To reduce your individual income tax, make sure you fill the following columns in the Income Tax Return Form (ITRF) to qualify for deductions before submitting it to LHDN.
D1: INDIVIDUAL AND DEPENDENT RELATIVES
Relief of RM9,000 for self and dependent relatives is granted automatically -Paragraph 46 (1) (a).
D2: MEDICAL EXPENSES, SPECIAL NEEDS AND CARERS FOR PARENTS
Expenses for parents’ medical care, special needs and career are allowed as a deduction is limited to RM5, 000 - paragraph 46 (1) (c).
Eligible medical expenses include:
- Medical care and treatment provided by a nursing home and
- Dental treatment limited to tooth extraction, tooth filling, cleaning, but not including cosmetics.
The expenses must meet the following conditions:
- Claims must be supported by a medical practitioner registered with the Malaysian Medical Council confirming that the health conditions of parents requiring medical treatment or special needs or carer.
- Parents must be resident in Malaysia.
- Medical treatment and care services must be sourced in Malaysia. In the case of a carer, must be proved by carer’s written acknowledgment, receipt or copy of a work permit.
- Carer shall excludes the individual, or husband / wife or child of the individual.
D5: EDUCATION FEES (SELF)
An amount limited to RM5, 000 is deductible in the course of learning in an institution or professional body in Malaysia recognized by the Malaysian Government or approved by the Minister of Finance for the purpose of enhancing the skills or qualifications:
- up to tertiary level (other than the Master and Doctor of Philosophy) - in the field of law, accounting, finance, technical, vocational, industrial, scientific, or technology, or
- Masters and PhD levels - any field or course of study in Paragraph 46 (1) (f).
D8: PURCHASE OF BOOKS / MAGAZINES / JOURNALS
Expense of any books, magazines, journals or other publications (in form of hardcopy or electronic but excluding newspapers or banned reading materials) for an individual, husband / wife or child as allowed a limited deduction up to RM1,000 -paragraph 46 (a) (i).
D9: PURCHASE OF PERSONAL COMPUTER FOR INDIVIDUALS
Tax deduction of RM3,000 is given to individuals for expenses incurred on the purchase of personal computers. No deduction is allowed if the computer is used for business purposes. This deduction is given once every 3 years -paragraph 46 (1) (j).
D10: NET SAVINGS IN NATIONAL EDUCATION SAVINGS SCHEME (SSPN)
Amount deposited in SSPN by an individual to finance children's education is deductible up to a maximum of RM3,000 per annum. Deduction is limited to the net amount deposited in that year alone.
In the year 2011, Balance brought forward: RM4,500.
Savings: RM2, 000. Withdrawal: RM1, 500.
Deductions that can be claimed is RM500 (RM2, 000 - RM1, 500).
Balance brought forward of RM4, 500 is not taken into account -paragraph 46 (1) (k).
D11: PURCHASE OF SPORTS EQUIPMENT FOR SPORTS ACTIVITIES
Tax deduction is limited to RM300 for purchase of sports equipment made by individuals for sporting activities according to the type of sports that are listed in the Sports Development Act 1997. Sports equipment includes equipment with short lifespan, such as golf balls and shuttlecocks but excluding sports attire e.g. swimsuits and sports shoes -paragraph 46 (a) (l).
D12: SUBSCRIPTION FEES BROADBAND INTERNET SERVICES
Tax deduction is limited to RM500 a year be given to individuals for payment of broadband subscription is registered in the name of the individual. Deduction allowed for Year of Assessment 2010, 2011 and 2012 -paragraph 46 (1) (m).
Eligible service providers: Celcom, Maxis, Digi, uMobile and P1.
D19: EDUCATION AND MEDICAL INSURANCE
Tax deduction of not more than RM3000 of insurance premium expenses.
E6: PAYMENT OF ZAKAT OR FITRAH
Tax rebate of not more than RM1500 (depending on the amount of tax payable).
(Tax rebate worth a lot more than tax relief because it cuts the amount of actual tax payable, unlike tax relieves above which only cuts the taxable income. If you are a muslim, make sure you pay zakat and fitrah and do apply for this rebate).
Read more about LHDN/IRB Personal Income tax relief here.