Want to get more tax saving? Please read on…
Although this article is somewhat considered late for individual tax-payers this year, this could be useful next year anyway. When you buy insurance, besides getting the comprehensive protection and a worthwhile investment that will keep you financially stable should the unexpected happen, one more feature are very important for every tax payers.
Under Malaysian Income Tax Act 1967, you will also enjoy tax relief benefits provided. These tax incentives are given by Malaysia government to encourage us to own a protection plan, thus, inducing a better life planning among Malaysians.
Oppsss... actually this can and that one is cannot?
Oppsss... actually this can and that one is cannot?
- Premiums on life insurance and/or deferred annuities.
- Premiums on education or medical benefits.
How much tax relief?
Up to Rm6,000 for life insurance premiums and EPF contributions.- Up to RM3,000 for life insurance premium payments or family takaful contributions or additional voluntary contributions to EPF. (Changed since YA2019)
- Up to Rm3,000 for medical and education policies premiums.
- Beneficiary is the child.
- The life assured is the parent and the child is the nominee.
- Maturity amount must be payable when your child is between the ages of 14 to 25 years.
Or,
- The life assured is the child.
- Parent is the proposer.
- Payer benefit is attached for the full term.
- Maturity amount must be payable when your child is between the ages of 14 to 25 years.
You may qualify for tax relief under Medical policies if:
- Expenses are related to medical treatment resulting from a disease, accident or disability.
- The policy must be for coverage of 12 months or more.
- Both standalone policies and riders qualify, but if it is a rider, only the rider premium qualifies for deduction.
How do I know how much relief can I deduct every year?
Every year, your insurer will send you a statement for tax relief purpose and you just need to fill in the entitlement amount according to different category of relief. You may request from your insurance company or agent, if you receive it by mail.
My premium is Rm2,400 . Why the statement only shows Rm1,800?
Tax deductible is based on the actual premiums paid for that particular year. In this case, you only paid Rm1,800 for that year of assessment.
If I buy insurance for my parents, can I get the relief?
NO. Your parents can get deductions if they bought insurance for their own. However, you may claim for your parents’ medical expenses of up to Rm5,000.
From 2010 onwards, premium on annuity scheme or additional premium paid on existing annuity scheme is qualify for another Rm1,000 relief. Amount exceeding Rm1,000 can be claimed together with life insurance premium category.
From YA2012 onwards, you may qualify to claim tax relief of up to RM3,000 if you invest/save money via Private Retirement Scheme (PRS). (Click here for more PRS details)
From YA2012 onwards, you may qualify to claim tax relief of up to RM3,000 if you invest/save money via Private Retirement Scheme (PRS). (Click here for more PRS details)
Since the above criteria may change from time to time by government or LHDN, kindly seek advice from your own tax consultant if needed. Thanks.
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Read our previous articles on PRS here:
How Private Retirement Scheme (PRS) works actually?
What are the TAX benefits of Private Retirement Scheme (PRS)?
Do you understand the PRS Framework and its Lingo?
[PRS Nomination] What should I take note?
3 Different Types of PRS Distributors
annuity scheme - some insurance product that work some sort of like investment product? Which we get come interest + cash value after a period of time?
ReplyDeleteAdditional - what ever payment paid from 2010 onwards? Let says i have been paying rm300 every month since 2009... payment that i made from Jan 2010 til Dec 2010, are tax exempted?
Hi Arron, annuity scheme is a scheme where you get a series of cashflows (annually) for a predetermined period. To qualify for tax relief or not, it was stated in the insurance plan's product disclosure sheet.
DeleteNO. Only premium paid for NEW annuity plan bought after 1Jan 2010 is entitled to the additional RM1,000 tax relief.
My statement from insurance company stated below for tax purposes:
ReplyDeleteTerm Assurance Premium
Living Assuarance Premium
Personal Accident
Which one I can entitle for a tax relief under insurans nyawa dan KWSP?
Term and Living assurance are entitled for tax relief under category "Insurans Nyawa dan KWSP". However, Personal Accident NOT entitle. Anyway, you MUST refer to "Tax Relief Statement" issued by insurance company on the exact amount for each category. Thanks.
DeleteHi,
ReplyDeleteAbove were all about tax relief , i have a different question here , this is regarding "income taxable" . Simple question but i 've been looking around for solid answer with concrete evidence/prove .
In the event of the death of my parent , is the insurance compensation accounted to me taxable ? or non-taxable ?
Thank you very much ..
Hi Hillwalker, thanks for your question. If you're the beneficiary of your parent's insurance policy, it is NOT taxable. Otherwise, it's taxable. So, please make sure you are the "beneficiary" of the policy.
DeleteAnyway, in this case, if your name appear as nominee of your parent's policy, then you're definitely the beneficiary and it's not taxable. Thanks.
If I buy insurance for my "retired" parents, can I get the relief?
ReplyDeleteCannot, no matter your parents already retired or not. However, you may claim for your parents’ medical expenses of up to Rm5,000.
Deleteif i buy the life insurance to my child, can i get the relief?
ReplyDeleteYes. Example, if you have one child with Rm1000 medical relief. Either you or your spouse can entitle for Rm1000 it. But, please note that, you cannot separate it into let's say Rm600 for you, and another Rm400 for your spouse. Thanks.
DeleteIf my wife(who is housewife) buys a insurance for my child, can i get the relief? Will appreciate if you can reply quickly.. thanks in advance...
DeleteHi Baratam, our answer is NO. Only the policy owner can claim for the insurance tax relief for child, and that was medical and education type of policy. Anyway, you can opt for joint-assessment (together with your wife), in order to get the relief (medical or education policy). Thanks.
DeleteHi there.
ReplyDeleteMy question is the same with Chin Lee, but when you answer you stated medical relief so I am a bit confused here.
Said if my insurance statement state that it's a life policy for my children, then I can claim it under medical or education 3,000 part, is it?
Btw, it's a very resourceful blog, thanks for your help.
Hi Big Man,
DeleteIt should be like this. If you bought a medical plan for your child, you're entitled for the medical relief.
However, for "education" policy (NOT life policy), it depends on the policy whether it fulfill the said condition explained above. Thanks.
Hi, what if the life insurance is purchased overseas? is it still qualified for exemption?
ReplyDeleteNo. Only life insurance purchased from a Malaysia incorporated insurer entitles you for the tax relief above. Thanks.
ReplyDelete"No. Only life insurance purchased from a Malaysia incorporated insurer entitles you for the tax relief above. Thanks. "
ReplyDeleteHi, can you clarify under which ruling for the above statement ? We can't find any rules or act to support the above statement. Thanks in advance for the useful information.
Hi, we don't have the statement. Sorry.
DeleteHi
ReplyDeleteI am here in Malaysia for almost 12 months. I am a Tax resident here in Malaysia. I have life insurance policies going on in India for few years. So this is not eligible here?
Similarly, i spend money for my parent's medical expenses incurred in india. Is it possible to claim that under "Medical expenses for parents"
Thanks
Hi, our answer was NOT eligible. Thanks.
DeleteIf I buy life insurance for my spouse, can I get the relief?
ReplyDeleteNo. You can't. Thanks.
DeleteI am an indian citizen working in Malaysia living with my family. I have a medical insurance in india which I am paying through my earnings in Malaysia. Can I claim this under "Medical insurance" category in Malaysia?.
ReplyDeleteNo. Because the insurance must be bought from Malaysia incorporated insurer. Thanks.
DeleteIf I am the policy owner and my son is the life assured can I claim under the tax relief for life insurance premium
ReplyDeleteYes. Please refer to the annual tax statement issued by insurance company and key in the amount accordingly.
DeleteHi, there.
ReplyDeleteI have some enquiries in regard to the income tax of individual:-
(1) If employee buy his own medical insurance and his company subsidy a certain amount of his medical insurance premium, could the employee claim the tax relief? Is this subsidy considered as perquisite to the employee?
(2) If employee buy his own medical insurance individually and his insurance company bill directly to his employer, thus the premium borne by his employer, could this premium be considered as perquisite to the employee?
Hi.
DeleteTo answer both questions, it depends on who is the policyholder, regardless of whom is the one paying for it. If the policyholder is individual employee, then the employee entitles for the tax relief.
If the employer is the policyholder, then the employer can claim for tax deduction. As far as we know, there is no "insurance premium subsidy" under employer tax file. Thanks.
Hi
ReplyDeleteI am an employee and my husband retired . I bought a policy for my daughter. She is 21 above now. Which can I claim for tax relief? The tax relief category from the statement :
1. Investment (life)
2. Hospital (medical)
3. Riders( medical/life)
Which can I claim? Can I claim hospital and riders under medical. Thank you
Hi, based on your statement, it means that you're entitle for ALL of those relief. Otherwise, it won't list out for you.
DeleteYes, you can claim relief on the 'Riders' also under life (100%) or medical (60%) category. Meaning, you can only put 60% of that amount if you choose to put under medical category. Thanks.
If the sole proprietor purchase the insurance for the employee (His Son) under the sole proprietor company name as policy holder and the beneficiary under the sole proprietor company name.Can sole proprietor company claims 100% business expenses?Thanks
ReplyDeleteIf the sole proprietor was registered under own name, it was like a father buying insurance for the son, then it's NON tax deductible.
DeleteIf it was registered as 'enterprise' (not using own name), then it can be tax deductible under company expenses.
On the other hand, a policy owner can pay his employee an allowance to buy insurance. Then, the allowance can be treated as company expenses.
hi,
ReplyDeleteIf i buy an endowment policy for my 13 yr daughter where the policy is in my name but the life assured is my daughter..can i claim the premium paid under the life deduction.
One tax officer says no i cant claim that..only can claim if it is a medical or education policy.
Your comment please. thanks Ram, Penang
Hi Ram,
DeleteEndowment policy falls under Education category. Make sure it fulfill the criteria (as stated in this article above) to qualify for Child Education tax relief.
Thanks.
When you said "medical policy bought for parents" is not qualify for relief, but we can still claim under parents medical expense, shall i take it that we can claim the whole total premium paid up to 5K?
ReplyDeleteHi Hadi,
DeleteInsurance and medical expenses is different. We are talking about premium paying for medical insurance here. The 5k you're talking is medical expenses spent on parents' medical fees.
Conclusion, you can't claim medical insurance tax relief for your parents. Thanks.
Insurance bought overseas is entitled for income tax relief claim in Malaysia - we have checked with IRB. The comment from blog operator is not accurate.
ReplyDeleteThere are many country recognized the medical insurance bought for parent is entitled for income tax relief claim, why Malaysia not? This is not fair if insurance company pay on behalf when medical expenses incurred for our parent and we still unable to claim under tax relief if it fully cover by insurance company.
ReplyDeleteHi, I am paying for my children's life, medical and critical illness policies since they were still young. If they have grown up now, started working and have to pay income tax for themselves, can they claim tax relief for their policies which I have paid?
ReplyDeleteHi, if your children is above age 18, the policy can be vested under their own name as policy owner. Then only, your children can claim for the tax relief.
DeleteKindly check with your insurance company. Thanks.
Thanks for your quick answer which I appreciate very much.
DeleteIs insurance bought overseas is entitled for income tax relief claim in Malaysia? There is a previous response saying that it is after checking with IRB. Please confirm.
ReplyDeleteHi Kam. after checking around, we found that overseas insurance is entitled for tax relief in Malaysia as long as the plan is a licensed plan here. Kindly check with respective insurer or IRB to double confirm.
DeleteTq
Is insurance from overseas claimable for tax relief?
ReplyDeleteHusband bought a LIFE insurance and MEDICAL insurance for his wife, can the husband claim the Life insurance and Medical insurance as relief in the seperate assessment?
ReplyDeleteHi, if my parent have their own income tax filing but, can I claim tax relief on my parent medical expenses up to RM5k? And what if the medical expenses is partially covered by insurance company, can I claim the balance of medical expenses that I paid?
ReplyDeleteHi I have purchase mobile phone last year and not claimed in last year tax, shall i claim this year with same bill.
ReplyDeleteCannot. It follows the date of the bill/invoice. Thanks.
Delete