Budget 2010 Personal Income Tax Changes

For your update, below please find Budget 2010 Income Tax Changes that is relevant to individuals :

1) Maximum Tax Rate for chargeable income exceeding RM100,000 be reduced from 27% to 26%
Effective Date : YA 2010

2) Personal Relief be increase from RM8,000 to RM9,000
Effective Date : YA 2010

3) Relief on Contribution to EPF & Life Insurance be increase from RM5,000 to RM6,000
The Additional RM1,000 relief is given soly in respect of annuity scheme premiums paid to insurance companies contracted with effect from 1 January 2010.
It is also applicable to additional premuims paid on existing annuity schems where payment commenced from 1 January 2010.
Effective Date : On or After January 2010

4) Individual who pay for their own broadband subscription fees be given tax relief on broadband subscription fees up to RM500 per year.
For those who wish to claim the RM500 Broadband Relief, please make sure the Broadband’s billing is under the Taxpayer’s name and the payment made is either by Cash or If it is by using Credit Card,
it must be charged to the Taxpayer own credit card. Otherwise it would not be allowed for deduction.

With the knowledge of above Income Tax Changes, you may start doing your Tax planning for Year 2010 in order you may fully utilise the Tax Relief given.

For those who are not really clear on Persoanl Relief entitlement for each individual, below please find the list of Personal Relief which is applicable for YA 2009 :

– RM8,000 Personal Relief
– RM5,000 Medical expenses for Parents
Parents medical bills or receipt to keep (even accepted Pharmacy Receipt)
– RM5,000 Medical expenses for taxpayer, spouse and children on serious diseases
* RM500 Complete Medical Examination Expenses (RM500 Limit sharing the RM5,000 Limit for serious diseases Medical Expenses)
– Disbale Person (further deduction)
* Own      RM5,000
* Spouse RM2,500
– RM5,000 Supporting equipment for Disable Person, spouse, children or parent
– RM3,000 Wife/Husband Relief if she has no source of income or elects for combined assessment
– Child Relief (claimed by either husband or wife)
* RM1,000 per child (below 18 years of age)
* RM5,000 per disbale child (unmarried)
* RM4,000 oer child (above 18 years of age who is studying full time)
@ Overseas University, colleges or similar establishments
@ Local University, colleges or similar establishments
– RM6,000 EPF & Life insurance premium
– RM3,000 Education or Medical premium
– RM1,000 Annuity premium on annuity purchased through EPF Annuity Scheme
– RM5,000 Fees for acquiring technical, vocational, industrial, scientific, technological, law, accounting, Islamis financing, skills or qualifications at tertiary level or any course of stury at post graduate level
– RM1,000 Purchase of books, journal, magazines and other similar publications (excluding newspaper or banned publications) for the use of taxpayer, spouse or children
To keep receipt for the purchase of any book or magazines except newspapers
– RM3,000 Purchase of Computer (Given once in three years)
– RM3,000 Net amount deposited into Skim Simpanan Pendidikan Nasional for child
Instead of saving in normal Kids Saving A/C, you may save in SSPN A/C in order to utilise the RM3,000 Relief. You may start to save now but before 31 Dec 2009 in order to qualify for the Relief.
– RM300 Purchase of sports equipment (Not include attire and shoes)
To keep receipt for the purchase of sport equipment
– RM10,000 Interest paid on housing loans for 3 Consecutive Years (S&P singining between 10 Mac 2009 to 31 Dec 2009)

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