We all hate to pay tax. Ironically, the more taxes you pay, the wealthier you are. However, it might not necessarily so. Because a person earns more than you might be paying less tax money with proper tax planning. One of the area that you can get a tax relief is for education purpose.

Education is a liberal concern because it is about empowering people with the skills, knowledge, attitude and aspiration to develop themselves. Some believe that in order to have a brighter future with better earning capability, higher education is a must. In this article, you will find the complete guide for a Malaysian on how to enjoy tax relief or tax deduction for education purposes.

Photo by bunkaaddict

There are four areas that you can take advantage of tax relief for education purposes:

1. Child education insurance policy – Maximum RM3,000
2. Skim Simpanan Pendidikan Nasional – Maximum RM3,000
3. Post graduate education – Maximum RM5,000
4. Book purchase – – Maximum RM1,000

Child Education Insurance Policy

A child education policy is a life insurance product specially designed as a savings tool to provide a lump sum of money when your child reaches the age for entry into college. If you opt for a payor benefit rider, an education policy provides the assurance that, in the event of an untimely demise of the parents or legal guardian, the child will have access to funds to help finance his/her education expenses. Under a child education policy, the child is the life assured, while the parent/legal guardian is the policy owner.

Types of child education policies available

There are two main types, i.e. an endowment or investment-linked policy. The difference between the two lies in the structure as well as the nature of investments.

1. Endowment Policy

An endowment policy combines a savings component with protection coverage. Endowment policy may be either participating or non-participating . As the name implies, non-participating policy do not participate in the life insurance fund’s profits but all insurance benefits are fully guaranteed. On the other hand, for participating policy, a portion of insurance benefits are guaranteed. However, the ultimate amount of benefits at maturity are not guaranteed as these depend on the performance of the insurance company’s participating life insurance fund.

Example of endowment education policy:
Great Eduplanner: Education Endowment Insurance Plan |Great Eastern Product Reviews

2. Investment-linked policy

An investment-linked policy combines the elements of investment and protection based on your requirement as the policy owner. It offers flexibility as you are able to increase or top-up your monthly premium contribution as your income improves. If you wish to be more aggressive with the instruments of investment, an investment-linked policy will also allow you to choose the types of funds your money will be invested in. However, like any other similar investment, there are higher risks involved and there are no guarantees on the returns, which may be higher or lower than projected.

Tax incentive of RM3,000 for Child Education Policy

One of the benefits of using life insurance as a savings tool for a child’s education policy is the tax advantage. Insurance proceeds are tax-free and you can also obtain an annual tax relief of up to RM3,000 for the payment of premiums for education insurance, subject to approval by the Inland Revenue Board. In order to qualify for tax relief,

  • the education plan must be taken up by the parent/legal guardian and it must mature when the child reaches the age of between 13 to 25.
  • It is also important that you opt for a payer benefit rider throughout the life of the policy.
  • make sure the policy has a the word “education” printed in the policy title
  • another method is to purchase an endowment policy that the life assured is the parent, but the beneficiary must be nominated to the child and mature before the child reach 25 years old.
  • Remember, if your wife elects for separate assessment, she can also claim the same amount of relief on her life, education and medical insurance premiums but not on the same child.

PTPTN Skim Simpanan Pendidikan Nasional

Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) introduced a savings scheme which puts emphasis on ‘Savings Towards Higher Education’. Besides ensuring annual dividend returns, the SSPN also provides special financial incentives in the form of Matching Grants especially for low income depositors. In addition, insurance coverage and payment of death compensation is provided free of charge to all eligible depositors.

How to Open a SSPN Account

To open an account, the application form must be submitted to PTPTN counter and any collection agent along with the following documents:

  • A copy of the depositor’s MyKad/Military/Police Identity Card;
  • A copy of the child’s MyKid/Birth Certificate/MyKad; and
  • Certification of adoption (if the SSPN account is meant for an adopted child).

For a family whose household income does not exceed RM2,000 per month, the latest income statement of the family must be submitted along with the application form and a copy of the spouse’s MyKad/Military/Police Identity Card.

The minimum total deposit for purposes of opening an account and increase of deposit is RM20 for each nominated beneficiary’s account. Deposit increase can be made as soon as the membership card is received.

Eligibility to apply for PTPTN education financing

  • For household income exceed RM2,000 per month, a minimum deposit of RM3,000 is required
  • For household income does not exceed RM2,000 per month, a minimum deposit of RM500 is required.

Benefits:

  • Tax relief on savings up to RM3,000 per year  (RM6000 per year starting 2012)
  • Free insurance coverage up to RM50,000 (dollar to dollar) for depositors who have an accumulated deposit of a minimum of RM1,000 (Eligibility for insurance/death compensation is only for depositors between 18 and 65 years, whereas death compensation is awarded only to beneficiaries aged 1 to 28 years)
  • Matching grant with a maximum endowment of RM10,000 per family (A family whose household income does not exceed RM2,000 per month is eligible for a matching grant when the child is accepted into a higher learning institution)
  • Deposit as low as RM20 at any time deemed necessary and government guarantee on savings
  • Competitive dividend rate and tax exemption on dividend

Saving Method

  • Salary deduction for the staff of government and private sector
  • Salary deduction through Biro Perkhidmatan Angkasa
  • Auto debit – Bank Pertanian Malaysia and Maybank
  • Standing instruction – Bank Simpanan Nasional; or
  • Online transaction through e-SSPN – especially for those who have savings accounts in Bank Islam Malaysia Berhad, CIMB Bank, Hong Leong Bank, Public Bank Berhad and Maybank.

Account Statement

  • The account statement is prepared and posted to the address of the depositor twice annually
  • No savings book is given
  • All beneficiaries will be given SSPN membership cards

Withdrawal

Withdrawal of savings can only be done after one (1) year of saving in the SSPN. The withdrawal of 10% of the balance in the account or RM500 (whichever is lower) once annually is allowed (after one year of becoming member). Withdrawal of up to 100% of the balance of the account is allowed if the beneficiary fulfills one of the following criteria:

  • Is accepted to any government recognised IPT;
  • Withdraws voluntarily from the education system or is terminated for specific reasons;
  • Chronic illness with no hope of recovery with doctor’s certification;
  • Permanent disability; or
  • Death

Deposit Collection Agents:
The opening of an SSPN account can be done at the PTPTN headquarters and at all deposit collection agents throughout Malaysia.
List of agent:

  • CIMB Bank Berhad
  • Bank Pertanian Malaysia (BPM)
  • Bank Kerjasama Rakyat (BKR)
  • Bank Simpanan Nasional (BSN)
  • Bank Islam Malaysia Berhad (BIMB)


Contact PTPTN:

Tel No: 03 – 2093 9889
Fax No: 03 – 2098 6589

Post Graduate Education

To promote a culture of lifelong learning among Malaysians, the Government proposes tax relief of up to RM5,000 on education fees be extended to all post-graduate studies (Masters and Doctorate leve), effective from Year of Assessment 2008.

Every individual are eligible to claim a RM5,000 relief each in respective tax returns provided that the post-graduate studies are at institutions or professional bodies in Malaysia that are recognised by the Government or approved by the Minister undertaken for the purpose of acquiring law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications. Please note that this deduction is effective only from YA 2008 onwards.

Book Hunting

To further inculcate the reading habit and in line with life long learning, the Government provides tax relief on the purchase of books up to RM1,000 per year. All the text books for your children, or your own post graduate studies are eligible for tax relief. Even the Harry Porter and magazine you buy from book stores can be used to deduct tax. But you must keep the book purchase receipt for tax audit later, if you are lucky.

Some reminders

  • buy books and magazine from chain bookstore, such as Popular, MPH, BORDERS etc. You will notice the receipt provided by Popular have [BK] printed for book items.
  • You can even order your book via the internet – Amazon, Barnes and Noble.
  • Normally, there won’t be any receipt produced when you buy magazines from local book stall. If you want your expenses to be tax deductible, avoid this.

Education Tax Relief for Malaysians

Downloads

Summary

If you fully utilized the tax relief for the above elaborated 4 areas:
1. Child education insurance policy - Maximum RM3,000
2. Skim Simpanan Pendidikan Nasional - Maximum RM3,000
3. Post graduate education - Maximum RM5,000
4. Book purchase - - Maximum RM1,000

There is a total of RM12,000 tax relief to be claimed. I will definitely use up item no.1, 2, and 4. But for item no.3, there is no clear definition of post graduate study and list of courses that is eligible. It would be nice if colleges and universities can indicate the tax relief eligibility when promoting their courses for working adults.

If your tax bracket is 21%, you will save up to maximum of RM2520 tax payable yearly.
Last but not least, I would urge that you take advantage of them all during year end.

  • Purchase your child insurance policy and pay yearly in December - the premium paid will be eligible for tax relief immediately
  • Open SSPN account in December, and max it up to RM3,000.
  • Consolidate the receipt of book purchase, and use up the RM1,000 if you enjoy reading books. If not, try buy books as gift to others whenever possible. Books are great birthday gift. It is definitely worthier than flowers.

By using this "year-end" strategy, you have kept the money with you for a full year and already reap the full investment return.

Do you have any other tips to share with us? Please comment.

More on personal tax relief, download the guideline from IRB (pdf file)


KCLau
KCLau

Personal finance author and trainer

    130 replies to "Top 4 Methods to Enjoy Tax Relief for Education Purpose"

    • GAN

      Hi,

      If the education is funded by Company, can I still claim the deduction?

      • KCLau

        Not sure though. Better ask a tax consultant.

    • Kalaivaanan Murugan

      hi,
      I went for mandarin classes (fees : arnd rm 1500). Cani claim this amount under education?

      • KCLau

        I don’t think so. But I am not a tax agent who can answer this definitively. Please consult a licensed tax agent for confirmation.

    • Ong

      Hi KC,

      May i know what is the different between life insurance and insurance premium ??

      i did purchase medical card and saving plan. Which one i should put the amount into?

      Looking forward to hear your response.

      Thanks

      • KCLau

        Hi Ong, your insurance company shall provide a statement (yearly) to spell out the purpose of the premium.
        if you examine it, the statement will show how much goes to life, medical, others etc.

        • Ong

          Thanks KC, what about petrol allowance given by company. Do i need to include it together in statutory income from employment or exclude it?

    • sm

      Hi KC, need to clarify with you for below:
      Education Fees (Self)
      (i) Other than a degree at Masters or Doctorate level-for acquiring law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications;
      Does it mean for undergrad students who are taking courses Law, Accounts, Engineering can claim tax?
      Is a course like Bachelor Degree in Business Admin eligible?

      • KCLau

        I am not sure. Please consult a licensed tax agent for confirmation.

    • Cheah

      Hi KC, i had forgotten claims my son higher degree education relief in local private university @ INTI for the year of assessment 2014 and 2015, can i appeal and reclaims it back from IRD.
      Thanks

      • KCLau

        Hi Cheah, I am not sure how to do this adjustment. You better consult a tax agent, or email/walk in to IRB to enquire.

    • Ben

      What about does with [Z] if buying from popular?
      So popular has [Z] [BK] [T]; what else and which ones can be claimed?
      Are they similar shortnames if buying from MPH?
      Appreciate your advice KC 😀

      • KCLau

        If not mistaken, [Z] zero rated.
        [BK] is book – can claim for tax relief.
        [T] standard rated tax 6%

        For MPH, I think they print [BUKU]
        In short, just look for items with [BK] or [BUKU] to qualify for tax relief.

        • Ben

          Noted, thanks so much KC 😀

    • Janet

      Hi KC,
      I am enrolled in a PhD programme (distance learning) in Europe.
      Can I claim the education fees of RM7k?
      Looking forward to your clarification.
      Thanking you in advance
      Janet

      • KCLau

        Hi Janet, I am not sure about this. It is best that you check with a tax consultant.

    • Rick

      Hi. I got married in Aug 2016 and my wife start working in November 2016. Before that, she never work and has no other income. Am i eligible to claim RM4k for the tax relief?

      Thanks in advance.

    • Yin

      Hi thanks for your article.
      I bought some books from Amazon when i was in US last year. Should i use the USD conversion rate at the time of purchase, or use the conversion rate at the time of the e-filing? Also can the shipping cost of the book be counter in as well?

      • KCLau

        I accountant just use one rate, unless I provide the conversion rate shown by my credit card statement during the time of purchase. Shipping cost can’t be included.

    • BK

      Hi!
      Do you know if the pharmacy receipts of monthly purchased medicine valid? Medicine for illness such as diebetes (insuline).

      • KCLau

        You will need prescription proof when IRB audit about your claim on pharmacy receipts for your parents’ medicine.

    • Kam MT

      Is insurance (medical benefit) bought overseas is entitled for income tax relief claim in Malaysia?

      Rgds
      Kamarudin

      • KCLau

        Hi Kam, technically the tax relief is claimed based on the insurance premium statement provided by insurance company. Here in Malaysia, insurance company issue the statement automatically during the 1st quarter each year. For policy bought oversea, will they do that for you to claim tax here?

    • Feon

      I had question on tax relief on education and medical RM3000:-

      Wife Husband Child 1 Child 2
      Medical 1500 1500 800 600
      Education 0 0 800 600
      Total 1500 1500 1600 1200

      Can I deduct base on this:-

      Wife 1500 self + 1500 child 1 = RM3000
      Husband 1500 self + 100 child 1 + 1200 child 2 = RM2800

      Both children policy under wife name but paid by husband.
      Husband & wife separate assessment.
      Pls advise.

      • KCLau

        Insurance policy premium relief is depending on the statement sent to you by insurance company. If it is under the wife’s name, can only be claimed by the wife.

        • Feon

          Oh…Thank you very much

    • Sam Kwan

      Hi KC,
      I would very much like to ask if SSPN only be allowed to withdraw upon acceptance of local universities ? what if my children are going to enroll for foreign university?
      regards,
      sam

      • KCLau

        To be sure, please ask SSPN directly for the terms and conditions.
        According to my understanding, you can withdraw when your child reaches the tertiary education age.

    • TS

      Hi,

      I undertook MBA studies from overseas, the U.K, long distance studies.

      When I went through the tax relief guidance , from my understand I can claim – post graduate studies.

      AM I right or wrong?

    • edlin

      Hi KC,

      Just wondering, are insurance and house loan bought from overseas also eligible for tax deduction?

      Thanks!

      • KCLau

        Hi Edlin,

        I am not sure about this. You better check with a qualified tax consultant.

    • ragu

      Chief, hi. is the RM 1K for Books individual relief? meaning husband and wife can claim 1K each?

      thanks, you are so helpful ! 🙂

      • KCLau

        @Ragu, yes the RM1k can be claimed separately, each.

        • ragu

          Appreciate that Chief.

          one more…. if diagnosed with a critical illness, they say alternative medications, and supplements also can be claimed up to 5K. correct?

          thanks so much for ur helpful article and time to respond 🙂

          God Bless.

    • John Lui

      Hi KC,

      Does the tax relief for ebooks or similar publications covered education videos as follows:
      1) purchased in bookstores like Popular, etc
      2) purchase online from online store and ship to Malaysia.
      3) purchased online and view the education video via online streaming
      4) purchase online and download the video to PC for offline viewing.
      Some of this education videos come together with pdf files.

      Appreciate if you can help on this. Thank you.

      Regards
      John Lui

      • KCLau

        Hi John Lui, so far I know that only books (whether physical or e-copy) is eligible for tax relief. You better check with a tax consultant whether education video qualify or not.

    • Lai Peng

      HI KC

      Does life insurance ( which has a component of savings in it – ie it matures in 15 years time, and if everyone is still alive, there will be a lump sum payout) qualify as a PRS for tax purposes and therefor a tax relief of maximum RM3000. The insurance provider is ING?.

      many thanks

      • KCLau

        @Lai Peng, I am not sure about ING plan. It is better that you check with ING directly.

    • Raymond

      Hi KC, if I withdrew my EPF savings for the purpose of studying MBA, am I still eligible to claim for the tax relief under post graduate studies?

    • yp

      A short term saving plan(endowment plan) with 30years coverage and didn’t stated as education policy. Life assured is a child, policy owner is parent. Or Investment linked product, life assured is a child, policy owner is parent. Can this products deduct Income Tax under Education relief? Or it deduct income tax under life? Thank You.

    • Fairus

      How about purchase of digital books? Such as ebooks from Apple Appstore?

    • NYC

      Hi KC,

      On purchase of books, can one use bank credit card statement to show as proof of book purchase, if the actual receipts were lost? Thanks!

      Aaron

      • KCLau

        As far as I know, that is not allowed because it can be “stationery” purchase, not books.
        So officially, you better keep the original receipt.

    • matji

      me n my wife have deposited RM1500 for each of our 4 kids. That is for year of 2010. we enjoy the tax relief for that year. during 2011 there’s no transaction at all for those account. the question is, do we eligible to enjoy the tax relief again on 2011.

      • KCLau

        you will only be able to claim relief on the amount you save during that year. (fresh money put in, not the money already in the account)

    • Lyn

      hi KC, thanks for your tips. Do you know what comes under the “sports equipment” category? Are binoculars included? thanks!

      Also, apparently, our parents’ dental bills are now tax-deductible. Is that true?

      Thanks!

    • Guat

      Hello KC,
      I have a question on the tax deduction for Education purpose – in your post, from Y2008, masters/phd can claim a relief of RM5000 for education for oneself. What was stated :
      Every individual are eligible to claim a RM5,000 relief each in respective tax returns provided that the post-graduate studies are at institutions or professional bodies in Malaysia that are recognised by the Government or approved by the Minister undertaken for the purpose of acquiring law, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications. Please note that this deduction is effective only from YA 2008 onwards.

      Question: Does this means post-graduate studies at institutions in Malaysia only? I tried to download the tax guide pdf but I think the link no longer works. Can you please help me understand? Thanks so much. Also, thanks for putting this very helpful info for everyone to see. Appreciate it!!

      • KCLau

        Hi Guat, I suggest that you talk to a tax agent to verify the latest status. As I am not a tax accountant and the rules and regulations regarding tax matters always change. Wish you all the best!

    • Jeff

      I reside in Malaysia. I work on a freelance basis as programmer through the internet. There are certain hours in the day which I need to be online. The company that I work with is a foreign company located in UAE. I am paid weekly in USD. The money are remitted to my local bank account through PayPal
      I like to find out if I were to declare this income, would it be subject to tax? Does it constitute foreign income? I may consider declare it for the purpose of application of housing loan.

      • KCLau

        Hi Jeff, the income is in fact taxable. If not mistaken, you make the money while you are in Malaysia doing the freelance programming work, and it is considered income need declaration.

    • Tang Kiu Mee

      a saving plan. Life assured is a child, parent payor – the rider. Can this product deduct Income Tax under Education relief ?
      Hope to hear u soon.
      Tq.

    • jeremy brand

      hi mr kclau
      just would like to clerify things up, i bought a book called buku magical math program for Rm100, from an education company doing workshop programs at schools, they gave me their company reciept of rm100. can i claim for the full Rm100 from my tax return or what?
      thanks so much for your time

      • KCLau

        Yes because the product you pay for is a book.

    • sid

      Hi KC,

      You mentioned the following:

      “You can even order your book via the internet – Amazon, Barnes and Noble.”

      Does that mean that books purchased from sites like Amazon are tax deductible? I purchased a lot of books from Amazon but one of my friends mentioned that i can only claim for books purchased locally. Also, the receipts that i receive from Amazon is in USD. Is it possible to show that as prove? Thanks.

      • KCLau

        When my tax agent do my taxes, the books bought at Taiwan, China, Singapore and also online through Amazon are being counted. You can use a foreign exchange rate applicable to your purchase. As long as you have the receipt of purchase, the payment is tax deductible.

    • JC

      Hi kc,

      I understand there’s a tax relief for individual education fees up to RM 5k for recognized institutions of higher learning other than a degree at Masters or Doctorate level-for acquiring law, accounting,
      Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications . I wonder what’s the definition of the ” recognized education of higher learning” . I tried asking the income department but they seemed to ignore my answers and just tell ” higher learning ” . hope to get a reply from you.
      thanks

      • KCLau

        Hi,
        In fact it is very hard to define. You better check with a qualified tax accountant.

    • kslim

      KC,

      May i know installments of 7 years study loan from bank rakyat for taking MBA course is entitle for tax deductible under personal education?

      • kslim

        KC,

        I no receive any reply or comment from you.

    • Noel

      Hi KCLau,

      Can you please tell me under which relief types I can claim my ACCA Subscription fee?
      My source of income is accounting-related.

      Thanks a lot in advance!

    • Jialun

      It’s written “Purchase of personal computer for individual of up to RM3,000 “. What if I build my own PC and purchase the PC components separately instead of buying a unit of PC?

      Can I actually add up all the components (computer related items) bought and claim it as a unit of PC since PC consists of many components?

      • KCLau

        Jialun, you can do that.

        • Jialun

          Thank for the reply KCLau.

          So, I guess receipt would definately needed for the claim. But what if I’m buying a used computer from someone else, the likelyhood is I wouldn’t get receipt for this kind of purchase.

          • KCLau

            That will be very hard to prove. Get the seller to issue you a receipt and sign on it.

    • CHONG KONG HUI

      Pelepasan cukai pendapatan ke atas simpanan SSPN:

      Ibu bapa dan ibu bapa angkat/penjaga yang sah dari segi undang-undang yang menyimpan dalam akaun SSPN untuk manfaat anak diberi pelepasan sehingga maksimum RM3,000 setahun tertakluk kepada jumlah simpanan bersih tahun semasa;
      Ibu bapa yang membuat taksiran berasingan dan telah membuka akaun simpanan SSPN berasingan atas anak yang sama diberikan pelepasan sehingga maksimum RM3,000 seorang setahun;
      Ibu bapa yang membuat taksiran bersama dan telah membuka akaun simpanan SSPN berasingan diberi pelepasan sehingga maksimum RM3,000 setahun; dan
      Individu yang menyimpan untuk diri sendiri tidak diberi pelepasan cukai.

      Source http://www.ptptn.gov.my/web/guest/simpanan/cukai

    • Candy

      Hi KC,

      Are you sure that SSPN tax relief is RM3000 for each parent? I thought it’s RM3000 max which you can claim under either husband or wife?

      • KCLau

        If you have only one child, either the mother or the father can claim the RM3000 because they only allow one parent to open account for each child. So in order to have the tax saving for both parents, you will need to have at least two children.

    • Chong Kong Hui

      ACCA subscription fee is deductible is your source of income is related. Say you only have rental income and not employed as Accounting related post… sorry, not deductible.

    • CH

      I bought a Electonic Dictionary for my child in Year 2009 with price of RM1300. Can I claim this from tax relief under book purchase? Or, I can have the tax relief under personal computer?

      • KCLau

        Better to ask a tax agent about this issue.

    • Chris

      Hi KC,
      I bought a Laptop and hv claim the deduction for Y/A 2008(individual assesment). My wife bought a laptop last year. Can i claim deduction for her laptop for Y/A 2009 since i decided to go for joint assesment with my wife for Y/A 2009? Thanks

      • KCLau

        Hi Chris, not sure about this. Please verify with a qualified tax agent.

    • ling

      hi lau,
      is ACCA annual subscription fee deductible ?

    • Jeffrey

      Hi,
      Can purchase of ebook entitle you for a tax deduction?

      • KCLau

        I just called my tax consultant, she said “yes” for ebook.

    • Mrs Boey

      Hi KC,
      On SSPN tax relief, is it every year must deposit RM3000 only can entitle the max limit of tax relief? So if I deposit RM3000 on SSPN in the year 2008, and I do not deposit any amount in the year 2009, I am not eligable this tax relief in 2009?

      • KCLau

        Hi Mrs. Boey,

        In order to entitled for tax relief every year, you will need to deposit RM3000 every year.

    • Raj

      Hi KC,
      Am I eligable if i have taken some professional courses last year (e.g. Project Management Certification from Project Management Institute – It is a international recognized certification)

      • KCLau

        I am not sure about the courses. You should ask a tax agent’s advice on this.

    • Pang CS

      Hi KC,
      On SSPN tax relief, the limit of up to 3000 is per child ? Is it 3K or 6K of tax relief if I deposit 3K annually for each of my 3 children ?

      Appreciate your comments

      • KCLau

        Hi Pang,

        It is 3k maximum tax relief for each parent, regardless of how many children you have.

    • connie

      KC Lau, Good day to you! can i check with wife relief/husband relief is only for joint assessment or both deduction for split income tax computation?

      • KCLau

        Hi Connie,

        It will be a separate relief for individual parent if you separate assessment.

    • DaRLeNE^_^

      KC Lau, Good day to you! Can I check with you whether flash cards fall into the category of book purchase?Thanks for your clarification and have a blessed day!

      • KCLau

        I am not sure about that. A tax consultant is better to answer your question.
        But normally when you buy those educational material at bookstore, they will have [BK] printed behind the item to indicate that it is book.
        You can refer to your receipt to see if it marked as [BK].

    • NiNa

      My income in 2008 was not eligible to be taxed and I bought a laptop in early 2008.

      However, my salary in 2009 is now taxable. Do you think I could use the laptop purchase made in 2008 as relief for my Y/A 2009?

      • KCLau

        @NiNa,

        I am afraid that it is not possible. Better check with a tax consultant.

    • Pris

      Hi KC,

      Thanks for the tips.
      I paid a lump sum on tuition fees (> RM10K) for a 2-year-MBA course, and have a single receipt.
      Can i use it for relief for both YA2008 and YA2009, with only 1 receipt?

      Many thanks in advance!

      • KCLau

        @Pris,

        I don’t think you can split it into two years relief. You better check with a tax consultant to make sure of this.

    • SS

      I posted a comment earlier today and it has gone missing. Tried to contact you through the Contact Us page but the submission doesnt work eventhough I tried three times.

      I just would like to know why was my comment deleted when it has a valid question that has none of any inappropriate content to it.

      Thanks.

    • SS

      Hi there. I have a question, maybe silly to most. But why is it a good thing to spend up to RM1000 on books for relief, which will at the end contribute to just a small sum of money saved?

      My point is, basically, people still wont really be spending that much on books since you get back only that little. RM1000 is a lot to be spent just on books even if you have interest in it. I hope this question makes sense…thanks!

      • KCLau

        @SS,

        Your comment is not missing. I just haven’t approved it until now(after a long CNY holiday)
        RM1000 is quite a big sum to spend on books. I used it up, and even exceeded the amount last year. I spent about RM2300 in 2008 on books.
        For those who don’t like reading, it is in fact useless to spend money on books.

        To me, books
        1. give me entertainment – although I do play basketball, video games, PC games, iPhone games, watch movies etc.. reading book is still a great entertainment to me
        2. fill up my mini library – it decorates my home office & music studio, makes the place looks classy and “educated”
        3. teach me a lot of things – self-improvement, business, creativity, writing etc.

        Just for the above reasons, I bought a lot of them.

      • Guciguci

        I know this reply is abit ‘late’. Below is a scenario u should spend 1000 on books whether u like it or not.

        1.Joint assessment – where husband/wife without source of income e.g. unemployed.

        2.when for example, total Chargeable income 35,500. (just slightly over 35k bracket)

        Hence, by spending 500 on books, u bring down ur CI to 35k, avoided 500 x 12% tax and get further tax rebate on personal rebate 400 and Husband/wife rebate 400 for CI below 35k. Plus, U can sell ur books later.

        • KCLau

          @Guciguci, you’ve provided us a very creative suggestion!

    • […] Some countries, such as Malaysia, enable tax relief for book purchase. That means you can pay less for tax by buying books, as long as you keep the purchase receipt properly. This government policy serves as an incentive to encourage people to read more and take education seriously. You can read more about it here. […]

    • Yoyo

      hi KC,

      one more question from me, regarding the tax relief of RM3000 for purchase of computer.
      If I bought a notebook by EASY INSTALLMENT SCHEME for 12 months through Maybank, am I eligible for the relief? if the installment start Dec 2008, when can I claim for the relief? 2008 or 2009?

      Thanks

      • KCLau

        If not mistaken, you are only allowed to claim the amount you’ve paid. In your case, only the first installment in Dec 2008 is eligible.
        To be sure, consult a tax accountant.

    • Yoyo

      hi KC,

      want to check with you regarding the SSPN deposit.
      if I open an account in DEC 2008 and make a
      deposit of RM3000, am I eligible for tax relief for year ending 2008 or 2009?? advice needed.

      • KCLau

        @ Yoyo,
        for accounting year 2008

    • KCLau

      this happens quite often. This is some sort of spam blog, which is very
      unethical.
      Thanks for pointing out.

    • Anonymous

      Check this
      http://enterpriser.wordpress.com/2008/01/12/top

      Did he contact you first?

    • fortknox

      Nice article on how to use the tax relief on education. How about writing an article on tips regarding enjoying the other tax reliefs like computer and buying sports equipments? I'm from the Philippines and I just moved to Malaysia to work.

    • cheoky

      someone told me that i will save on tax if i don’t take out my distribution from my unit trust investment but let my fund accumulate. is that true?

      • KCLau

        @ Cheoky

        when a unit trust fund distribute it’s income, you will be taxed regardless of if you reinvest, and opt to receive the distribution.
        So .. no, you won’t save on tax.

    • JY

      Hi KC,

      Do MBA / DBA / CFP / PhD by research education fees enjoy personal relief for resident personal income tax (RM 5000)?

    • LSH

      I have bought a new laptop in 2006 and a new PC in 2007.

      Can I claim for $3000 tax relief for year 2007 if I already claim for $500 tax rebate for the year 2006.

      Thanks in advance.

      • KCLau

        @ LSH
        I just got a reply from my tax consultant.
        The answer is “no”.

    • BC

      Thanks for replying, do you know of any tax consultant that i can verify this with?

      BC

    • BC

      HI KC,

      Thanks for replying. Can i throw in a few more challenges?
      Scenario A.
      Date: 1 April 2007
      Laptop – 2500
      Printer – 300
      Scanner – 200
      Total – 3000 (Single Receipt)

      What is the amount for computer relief?

      Scenario B.
      Date: 1 April 2007
      Computer – 2000
      Hardware Upgrade – 300
      (RAM, Hard Disk)
      Router – 200
      Total – 2500 (Single Receipt)
      What is the amount for computer relief?

      Scenario C. (following Scenario B)
      Date: 1 Sept 2007
      Lightning Strike!
      Killed Router and Motherboard.
      No covered under warranty.
      Replaced Motherboard & Router.
      Total 500

      What is the amount allowed for computer relief? (Scenario B + C) total amount combined.

      • KCLau

        All the scenarios should be entitled to full RM3000 relief.

        I am not a tax consultant. It is best to verify these with one.

    • AL

      Hi KC,

      It’s a personal computer use. Since the tax rules change from rebate to relief. So the relief $3000 is starting fresh from Y/A 2007, regardless that I had claim a rebate in Y/A 2005? Or my assumption is wrong?

    • AL

      Hi KC,

      I have a scenario on computer tax deductible.

      I bought a personal computer in 2004 and got rebate $350 in Y/A 2004. At that time the computer rebate is allowed once every 5 years.

      In year 2007, I bought laptop for $3500. Same time, it’s announced change in computer rebate to relief up to $3000 once every 3 years.

      Would the change in computer rebate to relief means that laptop purchase in 2007 be allowed for deduction even though the 1st computer is not 5 years yet?

      Thanks.

    • BC

      Hi KC,

      I have a question not related to education but Computer Tax Relief.

      There is a 3000 tax rebate for Computer Purchase for Y/A 2007 personal income tax declaration.

      Would i be eligible for this tax rebate if i purchase a lap top on 20 April 2008 for the amount 3200.00?

      Thanks.
      BC

      • KCLau

        First of all I would like to clarify that the tax rebate of RM3,000 for the purchase of personal computer which is given in YA2007 is actually a kind of “relief” instead of “rebate”. One can claim only once in three years time.
        If you have had claimed it in YA2007, then, it means that you can not claim the relief of RM3,000 for the second time in YA2008.

        However, if you bought the laptop for business purpose, then you can claim it under Capital Allowance(CA). The claim would base on the actual price that you had incurred in the purchase of the computer.
        & the CA would take 2- year time to fully claim it. This normally have more benefit than claim as personal computer relief if the cost of computer is more than RM3,000 & your business is making profit.

        But pls bear in mind that you would probably be liable for tax if you sold the computer in future.

        • Horcl

          If the computer is purchased overseas – possible to claim relief? say in SG……

          • KCLau

            Yes. You just need the receipt.

    • JY

      Hi KC,

      Would like to check with you whether it is against Malaysian’s law if I request my company to move a portion of my salary to EPF as Employer’s EPF contribution to minimise personal income tax? Thanks

      • KCLau

        @JY,

        Yes. You can do that. Employer can contribute up to 19% and the benefit paid to employee is totally tax free. You will have to negotiate with your employer for this arrangement.

    • MW

      Hi KC. I’ll never expect I’ll bump into an old friend’s webpage by google-ing “Skim Simpanan Pendidikan Nasional”. Haha…

    • rokaiyah

      I have checked and you are correct. Although the proposal was made at the 2008 budget, the effective date is Y/A 2007.( There was apparently an error on the effective date in the budget handbook that I referred to)

    • rokaiyah

      CK, Tax relief on SSPN is only available from Y/A 2008

      • KCLau

        My accountant said that it is eligible for Y/A 2007

    • ck

      hi, KC i just received Borang BE two days ago and i couldnt find the provision for personal relief on savings in sspn. from the notes attached personal tax relief for EPF & insurance allowed is max RM6,ooo while education / health insurance is max RM3,000.

      Appreciate if you could advise on the saving in sspn.

      Thank you

      • KCLau

        Hi CK,

        You will have to consult a tax accountant on filling up the form.

        • Fara

          Hi KC,

          Does that mean i can claim from Tax RM6000 ANNUALLY (?) for RM3000 Child Education Policy and Rm3000 from SSPN?

          So if I’m saving RM250 monthly to Child Education Policy and another RM250 monthly for Child Education Policy.. it will sum up to RM3000 by the end of the year for each of them… Can I claim full RM6000 from Income Tax every year for one child?

          What if I’ll have another child.. let’s say in 3-4 years time after the first.. can I do the same? (as in .. apply RM6000 x 2 child = RM12,000)

          What is the maximum number of child allowed for the Income Tax Relief?

          Both hubby and I planning to have a child soon, so we are doing early budgeting. Hope you can assist us 🙂

          • KCLau

            Hi Fara, you can only claim tax relief up to RM3000 on child education policy and separate RM3000 of SSPN savings, each year. So Maximum RM6000. Even if you save more say RM10,000, you can only claim RM6000 every year.

            Since SSPN only allow one parent for one child, you and your husband will need to open SSPN saving accounts for separate child in order to claim tax relief for both parents.

            • Fara

              Thank you for the reply.

              One more question, what if my first child managed to get a scholarship, can I change the name to my second child? Or… is there a possibility to open SSPN Education account but the receiver is open to any of my child?

              I checked in PTPTN website that for a person who is 29 years and above (3rd category), they can only open their own account? Does it make me eligible to claim from income tax for my child’s education?

    • […] Four Ways to Enjoy Personal Tax Relief for Education Purpose {Complete Guide for Malaysians} We all hate to pay tax. Ironically, the more taxes you pay, the wealthier you are. However, it might not necessarily so. Because a person earns more than you might be paying less tax money with proper tax planning. One of the area that you can get a tax relief is for education purpose […]

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