Personal Finance Term
Tax Relief
An amount you can deduct from your total income before tax is calculated, lowering your chargeable income and therefore your tax. Reliefs reward specific spending like EPF, insurance, education, and medical costs.
Malaysia offers a long list of personal reliefs — automatic ones such as the individual relief, and claimable ones for EPF and approved schemes, life and medical insurance or takaful, lifestyle spending (books, devices, internet, sports gear), medical expenses, parental care, child relief, education fees, and SSPN savings, among others. Each relief has its own annual cap, and the exact amounts and categories are reviewed in the national Budget each year.
A relief reduces the income that gets taxed, so its value to you depends on your tax band — the higher your rate, the more each ringgit of relief saves. To claim, you generally just need to have spent on the eligible item and keep the receipts for seven years in case LHDN asks. Plan relief-eligible spending before year-end, since unclaimed reliefs cannot be carried forward to a later year.