Explanatory Notes for Individual Tax Relief for YA2025 In Malaysia-Company Formation_Trademark Registration_Tax Service - Hong Kong CPA

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Explanatory Notes for Individual Tax Relief for YA2025 In Malaysia

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Explanatory Notes for Individual Tax Relief for YA2025 In Malaysia

Personal Reliefs (Item 1)

Every resident individual is automatically entitled to a personal relief of RM9,000 in respect of himself and his dependent relatives.

For husband and wife who are assessed separately, each individual is entitled to claim the RM9,000 personal relief for themselves and their dependent family, if applicable.

Reliefs on Expenses for Parents or Grandparents (Item 2)

A resident individual may claim a maximum deduction of RM8,000 for medical treatment, dental treatment, special needs or carer expenses incurred for their parents in the basis year.

To qualify for this relief:

The parent must be natural or foster parents or grandparents who are tax residents in Malaysia.
The parents or grandparents must suffer from diseases or have physical or mental disabilities, as certified by a registered medical practitioner.
All expenses must be supported by official receipts and certification issued by the registered medical practitioner, stating the medical conditions of the parents.
The medical or dental services must be provided in Malaysia by practitioners registered with the Malaysian Medical Council (MMC) or the Malaysian Dental Council (MDC).
The carer shall not include that individual, his wife or her husband or the child of the individual.

A complete medical examination (including any type of vaccination) for parents or grandparents also qualifies for deduction up to RM1,000, which forms part of the overall RM8,000 limit.

Disability Reliefs (Item 3 and 4)

A resident individual who is certified as a disabled person by the Department of Social Welfare (DSW) is entitled to an additional personal relief of RM7,000.

In addition, a further deduction of RM6,000 is allowed for the purchase of basic supporting equipment for the use of a disabled individual, spouse, child or parent.

Examples of basic supporting equipment include:

Hemodialysis machine
Wheelchair
Artificial limbs or legs

Hearing aids

(Note: Spectacles and optical lens are excluded.)

Educational and Self-Development Reliefs (Item 5)

A resident individual may claim a deduction up to RM7,000 for education fees incurred on any course of study undertaken for the purpose of acquiring new knowledge or skills. The allowable deductions are categorised as follows:

a)	Courses other than a degree at Master’s or Doctorate level Courses in law, accounting, Islamic finance, technical, vocational, industrial, scientific or technological fields up to tertiary level. The course must be undertaken in an institution or professional body in Malaysia that is recognised by the Government or approved by the Ministry of Finance.
b)	Degree at Master’s or Doctorate level Study courses undertaken for the purpose of acquiring any skill or qualification for a Master’s or Doctorate degree. The list of recognised local institutions or professional bodies can be referred from https://www2.mqa.gov.my/ or https://www.mohe.gov.my/
c)	Course of study undertaken for up-skilling or self-enhancement Any course of study undertaken in Malaysia for the purpose of up-skilling or self-enhancement, recognised by the Director General of Skills Development under the Skills Development Act 2006. The available tax relief is restricted to RM2,000, which forms part of the total RM7,000 limit. Further information on recognised skills training can be referred from https://www.dsd.gov.my/ms/

Reliefs on Medical expenses (Item 6, 7 and 8)

A resident individual may claim a deduction up to RM10,000 for medical expenses incurred on himself, spouse or child for the following:

a)	Treatment of Serious Diseases This includes treatment for: Acquired Immunity Deficiency Syndrome (AIDS) Parkinson’s disease Cancer Renal failure Leukemia Other similar diseases such as: - Heart attack - Pulmonary hypertension - Chronic liver disease - Fulminant viral hepatitis - Head trauma with neurological deficit - Tumor in brain or vascular malformation - Major burns - Major organ transplant - Major amputation of limbs.
b)	Fertility Treatment Eligible for married individuals only. Covers fertility treatments such as Intrauterine Insemination (IUI), In Vitro Fertilisation (IVF) and other medically prescribed fertility procedures, including consultation fees and prescribed medications.
c)	Vaccinations Includes vaccinations for Pneumococcal, Human Papillomavirus (HPV), Influenza, Rotavirus, Varicella, Meningococcal, Combination of Tetanus-Diphtheria-Acellular-Pertussis (Tdap) and COVID-19. The claim is restricted to RM1,000, which forms part of the total RM10,000 limit for medical expenses.
f)	Dental Treatment Covers teeth replacement and dental repairs, including tooth extraction, filing cavities, cleaning tartar, dentures, root canal treatment, and other non-cosmetic dental procedures. Cosmetic or aesthetic treatment, such as teeth whitening, crowns, bridges and veneers, are not eligible. The claim is restricted to RM1,000, which forms part of the total RM10,000 limit for medical expenses.
e)	Complete Medical Examination Expenses and Payment of Fees for Disease Detection Test Refers to a comprehensive medical check-up that includes a physical examination of the body, X-ray examination, blood and urine tests and a consultation on the results of the examination. Partial tests or standalone screenings do not qualify as a complete medical examination. With effect YA2025, payments for disease detection tests are included. The claim for complete medical examination and disease detection test, purchase of self-testing medical device and mental health examination or consultation is restricted to a combined tax deduction of RM1,000, which forms part of the overall RM10,000 limit on medical expenses.
f)	Purchase of Self-Testing Medical Device Test This includes purchase of self-testing medical device which is registered under the Medical Device Act 2012, such as blood glucose monitoring system and blood pressure monitors. The device has to be purchased for own usage and not for the purpose of his business. The claim for complete medical examination and disease detection test, purchase of self-testing medical device and mental health examination or consultation is restricted to a combined tax deduction of RM1,000, which forms part of the overall RM10,000 limit on medical expenses.
g)	Mental Health Examination or Consultation Refers to consultations or examinations related to mental health conducted by a counsellor, clinical psychologist or psychiatrist. The claim for complete medical examination and disease detection test, purchase of self-testing medical device and mental health examination or consultation is restricted to a combined tax deduction of RM1,000, which forms part of the overall RM10,000 limit on medical expenses.
h)	Diagnosis of Learning Disability Refers to expenses incurred for a child below 18 years old for assessment for diagnosis of learning disabilities or early intervention programme or rehabilitation treatment related to the diagnosed disability. The learning disabilities covered include: - Autism Spectrum Disorder - Attention Deficit Hyperactivity Disorder (ADHD) - Global Developmental Delay (GDD) - Intellectual Disability - Down Syndrome - Specific Learning Disability. The claim is restricted to RM6,000, which forms part of the total RM10,000 limit on medical expenses.

All expenses claimed under this section must be incurred in Malaysia and supported by official receipts. Where applicable, claims must also be certified by a registered medical practitioner confirming that the treatment or service was necessary.

Lifestyle Reliefs (Item 9)

A resident individual may claim a deduction up to RM2,500 for lifestyle expenses incurred for use or benefit of self, spouse or child. The allowable expenses include the following:

a)	Purchase or subscription of books, journals, magazines, newspapers or other similar publications Reading materials or similar publications, whether in hardcopy or electronic format, qualify for tax deduction. Banned or morally offensive reading materials do not qualify for tax deduction.
b)	Purchase of personal computer, smartphone or tablet Eligible for tax deduction when purchased for personal or family use and not used for business purposes. Additional charges such as extended warranty are excluded from the deduction.
c)	Payment of monthly bills for internet subscription The internet subscription must be registered under taxpayer’s own name.
d)	Payment for any course for the purpose of up-skilling or self-enhancement Excludes courses mentioned in Item 5 (Educational and Self-Development Relief); The course does not need to be registered or recognized by any government authority. Qualifying examples include hobby or language courses that are unrelated to the taxpayer’s employment.

Additional Lifestyle Reliefs (Item 10)

A resident individual may claim a deduction up to RM1,000 for additional lifestyle expenses incurred for use or benefit of self, spouse, child or parents in the basis year. This deduction is separate from the lifestyle relief provided under Item 9.

The allowable expenses include the following:

a)	Purchase of sports equipment for sports activity Refers to expenditure for the purchase of sports equipment for any sports activity listed under the Sports Development Act 1997 (“SDA”). Motorized two-wheel bicycles are excluded from this relief.
b)	Payment of rental or entrance fee to any sports facility
c)	Payment of registration fee for any sports competition Applies to registration fees paid for participation in sports competition organized or approved by an organizer licensed by the Commissioner of Sports under the SDA.
d)	Payment of fees for gym membership or sports training Refers to gym membership fees or sports training fees provided by sports association or clubs registered with the Commissioner of Sports or companies incorporated under the Companies Act 2016, that carry our sports activities listed under the SDA.

Purchase of breastfeeding equipment (Item 11)

A deduction up to RM1,000 is allowed for the purchase of breastfeeding equipment for a child aged two years and below. This relief is claimable once every two years of assessment, regardless of the number of children.

This relief is exclusively for women taxpayers who are breastfeeding mothers and the equipment must be purchased for their own use to breastfeed their own child.

Breastfeeding equipment includes:

Breast pump kit and ice pack
Breast milk collection and storage equipment; and
Cooler set or cooler bag.

Childcare Centre and Kindergarten fees (Item 12)

A deduction up to RM3,000 is allowed for fees paid to a registered childcare centre or kindergarten for a child aged six years and below in the basis year until YA2027.

To qualify for tax relief, the childcare centre or kindergarten must be registered with the relevant authority (e.g. Department of Social Welfare or Ministry of Education Malaysia).

The deduction is restricted to RM3,000 in total, even if more than one child meets the qualifying conditions. All claims must be supported by official receipts issued by the registered childcare centre or kindergarten.
Net Deposit in Skim Simpanan Pendidikan Nasional (SSPN) (Item 13)

A deduction of up to RM8,000 is allowed for net deposits made for the YA 2025, 2026 and 2027 by a resident individual into an approved SSPN account for their children’s education.

Only the net amount deposited during the basis year qualifies for deduction, calculated as the formula below:

“Total deposit made during the year – Total withdrawal made during the year*”

* Excluding amount withdrawn for higher education which is received by the child.

However, these tax reliefs are only available to parents (depositors) who make deposits for their children (beneficiaries). The relief can be claimed until the child reaches 29 years old. Deposits made for one’s own SSPN account are not eligible for tax relief.

For a husband and wife assessed separately in the same year, the deduction may be claimed by either spouse, but not both. The maximum deduction of RM8,000 applies even if the individual has more than one child.

Spouse and Alimony Reliefs (Item 14 and 15)

A deduction up to RM4,000 is available to a resident individual in the following circumstances:

a)	Deduction for Husband A deduction of RM4,000 is allowed to the wife if the husband has no source of income or no total income, or the husband has elected for joint assessment in the wife’s name. Only one wife is eligible to claim this deduction, even if the husband has more than one wife.
b)	Deduction for Wife A deduction of RM4,000 is allowed to the husband if the wife is living together with him in the basis year and has no source of income or no total income, or where the wife has elected for joint assessment in the husband’s name.
c)	Alimony to Former Wife A deduction is allowed for alimony payment made to a former wife, limited to RM4,000 or the actual amount paid, whichever is lower. Voluntary alimony payments made under a mutual agreement without a formal or legally enforceable agreement do not qualify for deduction. The total deduction for a wife living together (point b above) and alimony payments to a former wife (point c above) is restricted to RM4,000.
d)	Disabled spouse An additional relief of RM5,000 is available where the spouse is certified as a disabled person by the DSW.

Child Reliefs (Item 16)

A resident individual is eligible to claim deductions for children maintained during the basis year. The amount of relief depends on the child’s age, education status and physical condition, as outlined below:

a)	Child under the age of 18 years The child must be unmarried and below 18 years old at any time during the basis year. A deduction of RM2,000 is allowed.
b)	Child aged 18 years and above receiving full-time instruction Refers to education such as A-level, certificate, matriculation or preparatory courses. A deduction of RM2,000 is allowed.
c)	Child aged 18 years and above receiving further education in Malaysia Refers to education at diploma level or higher, pursued in Malaysia at an institution or professional body approved by the relevant government authority. A deduction of RM8,000 is allowed.
d)	Child aged 18 years and above and pursuing further education outside Malaysia Refers to degree or equivalent qualifications, including Master’s or Doctorate programmes pursued outside Malaysia. A deduction of RM8,000 is allowed.
e)	Child undergoing articleship or indentures The child must be unmarried and serving under articles or indentures with a view of qualifying in a trade or profession. The parent must bear expenses such as part-time education, training premiums or other related costs directly associated with the training. A deduction of RM2,000 is allowed if the child is serving article or indentures under Section 48(2)(a) of the Income Tax Act, 1967 (“the Act”). However, a deduction of RM8,000 is allowed if the child fulfills the requirements as specified under Section 48(3)(a) of the Act.
f)	Disabled child The child must be unmarried and certified as disabled person by the DSW. A deduction of RM8,000 is allowed.
g)	Disabled child pursuing higher education An additional relief of RM8,000 is allowed if the child is unmarried, 18 years of age and above and satisfies any of the following conditions: Receiving full-time instruction (excluding matriculation, pre-degree or A-level courses) at a university, college or similar educational institution in Malaysia; or Serving under articles or indentures with a view to qualifying in a trade or profession in Malaysia Receiving full-time instruction outside Malaysia in respect of a degree or an equivalent qualification, including Master’s and Doctorate.

Where the above conditions are met, the total relief claimable is RM16,000.

Life Insurance and EPF Relief (Item 17)

A total deduction of up to RM7,000 is allowed in respect of:

a)	Life insurance premium / takaful contributions / additional voluntary EPF contributions Includes premiums paid on a policy on the life of the individual or the spouse. Premiums paid on the life of child are not deductible. Includes additional voluntary contributions to the EPF made by individuals who are not employees. Deduction is restricted to RM3,000.
b)	Contributions to approved schemes / EPF / statutory contributions Includes contributions made by employees, pensionable officers or self-employed persons under the EPF act or other written laws. Deduction is restricted to RM4,000.

With effective from the YA2023, pensionable public servants are now only eligible to claim tax relief of RM3,000 for life insurance premium payments or family takaful contributions.

Private Retirement Scheme (PRS) and Deferred Annuity (Item 18)

A deduction of up to RM3,000 is allowed for contributions made to a PRS approved by the Securities Commission or for premiums paid in respect of a deferred annuity.

The deduction applies to voluntary contributions made by individuals to encourage retirement savings in addition to mandatory EPF contributions.
The total deduction is restricted to RM3,000 per individual in each year of assessment, regardless of the number of PRS accounts or annuity policies held.
For joint assessments, the combined deduction for both spouses is limited to RM3,000.
The deferred annuity plan must be approved by the Central Bank of Malaysia.

Education and Medical Insurance (Item 19)

A deduction of up to RM4,000 is available for insurance premiums or takaful contributions paid for education or medical benefits covering the individual, spouse or child.

Education Insurance or Takaful Policy

To qualify for tax relief, an education policy must meet the following conditions:

Be contracted by the individual, spouse or child with the child as beneficiary;
Include a payor benefit rider if the child is the insured;
For takaful, proceeds must be made hibah (gift) to the child; and
Maturity benefit must be payable when the child is aged 13 to 25.

Medical Insurance or Takaful Policy

To qualify for tax relief, a medical policy must meet the following conditions:

Cover disease, accident or disability for at least 12 months;
Be a stand-alone or rider policy (only rider portion qualifies);
Allow full deduction for dreadful disease rider, or 60% if packaged with term life / personal accident;
Include employee-paid group medical policies;
Exclude waiver benefit rider and travel / medical expense insurance.

For joint assessment, total deduction is capped at RM4,000.

SOCSO and EIS Contribution (Item 20)

A deduction up to RM350 is allowed for contributions made by an individual to:

SOCSO under the Employees’ Social Security Act 1969, and
EIS under the Employment Insurance System Act 2017.

The deduction applies only to the individual’s own contributions and excludes any portion paid by the employer.

Electric Vehicle Charging Facility Relief (Item 21)

A deduction up to RM2,500 is allowed for expenses incurred on the installation, purchase (including hire-purchase), rental or subscription for the use of an EV charging facility for the individual’s own vehicle.

This relief applies only for personal use and not for business purposes. The claim must be supported by a receipt in the name of that individual.

The claim for electric vehicle charging facility and purchase of food waste compost machine is restricted to a combined tax deduction of RM2,500.
Purchase of food waste compost machine (Item 22)

This relates to the purchase of food waste compost machine used for the household purpose of the individual for the period YA2025 to YA2027.

Taxpayers are only allowed to claim this deduction once for the period between YA2025 to YA2027.

The claim for electric vehicle charging facility and purchase of food waste compost machine is restricted to a combined tax deduction of RM2,500.

Deduction for individual on interest expended (Item 23)

A resident individual is eligible to claim relief for interest payment on the finance of the purchase of residential property in the basis year. The tax reliefs are as follows:

RM7,000 in relation to a residential property where the purchase price is not more than RM500,000; or
RM5,000 in relation to a residential property where the purchase price is more than RM500,000 but less than RM750,000.
The individual is not eligible for tax relief if the purchase price of the residential property is more than RM750,000.

The resident individuals are required to fulfill the following conditions to be eligible for the tax reliefs:

The resident property is the first residential property for the individual;
It is purchased and occupied as his/her place of residence and limited to 1 unit;
The Sales and Purchase agreement is executed between the period of 1 January 2025 and 31 December 2027; and
There shall be no income derived in respect of that residential property.

In scenario where 2 or more individuals are entitled to claim deduction in respect for the interest payment on the same residential property, the allowable tax relief should be based on the apportionment of the interest payment.

Conclusion

Understanding the available individual tax reliefs and rebates is essential for maximizing tax efficiency and minimizing chargeable income. By carefully claiming eligible deductions and rebates, resident individuals can ensure compliance with the Act while optimizing their tax liability. It is important to maintain proper documentation to support all claims and to review changes in reliefs and rebates each year to take full advantage of available tax benefits.

For further information, please visit the official website of the Inland Revenue Board of Malaysia at https https://www.hasil.gov.my/en

KAIZEN Group, together with its associate firms in Malaysia, can help the clients to perform these compliances formalities so as to maintain the Malaysia company in good standing. Please call and talk to our professional accountants in Kaizen for further clarification.

Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:
Email: info@kaizencpa.com
Tel: +852 2341 1444
Mobile : +852 5616 4140, +86 152 1943 4614
WhatsApp/ Line/ WeChat: +852 5616 4140
Skype: kaizencpa

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Explanatory Notes for Individual Tax Relief for YA2025 In Malaysia

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