child who is pursuing further education: RM8,000
Claim RM8,000 in tax relief if your unmarried and disabled child is receiving a full-time higher education in Malaysia or overseas.
Related: Income Tax For Foreigners Working in Malaysia
You can enjoy up to RM500 in tax relief if you, your spouse, or child has undergone a full medical checkup.
5. Take care of your health
Going for medical checkups and keeping your health in tip-top shape can be beneficial for your income tax deductions.
Medical expenses for yourself, spouse, or child: Max. RM6,000
If you, your spouse, or kids are undergoing medical/fertility treatments, you can claim up to RM6,000. Under this category, you can also enjoy up to RM500 relief if you, your spouse, or child has undergone a full medical checkup.
6. Go for a holiday
We could use a staycation after all that stay-at-home social isolation during various movement control orders. If you had travelled locally during YA 2020, you can benefit from this tax relief.
Domestic travel: Max. RM1,000
If you had stayed at a registered hotel or purchased entrance fees to tourist attractions during YA 2020, you can claim up to RM1,000 for domestic travel expenses.
Remember to file your income tax by April 30, 2021 at the ezHASiL platform.
Need more info about income tax filing? Check out these articles:
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5 Tips To Stop Living Pay Cheque To Pay Cheque
- By CompareHero.my
- April 7, 2021
You may be gainfully employed, but yet you live pay cheque to pay cheque. You may even be in a two income household where bot of you earn enough to put food on the table, and your two small children have everything they need, but some months you barely scrape by.
And you’re always just one emergency expense away from being completely wiped out. And emergencies do happen. But it’s probably our country’s rising cost of living that got you here in the first place.
Malaysia has changed and the government is making inroads into political and institutional reforms, but the persistent high cost of living remains an issue that policymakers have not been able to solve. It can safely be heard across the nation that being unable to keep up with rising prices boils down to three main issues of slower growth income, unaffordable property prices, and a weak ringgit. There are other contributing factors such as creeping food prices and changing lifestyles.
When you live month to month, you often find yourself scrambling to make ends meet, which is absolutely stressful and frustrating. Living like this does not only mean that you are unable to spend on some of the things you want, it also probably means that you have only enough to cover your basic necessities. In severe cases, living paycheck to paycheck could lead to increased debts and even dire financial situation.
But if you are done with this financial lifestyle and want to head towards a healthier financial status, here are 5 simple tips to get you out of your funk!
Contents
1. Change your attitude towards money
You need to change your mindset towards money if you want to improve your financial situation. One of the most important rules to abide by is to spend less than what you earn. This is a surefire way to ensure that you do not actually overshoot your budget.
Another way to change your attitude towards money for the better is by mingling with the right crowd. Friends with expensive tastes could put a dent in your wallet as you need to spend money unnecessarily to keep up with them. Not only that, always focus on the bigger picture to keep yourself aligned with your financial goals. Instead of splurging on the latest gizmo, it’s advisable that you save up money and use it for long-term investments like buying a house.
2. Learn to budget and manage your money
If you are an excessive spender, the term ‘budget’ could possibly be your very own kryptonite! In fact, a lot of people actually take this important step far too lightly. Some people, on the other hand, will write a budget but fail to follow it diligently.
The key to healthy budgeting is that you keep track of all your expenses. From monthly rental payment to yearly car insurance payment, you should list all these expenses down. This is to ensure that you are not surprised when infrequent payments pop up. A proper budget will help you realise how much you have been overspending. There’s tons of apps that can help you to budget effectively such as Mint, Spendee, Goodbudget, and Monny.
3. Prioritize your payments
The most important thing you must do after receiving your salary is to pay your bills such as house rentals, car loan repayments, etc. Next, you should focus on paying yourself, and this does not mean rewarding yourself by buying yet another pair of shoes! Paying yourself simply means setting aside a portion of your salary to go into your savings.
This money should be off-limits unless it is needed for emergencies or long-term investments such as to pay for a down payment on a house. Another important fact to ponder is that many financial experts advise working adults to save at least 20% of their monthly income for rainy days. However, you are always encouraged to save more money once you are able to do so.
4. Scale back on your expenses
When you have a budget, it shows if you have overspending habits and hopefully makes you feel guilty for doing so. So Tip 2 ties in with this tip, which is to cut down on unnecessary expenses. Do you really need to spend RM200 monthly on a gym membership?
While your efforts to stay in shape is commendable, there are other affordable ways to staying healthy. The same goes for other unnecessary expenses like eating out and indulging in retail therapy. Once you begin to trim superfluous expenses, you can work towards paying off all debts and start saving more money.
5. Start investing and diversifying your income
It is quite common for working adults to moonlight, albeit anonymously as this practice may be frowned upon by some employers. Moonlighting or having a second job can definitely help you to reduce the likelihood of living between pay cheques.
Even Meghan Markle used to work as a freelance calligraphy artist in between her acting jobs for extra cash! So, put your hobbies, talents, and skills to good use. There are many websites that allow you to freelance such as Upwork, Favser, and Matdespatch. Not only that, but many Malaysians are also actively working as Grab drivers, which does pay quite well.
Related: 8 Side Jobs for Malaysians to Earn Extra Money During CMCO
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3 Ways The Standard Chartered JustOne Platinum Mastercard Helps You Save Money
- By CompareHero.my
There’s a common misconception that paying in cash, as opposed to via a credit card, is always apparently the savvier, wiser, safer and better way. But is it really?
Though not paying your credit card debt on time will definitely cause you to be saddled with debt, the real issue with credit cards are not the cards itself, but your poor financial management!
Interestingly, credit cards can help you save even more money when used correctly—thanks to the abundance of promotions and rewards that you can get for spending with your card. And our belief is, if you are going to be spending, might as well get rewarded for it!
Are you a wee bit of a spender and are looking for ways to make the most out of it? In this article, we’ll show you why a Standard Chartered JustOne Platinum Mastercard can be incredibly good for your money thanks to its great rewards.
Contents
Many banks offer cashback cards, but not all those cards cover a wide range of spending categories. The Standard Chartered JustOne Platinum Mastercard is quite diverse.
1. It offers a good mix of cashback categories
The greatest part about spending with a cashback credit card is getting paid to do so.
With the Standard Chartered JustOne Platinum Mastercard, you can get up to 15% cashback monthly—one of the better rates in the market—with a monthly cap of RM60, when you spend on a diverse set of expenses including online purchases, auto bill payments (only for insurance, telco, and utilities) and petrol. It’s also one of very few cards to offer cashback for bills.
One category that isn’t covered by this card, however, is groceries, but that’s not too bad considering you can always get your groceries on online platforms like Lazada and Shopee. For other categories of spend, the cashback rate is fixed at 0.2% regardless of spend amount.
| Spend per month (RM) | Rebate on petrol, online spend, and auto bill | Other retail purchases | Capping per month (RM) |
| Less than 1,000 | 0.2% | 0.2% | 2 |
| 1000 to 1499.99 | 5% | 0.2% | 12 |
| 1500 to 2499.99 | 10% | 0.2% | 28 |
| 2500 & above | 15% | 0.2% | 60 |
Like most other cards, the Standard Chartered JustOne Platinum Mastercard uses a tiered cashback rate system, meaning you’ll need to spend more to get more out of your experience. In other words, to get a higher cashback percentage, you’ll need to spend more or in this case, at least RM2500 a month to enjoy the capped rate of RM60.
If you spend, on average, RM3,000 monthly for expenses such as petrol, auto bills, online purchases, then we feel you might as well use this card to enjoy the cashback rewards.
Standard Chartered has a great range of offers for dining, so make sure you are up to date with their latest offers!
2. Going out for a night of fun? A Standard Chartered card could come in handy!
Though this card covers a diverse range of categories in a person’s general expenditure, we noticed that there are some areas that it lacks such as grocery, dining and leisure to truly make it an all-rounder card.
But that’s okay—because some of Standard Chartered’s other ongoing offers can help supplement this need.
Got an upcoming dinner date? Through their #SCFoodieDeals, you can enjoy up to 20% cashback when you spend a minimum of RM100 in a single receipt and up to 33% off your bill.
If you are not into dinner dates but more of a movie buff then don’t worry, there’s something for you too. This card offers a swanky deal of RM10 per ticket for all movie tickets purchased on GSC’s website or via their app. Not a bad deal to consider since cinemas have reopened following months of closure due to the Movement Control Order (MCO).
If you are heading out for a night of fun with friends and you are footing the bill, make sure you take advantage of Standard Chartered’s e-wallet offers to make the most bang for your buck.
One deal lets you get up to RM45 cashback with a minimum spend of RM100 on your first top-up on Boost or Touch ‘n Go. Check out their daily promotions for more info.
If you don’t feel like going out and would rather stay home and Netflix and chill, then couple that with your favourite comfort food to complete your night. Order your favourite meals online via food delivery platforms GrabFood and foodpanda and link them up to your Standard Chartered credit card to get RM8 off.
If you are going to be spending, might as well get rewarded for it!
3. Need to buy essentials or overhaul your wardrobe? Shop online for more rewards!
Now, don’t get us wrong, we are not encouraging you to be a shopaholic—instead, as we always emphasise, if you are going to spend on essentials or on wants, might as well get rewarded for it anyway.
With the Standard Chartered JustOne Platinum Mastercard, you can get up to 15% off on online spends. Skip the long queue at the mall and get rewarded for buying off platforms like Lazada and Shopee.
What’s even better, the card also comes with an e-commerce purchase protection plan of up to USD200 when you shop online. It feels great to be able to shop with some peace of mind and get rewarded at the same time.
When you have the time, it also doesn’t hurt to check out their daily e-commerce deals as part of their #SCWOWDeals campaign. Shop like a winner, Monday to Friday, where there’s a different deal for you every day.
Plus: Relatively low minimum annual income required
With a minimum monthly income of RM3,000 and annual income of RM36,000, the Standard Chartered JustOne Platinum Mastercard may seem like a reasonably good entry-level card for fresh grads who are looking to apply for their first credit card—at least at face value.
But, we feel this card is more suitable for those who have been working for at least two to three years because to gain from this card, one will need to spend a minimum of RM2,500 monthly, which may not be economically realistic for young fresh grads who, according to latest statistics, earned RM1,001 to RM1,500 on average in 2020. Even with a higher salary of RM3,000, a fresh grad will not be able to realistically spend RM2,500 comfortably.
The great news is that this card comes with a first year annual fee waiver if you are a first time applicant.
To fully maximise the JustOne Platinum Mastercard, you’ll need to spend… a lot
To unlock the full 15% cashback potential of this card, you’ll need to maximise your monthly expenditure and ensure it’s above the RM2,500 threshold. We know, that’s a lot of spending.
That is why we feel this card is not suitable for fresh graduates who are just finding their way into adulthood and do not have the luxury of spending that much; let alone earn that much.
If you are a single adult, you may also not get to fully reap the benefits because of the lower spending threshold that you might have by virtue of status.
To earn the RM60 cashback, breadwinners and those with children or a family (including furry kids!) may find it easier to hit the RM2,5000 threshold when paying for essentials. To put it into perspective, the RM60 monthly cashback equates to RM720 in a year!
All in all, it’s a great card for those responsible for footing the bill every month and big spenders because these folks can benefit from having a card with one of the highest cashback rates in the market. The card also covers a wide range of categories.
Do you like what you hear? Apply for Standard Chartered JustOne Platinum Mastercard today to earn great rewards. You can either enjoy a short getaway for 2D1N at DoubleTree by Hilton or claim a RM350 Lazada eVoucher. Guaranteed for every approved applicant.
- Enjoy up to 15% Cashback on online purchases, autobill payments and petrol
- Enjoy 0.2% cashback for all other purchases
- Enjoy from RM10 per ticket for any movies at Golden Screen Cinemas
- E-commerce purchase protection up to USD200 when you shop online
- Annual fee waiver for the first year
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4 Practical Ways To Afford Groceries In Malaysia
- By CompareHero.my
- April 6, 2021
Truth hurts and sadly the title of this article is indeed true. let’s talk about a very common topic. The rise in cost of living in Malaysia. Somehow this topic doesn’t seem to fade away for obvious reasons. I mean we are constantly slapped with price tags or fees that burns a crater in our wallets.
For months or even years now, Malaysians are burdened with this financial epidemic. So who is to be blamed? and what is the solution? This is really a rhetorical question, right? But what’s not rhetoric are some facts and data pertaining to this phenomenon.
A recent study by Agensi Kaunseling Dan Pengurusan Kredit (AKPK) found that 18 per cent of working Malaysian adults are unable to make any savings in the last six months. In the same report, it was highlighted that 28 per cent of working adults needed to borrow money to buy essential goods. That is equivalent to 3 out of 10 working Malaysians. These are all attributed to the high costs of living especially in main cities.
Another worrying factor is that most Malaysians still fall prey to scams and other financial frauds. A sign that clearly indicates that we are not financially literate yet. In October last year, a whopping 8,313 cases of victims of financial scams were reported.
“Given the alarming red flags, it is therefore crucial that we as a nation step up our financial literacy and increase our efforts to learn smart ways to manage our finances. We need to particularly invest in a regulated environment, instead of falling victim to get-rich-quick schemes or fraudulent companies and investment scams.” Lim Guan Eng, Malaysia’s Finance Minister.
The Finance Minister has a point. It is so important for us to educate ourselves financially as this is to ensure that every cent we make is put to good use. As much as the statistics and data mentioned above is scary, money problems may also have an impact socially. You know, desperate times call for desperate measures.
Having money problems is one thing, but developing new problems because you have no money is another. I’m talking about theft, engaging in gangsterism, selling drugs, etc. Oh and even suicide. There was a report that a man took his own life in KL due to his financial problems. Isn’t that just sad?
Here are some helpful tips that you may consider adopting to save that extra buck!
Contents
1. Cut down on expenses
Cutting your day-to-day expenditure can also have a massive impact. Identify areas with the highest monthly expenses and try to reduce it. For example, if most of your money goes to petrol, toll and car maintenance, perhaps it makes sense to commute using public transportation more often. Plus it saves you time as well.
2. Generate your passive income
One of the easiest ways to do this is by increasing your passive income. Unlike active income (which you usually earn through having a job or running a (profitable) business), passive income generation typically requires less time and effort.
Passive income can include investments, especially with low-to-mid risk instruments that let you leverage on capital with minimal active input. It might take some work, money, and maintenance, but if you plant passive income seeds to suit your climate (aka your personal preferences and skills), you can bring in quite a harvest.
The more you save, the more returns you will get. Lower-risk financial instruments like fixed deposit will give you lower returns, but they are generally considered safe and are an effective tool to help preserve the value of your contingency funds.
Related: Use These 7 Cash Tricks to Grow Your Savings
3. Stick to a budget
Saving money on everyday costs is great, but unless you have a solid budget, you will still face many months where you are overspending. Take the time to carefully review your bills, budget for unexpected bills and emergencies, and of course, budget for leisure too.
The idea of budgeting is just a simple way of you telling your money where you want it to go. Looking thoroughly into your previous expenses from your bank or credit statements should give you an idea on where your money flows to. Also its a good way to wake up! You’ll want to create categories for each expense in order to set a limit for that category, and also list your income. Be sure your budget never exceeds your income — if it does, there might be some items you’ll need to cut.
Related: Costs Everyone Forgets to Budget For
4. Spend it. Yes Spend but..
You can make the most out of your money by adopting strategies that allow you to save while you spend. For example, buying essential items such as rice and toiletries in bulk can save you a small fortune. Let me share a list that would help you spend your money wisely:
- Plan your purchases in advance
- Avoid impulse purchases.
- Wait for sales and discounts
- Review your regular spending for things to eliminate.
- Identify things to reduce.
- Start writing down each purchase you make.
- List down places, things, or people that cause you to make poor spending choices.
Well to be honest, there is no REAL conclusion when it comes to saving money. There are plenty of ways you could do so. But what is important is the attitude to change. So before you choose to purchase something, as yourself the magic question. Is it necessary?
Here is a short clip we found on YouTube that may help you cope with the rise in cost of living. Don’t forget to take part in our poll at the bottom.
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Tax Relief vs Tax Rebate: What’s The Difference?
- By CompareHero.my
The tax season is here again, and you’ll have to file your personal income tax returns by April 30 this year. There are so many income tax terms to understand that sometimes, we get confused. Today, we’ll be looking at the difference between tax relief and tax rebate.
Contents
What is tax relief and tax rebate?
Tax reliefs and tax exemptions are deducted from your total annual income. After deduction, this amount is known as chargeable income.
Meanwhile, tax rebate is calculated AFTER you have determined the amount of tax charged on your chargeable income. It will be deducted from your actual taxed amount.
- Let’s say your chargeable income after tax reliefs and tax exemptions is: RM33,000.
- The amount of tax charged on your changeable income is: RM755.
- Since your chargeable income is below RM35,000, you can claim a RM400 tax rebate.
- So your total tax after tax rebate is: RM755 – RM400 = RM355
Related: Malaysia Income Tax e-Filing Guide For Newbies
Types of tax relief you can claim
Here are some tax relief categories that you should fully utilise for the year of assessment 2020:
1. Lifestyle purchases: Max. RM2,500
The lifestyle tax relief amounts up to RM2,500 a year. That’s why it’s important to save the receipts for your purchases of:
- Books, journals, magazines, printed newspapers
- Sports equipment and gym membership fees
- Computer, smartphones, or tablets
Your monthly bill payments for internet subscription is also eligible for lifestyle tax relief, so be sure to keep those bills as well.
2. Lifestyle purchases for tech gadgets: Max. RM2,500
You can claim an additional RM2,500 if you’ve bought a PC, smartphone, or tablet between 1 June and 31 December 2020.
You can claim a lifestyle tax relief of up to RM2,500 for buying smartphones, laptops, books and more.
3. Complete medical examinations: Max. RM500
If you, your spouse or child have completed a medical examination in the past assessment year, you can claim a maximum of RM500 as tax relief.
4. Further education fees: Max. RM7,000
If you’re paying for your own further education course in a recognised higher learning institution in Malaysia, you’ll also be entitled to claim a tax relief of up to RM7,000.
For Masters or Doctorate students, any course of study is eligible. As for undergraduate degrees or lower, you can only claim a tax relief if you’re studying law, accounting, Islamic financing, technical, vocational, industrial, scientific, or technology.
5. Medical expenses for parents: Max. RM5,000
If your parents are undergoing treatment for specific medical conditions and this is proven by a certified medical practitioner, you can claim up to RM5,000.
This includes expenses for equipment, care, or treatment for their condition. Your parents must also be residing in Malaysia where the treatment is provided locally.
For the complete list of tax reliefs that you can claim, please refer to Lembaga Hasil Dalam Negeri (LHDN).
Related: 7 Tax Exemptions in Malaysia You Should Know About
You’re entitled to a RM400 tax rebate if you and your spouse choose to be jointly assessed, and your joint chargeable income does not exceed RM35,000.
Types of tax rebate you can claim
You should make full use of these tax rebates.
1. For yourself: RM400
If your chargeable income (after tax reliefs and deductions) does not exceed RM35,000, you can claim a tax rebate of RM400.
2. For your husband/wife: RM400
You’re entitled to a RM400 tax rebate if you and your spouse choose to be jointly assessed, and your joint chargeable income does not exceed RM35,000.
3. Departure levy paid for performing umrah and pilgrimage to holy places
Anyone who travels from Malaysia by airplane to perform umrah or other kinds of religious pilgrimage can claim this rebate. You will receive a rebate for the amount of departure levy you have paid. You can also claim this rebate twice during your lifetime.
4. Zakat
Tax rebates are also given to Muslims that pay Zakat. The rebate amount will be based on how much they paid during the tax year.
Remember to file your income tax by April 30, 2021 at the ezHASiL platform.
Need more info about income tax filing? Check out these articles:
