Ultimate Income Tax Relief Guide for Malaysians (2025)

Estimated reading time: 14 minutes

Tax season 2024 is here! It’s that time of year to settle your dues with the tax man. Whether you’re filing for the first time or just want to avoid overpaying, it’s important to know what’s taxable and what reliefs you can claim.

In this blog, I’ll walk you through everything you need to know about taxes – from the latest tax brackets, Borang BE, and PCB deductions to the 21 tax relief categories available. These can help you maximize your savings for the 2024 assessment year by making full use of the reliefs!

What is Taxable?

You might come with this question when you’re first paying tax – what is actually taxable? Basically, it’s the incomes you earn from others, most likely your employer. However, it’s not all incomes you gain are taxable. Let me break it down!

Employment Income

First, based on the LHDN Malaysian which is our tax authority, it has mentioned that the gains or profit from employment are taxable. This includes your salary, bonus, OT payment, commission or ESOS (Employee Share Option Scheme).

Once you receive your Borang EA (usually before March) , you’ll see a list of all the income you earned from your employer throughout the year. This is what you’ll use to file your taxes with Borang BE, as it gives a clear summary of your income and any statutory contributions you’ve made.

However, there are still some things that are not taxable, like your parking allowance, meal allowance, and medical benefits. These are considered reimbursements from your employer for expenses you’ve paid during your working time.

Other Income

Besides that, here are other types of taxable income you might have, such as investment dividends, rental income, or business revenue. If you’re a business owner, you’ll need to file Borang B, which covers both employment and business income.

As for your investment income, especially if you invest in the US market from Malaysia, I’ve made a video covering this, so feel free to check it out later!

Who is Taxable?

So, who needs to pay tax? According to LHDN, you’re only taxed if your gross annual income is more than RM37,333, which is about RM3,111 per month. Another way is you can check your monthly pay slip to see if you’re already paying tax through PCB (Potongan Cukai Bulanan) deductions. If you see PCB listed, that means you’re already considered a taxpayer.

But this doesn’t mean you’ll have to pay the full tax amount just because you earn more than RM37,333 and have PCB deductions. In fact, you might even get a refund for the extra tax you’ve paid, depending on the reliefs you qualify for. Here’s the formula:

Taxable Income = Total Gross Annual Income – Tax Exemptions – Tax Reliefs

Tax exemptions refer to income that you don’t have to pay tax on, like the parking allowance, medical, and dental benefits I mentioned earlier. On the other hand, tax reliefs are amounts you can deduct from your taxable income and that’s what I’ll be covering in this blog.

Tax Rate for the Year of Assessment 2024

Here I’ll show you the tax rate for Year of Assessment (YA) 2024 by LHDN. Basically, this is how you are taxed based on your taxable income bracket.

For example, after deducting tax exemptions and reliefs, let’s say your taxable income is RM40,000. Based on the tax table, you fall under Category D. The first RM 35,000 is taxed at a fixed amount of RM600, while the remaining RM 5,000 is taxed at 6%, which comes to RM300. So in total, you’ll need to pay RM900 in taxes for the assessment year.

There are also plenty of online tax calculators available. You can simply search for one on Google, and it will help you estimate the amount of tax you need to pay.

Types of Tax Relief You Can Claim for YA 2024

Now, I’m going to show you the 21 categories of tax relief that you can claim. For you convenience, I’ve break it down into 4 main categories:

• General (for yourself, spouse, children, or parents), 
• Parents (expenses for their care), 
• Child (if you have kids), 
• and Disabled (for yourself or a dependent with disabilities).

Category A: Tax Reliefs for General Expenses

Let’s start with the most common expenses you can claim.

Individual and Dependent Relatives

The first one is the Individual and Dependent Relatives relief, where you can claim RM9,000. Just so you know, “individual” refers to yourself, and “dependent relatives” are those who rely on you for financial support, like your children or parents. This is a basic relief that usually doesn’t require any action from you, as it’s often already filled in and greyed out in the LHDN Borang BE form.

Husband/Wife Alimony

Next is if you have your husband or wife at home with no source of income, then you can claim a RM4,000 for it. However, you’re not be eligible for claim if he or she has a gross income of more than RM4,000 from abroad.

Here’s a special case, if you have a wife with no income and you’re also paying alimony to your former wife, the total amount you can claim for relief is still capped at RM4,000. Just a reminder, any alimony paid to your former wife must be supported by a formal agreement. If it’s only a verbal arrangement, it won’t be eligible for tax relief.

Lifestyle

Now let’s talk about lifestyle expenses, you can claim up to RM2,500 here, whether it’s for yourself, your spouse, or your child. This includes the purchase or subscription of printed or digital books, journals, magazines, newspapers, and similar publications.

In addition, if you bought a computer, smartphone, or tablet for personal use last year (not for business purposes), those can also be claimed under this relief.

Not only that, your monthly subscription bill that is under your name can also be claimed.

This category also covers the relief for fees you pay for extra courses related to skill improvement and personal development. Therefore, be sure not to leave out any of these, as I’m sure you can easily find things to claim here!

Sports Equipment/ Facilities

Next, if you’re someone who enjoys going to the gym and playing sports in your free time, you can claim up to RM1,000 for any sports equipment you purchase, as long as the sport is listed under the Sports Development Act 1997, which includes around 50 types of sports.

This also includes rental and entrance fees for sports facilities (e.g., badminton courts or gym centers), sports competition registration fees (eg. marathons), as well as membership fees and sports training. The good news is this applies not only to you but also to your spouse and child.

Just a quick note, sportswear and gym attire are not claimable under this relief.

Medical Expenses

Moving on to the medical expenses, you can claim up to RM10,000 in this category for yourself, your spouse, or your child.

First, if you or your dependents are receiving treatment for serious diseases such as what listed here by LHDN, you can claim those medical expenses:

• Acquired Immune Deficiency Syndrome (AIDS)
• Parkinson’s disease
• Cancer
• Renal failure
• Leukemia
• Heart attack
• Pulmonary hypertension
• Chronic liver disease
• Fulminant viral hepatitis
• Head trauma with neurological deficit
• Brain tumor or vascular malformation
• Major burns
• Major organ transplant
• Major amputation of limbs

This also includes fertility treatments (eg. Intrauterine Insemination (IUI), In Vitro Fertilization (IVF)) for yourself or your spouse. Be sure to keep your medical bills and a certification from your doctor in case LHDN asks for proof. They have also enabled you to claim a maximum of RM1,000 for just vaccination. For this year, there’s an added relief where you can claim up to RM1,000 for dental examinations and treatment.

Second, you can claim up to RM1,000 if you, your spouse or child undergo a medical check-up, mental health examination or consultation, or take a COVID-19 detection test (at a hospital, clinic, or using a self-test kit).

Lastly, if you have a child aged 18 or below who is intellectually disabled and requires assessment and treatment listed here:

• Autism Spectrum Disorder
• Attention Deficit Hyperactivity Disorder (ADHD)
• Global Developmental Delay (GDD)
• Intellectual Disability
• Down Syndrome
• Specific Learning Disabilities

Then you can claim up to RM4,000 for these medical expenses. Just make sure the assessment and treatment are carried out in Malaysia to qualify for the claim.

Life Insurance and EPF

Here’s another relief that some of you might not be aware of. If you contribute to both life insurance and EPF, you can claim up to RM7,000, which includes RM4,000 for EPF and RM3,000 for life insurance (or Takaful).

Your EPF contributions can be either mandatory deductions from your salary or voluntary payments. So even if you’re working part-time or freelancing, as long as you contribute to your EPF account, you’re eligible to claim this relief.

For life insurance, just check your insurance statement for the total annual premium paid and that’s the amount you can claim. But if you don’t have a life insurance policy, you can still make voluntary contributions to EPF to take advantage of the RM3,000 relief.

SOCSO

Also, you can claim up to RM350 for your contribution to SOCSO. This amount also includes what you’ve contributed to the EIS (Employment Insurance System).

Deferred Annuity and PRS

Next, if you’ve contributed to a deferred annuity or a Private Retirement Scheme (PRS) approved by the Securities Commission, you’re eligible to claim up to RM3,000.

Just a quick explanation here, a deferred annuity is a type of life insurance plan offered by insurance companies. You can either make regular contributions or invest a lump sum, which the insurer will then place into various investments. When you retire (usually at age 55 or later), you’ll receive a guaranteed regular payout as part of your retirement income.

If you don’t have a deferred annuity, contributions to a PRS also qualify for this relief. In case you’re not familiar with PRS, it’s a long-term investment scheme offered by asset management companies, functioning similarly to a unit trust. Your contributions are split into two sub-accounts. There are currently 9 PRS providers in Malaysia.

On a personal note, I’m not too keen on PRS because its historical returns have been relatively low, and there’s a chance the returns might not keep up with inflation. In my opinion, a better alternative is placing your money in a fixed deposit since it often gives higher returns, and the funds remain accessible without waiting until retirement. Overall, it’s a smarter and more flexible choice.

Education and Medical Insurance

Let’s move on to education and medical insurance, where you can claim up to RM3,000 either for yourself, your spouse, or your child.

This applies whether you have a stand alone policy or a rider (an add-on) attached to a life insurance policy. If it’s a rider case, then only the premium for that specific rider is claimable. So to find the exact amount, just refer to your annual insurance statement.

Education Fees (Self)

Next, if you’re pursuing higher education while working, you can claim up to RM7,000 for your studies, whether it’s for an undergraduate or postgraduate program.

You just have to make sure your course is fall under approved fields if you’re studying for a diploma, bachelor’s degree, or professional certification. However, if you’re pursuing a Master’s or Doctorate degree, you can claim the relief regardless of the field, as long as the institution is recognized by the Malaysian Government or approved by the Minister of Finance. You can check the list of approved institutions on the official website of the Ministry of Higher Education (MoHE).

Not only that, if you take any courses to upskill or enhance yourself, you can claim up to RM2,000, as long as they are officially recognized.

EV Charging Facilities

Next, if you’re an EV driver, you can claim up to RM2,500 for your electric vehicle charging facility expenses. For example, costs related to installation, rental, purchase or hire purchase, and subscription fees for using the charging facility are all claimable.

Category B: Tax Reliefs for Parents’ Related Expenses

After the general expenses, let’s move on to the relief you can claim for supporting your parents.

Expenses for Parents

You can claim up to RM8,000 for expenses related to their medical treatment, caregiving, and dental care.

For dental treatment, only basic procedures such as tooth extraction, fillings, sealants, and cleaning are covered. Cosmetic procedures like teeth restoration, crowning, root canals, and dentures are not eligible for claims.

This year, a new relief of up to RM1,000 has been introduced for your parents’ medical check-ups. If you’ve arranged this for them, you can check the full details on the official LHDN website.

Category C: Tax Reliefs for Child Related Expenses

Moving on to the next category, the child related expenses.

Unmarried Child Below 18 Years Old

If you have a child under 18 years old who is unmarried, you can claim RM2,000 for each of them. Just a quick reminder, only one parent can claim this relief, so be sure to avoid double claiming.

Child Over 18 Years Old and in College/ Uni

If your child is above 18 years old and unmarried, you can claim up to RM8,000 as long as they are studying at a university, college, or a similar higher education institution in Malaysia (excluding matriculation and pre-university courses). This relief also applies if they are pursuing a Master’s degree or Doctorate overseas.

Breastfeeding Equipment

Next, if you’re a mother breastfeeding a child aged 2 years or below, you can claim up to RM1,000 for breastfeeding equipment. This relief is claimable once every two years.

If you’re filing a joint assessment with your spouse, this relief can only be claimed under the wife’s name. This means it cannot be claimed if the assessment is filed under the husband’s name.

Childcare Fees

If you’re a busy parent who sends your child aged 6 years or below to a childcare centre or kindergarten, you can claim a relief of up to RM3,000, regardless of how many children you send.

Do note that only one parent is allowed to claim this relief.

SSPN Net Deposit

Next, if you’ve opened an SSPN account for your child’s higher education, you can claim tax relief for the net deposit made, up to RM8,000. This means the total amount you deposited into the account, minus any withdrawals, is the amount you’re eligible to claim.

Category D: Tax Reliefs for Disabled Person/Relative Expenses

Now, the final category of relief is for supporting disabled individuals. This can be claimed either for yourself or for your family members.

Equipment for Disabled (Self and Family)

If you purchase any necessary basic supporting equipment whether for yourself or your family, you can claim up to RM6,000. You just have to make sure the disabled individual is registered with the (JKM) Jabatan Kebajikan Masyarakat Malaysia. The equipment can be claimed including hemodialysis machine, wheel chair, artificial leg and hearing aids, but excludes spectacles and optical lenses.

Disabled Individual

If you are a disabled person registered with JKM, you’re entitled to an additional tax relief of RM6,000.

Disabled Husband/Wife

If your husband or wife is a disabled individual, you can claim a total of RM5,000 in relief.

Disabled Child

If your child is disabled and unmarried, then you can claim RM6,000 for deduction.

On top of that, you can claim an extra RM8,000 if they are pursuing full-time education at diploma level or higher at a university or college in Malaysia, or at degree level and above if studying abroad.

Conclusion

In sum, these are all the latest tax reliefs you can claim for the Year of Assessment 2024. Before filing your taxes, be sure to keep all relevant documents, including receipts for purchases, medical treatments, and any necessary certifications like disabled status – for at least 7 years. These records are important in case you’re selected for a tax audit, as they serve as proof of your claims and can help you avoid unnecessary penalties or complications.

It’s always better to stay organized and prepared, because you never know when the tax man might come calling!

Checkout the YouTube video for a visual guide to this blog!

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