04 April 2011

Personal Income Tax: Child Relief

When we are having children, it's a gift from God. And, Malaysia is a blessed place to live, a place where no earthquake and volcano. Although we once hit by tsunami, but it brings minimal effect to us. Thank God.



In line with the effort to increase Malaysian workforce, in achieving self-sustainable economy with strong domestic consumption, Government has laid out several tax relief especially meant for child. Dubbed as one of the "major investment" of a family, raising up a child could easily cost a family few hundred thousands (if not millions). Let's take a look at some of the tax advantages of having a child.

Child Tax Relief
Married couple can claim child relief of maintaining any child. The children can be their own child, step child, or legally adopted child. Then, there are subdivided into 4 different categories.

Source: IRB, Finance Malaysia Blog

Generally, parents can claim tax relief of RM1,000 per unmarried child per year, until he or she turns 18. An unmarried child who is over 18 and continuing full-time education at a secondary school, he or she entitles the parent to a RM1,000 tax relief.


Meanwhile, parent may claim a tax relief of RM4,000 once the child is 18 and above, and pursuing full-time tertiary education (diplomas and above qualifications) locally or overseas. The said tertiary education must be a program and in Higher Education Institute that is accredited by related Government authorities.


For those unfortunate Disabled child, the tax relief is RM5,000 per year as long as he/she is unmarried. Other than that, an additional relief of RM4,000 will be granted if the disabled child pursues a full-time tertiary education just as an ordinary child mentioned earlier.

Frequently Asked Questions
  1. Is there a limit to the number of child entitled for child relief?
    • There is NO limit to the number of child, but please take note that relief will only be given to unmarried child.
  2. Can husband and wife claim for the same child relief?
    • NO. Instead, the child relief should be claimed by either spouse who has the highest taxable income in order to minimize the tax payable. It should never be divided between husband or wife.
Source: IRB

6 comments:

  1. i have 2 questions:

    I am divorced and have two kids below 18..the custody is given to my ex wife..

    I am paying RM2,200 per month as part of child maintenance.

    Q1: Who has the priority to claim child relief of RM1K?
    Q2: Can i claim the expenses of RM2,200 as part of any tax reliefs?

    Regards

    ReplyDelete
    Replies
    1. Hi, below is our answer for your questions:

      Q1: Since the custody had been given to your ex-wife, priority to claim child relief will be given to her also.
      Q2: NO. Anyway, you are entitled for alimony payments tax relief of up to Rm3,000

      Hopefully, we can address your concern. Thanks.

      Delete
  2. Hello Blog Admin,

    May I know what kind of document(s) should I prepare for the 3rd kind of child tax relief (i.e. RM4,000) in order to prove that the child is undertaking a full-time undergraduate study in or outside of Malaysia? For example, tuition fee receipt or University offer letter?

    Thank you.

    ReplyDelete
    Replies
    1. Hi TYZ,

      Any supporting documents will do. Yes, it can be tuition fee receipts or University offer letter or even the yearly semester result slips as a proof. Thanks.

      Delete
  3. If the child is a partner of partnership,just a name on it,but yet receiving the full time education in Taiwan university,so was it suitable for parent to claim the child relief?

    Thank you

    ReplyDelete
  4. thanks for the tips and information..i really appreciate it..tax services in Houston

    ReplyDelete

Finance Malaysia Blog appreciates your comment. Cheers!

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