KUALA LUMPUR (Dec 24): The Inland Revenue Board Of Malaysia (IRB) has increased its assessment year 2019 resident individual tax relief for life insurance and Employees Provident Fund (EPF) contribution to RM7,000 from RM6,000 in 2018, the IRB said on its website.
According to the IRB's assessment year 2019 tax relief schedule for resident individual, those in the pensionable public servant category are entitled to a restricted RM7,000 tax relief for their life insurance premiums.
For individuals outside the pensionable public servant category, the IRB said life insurance premium tax relief is restricted to RM3,000 while contribution to the EPF or approved scheme is entitled to a restricted tax relief of RM4,000.
The Edge Malaysia Weekly, in its July 8-14, 2019 issue had reported on changes in the assessment year 2019 resident individual tax relief for life insurance premium and EPF contribution.
The Edge Malaysia Weekly reported that more contributions to the EPF stand to be taxed next year and that tax-savvy individuals would know that when they next file their income tax returns for assessment year 2019 early next year, the RM6,000 relief for the 11% statutory EPF contribution will no longer be combined with the annual life insurance premium.
"As it is, the tax relief would be separated to RM4,000 for EPF and RM3,000 for life insurance starting assessment year 2019. Local and foreign tax residents who previously claimed the full RM6,000 life insurance relief but do not contribute to EPF would pay up to RM840 more income tax next year if they fall under the top 28% tax bracket.
"EPF contributors with at least RM60,000 annual income (RM5,000 a month) and whose life insurance premium is more than RM3,000 a year (>RM250 a month), would see a net RM1,000 increase in relief combined. This works out to RM80 to RM280 tax savings, depending on whether you are in the 8% or 28% tax bracket," The Edge Malaysia Weekly reported.
Read : Edge Weekly - The State of the Nation: Should EPF tax relief be reduced next year?