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Taxes is one of those things that will follow us through life, so what a boon to have tax relief! Did you know that a reading habit can actually save you tax money? Or pampering yourself with a new smartphone? An active lifestyle with sports membership could also deduct your taxes! Being familiar with our tax system has its perks. Give yourself a break with these tax savings that you may be eligible for come the next income tax season. We won’t cover the basics of income tax relief such as medical expenses and family-related or child tax relief. Instead, we’ll focus on better life choices you could make that maximises savings.

1. Education and lifestyle

Upskilling yourself is always a win, and consider it a double win with a claimable amount of RM7,000 for educational expenses! Any postgraduate degree is eligible for the deduction, as well as specific subjects at the tertiary level. Let this be the push you needed to further your education and your career prospects.

 

Enrich yourself further by buying more books or any publication, print or digital. Up to RM2,500 can be claimed. Under the same lifestyle category, you can also claim for the purchase of gadgets, internet subscription, sports equipment and gym membership (time to invest in a workout).

2. Insurance

Claim up to RM3,000 for insurance premiums that offer education and medical benefits. This is separate from claims under medical expenses
or education fees, which are their own categories. If you’ve been looking at insurance plans to protect yourself or your loved ones, consider opting for one that has these benefits.

 

Life insurance is deductible by up to RM7,000 for civil servants. For private sector workers, the RM7,000 relief is split into RM3,000 for life insurance and RM4,000 for EPF contributions.

3. Private retirement schemes

While most investment types are not entitled to tax relief, private retirement schemes (PRS) are, up to RM3,000. This could maximise savings and pave your road to early retirement if you plan well.

4. Charitable donations and religious pilgrimages

Individual philanthropists can do good and enjoy a tax deduction on donations they make so long as it is not more than 10% of their total income. There’s your reason to donate (although you shouldn’t need an excuse to give back to the community).

5. PENJANA

This year has been especially tough for many. Thankfully, the government has announced several new tax breaks in 2020 under the government’s National Economic Recovery Plan, also known as PENJANA.

 

Any purchase of a mobile phone, laptop, or tablet can be claimed up to RM2,500. This is on top of the deductible under the lifestyle category mentioned above, and is only available for purchases made from 1 June to 31 December 2020.

 

To stimulate local tourism during the restricted travel phase, travel expenses on local accommodation and entrance fees are eligible for a RM1,000 relief. This means your next holiday is effectively discounted!

 

Tax relief on childcare centre fees have been increased to RM3,000 until year 2021. Consider sending your child to a registered childcare centre instead of relying on your poor parents as nannies.

 

All this can be quite a lot to take in – worry not, as the CIMB tax relief reminder is an initiative to alert our credit and debit card customers on the possible tax relief they stand to gain from their card transactions. The reminders will be sent

to CIMB cardholders who spend on any eligible transactions for tax relief for each assessment year.

 

This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy among Malaysians. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve all our well-being. This, in turn, achieves CIMB’s purpose of advancing customers and society.