Time to do tax!! Again it’s the time of the year to do Tax be it employment income, rental income or business income… I believe you would be busy checking and finding ways on how to maximise the tax savings!
With the downturn of economy, increase in consumables prices higher than the increase in increments, market softening for most businesses, implementation of GST with high penalties of offences if caught b it due to error or fraudulent reporting, and many many more reasons… everyone is trying very hard to save money by maximising income tax deductions through tax reliefs and tax rebates including myself!!
After purchasing and paying for everything in the last year expecting to get some of the reliefs can be claimed for this year too… bad news as some of the expenses are no more claimable in YA2015… It’s like “while stock lasts” feeling…
Let me run through the few tax reliefs which are not available for claim in YA2015:
1) Tax Relief for Broadband Discontinued in YA2015
with effect from year of assessment 2010 – 2012
Come the month of April, many Malaysians scramble to file for their personal income tax and claim for tax rebates. Seasoned pros treat it like a yearly routine to be done and dusted in a jiffy, while first-timers find the process daunting, especially when there are financial, technical and even legal considerations involved.
With the Goods and Services Tax just around the corner, many are putting in the extra effort to seek ways to maximise their income tax deductions through various reliefs and rebates available. The bad news is, some of you may quickly discover that some items that were previously eligible for tax relief purposes are no longer available.
Here are a list of items that you wish you could still claim for tax relief:
1) Your broadband service
What do gaming fan boys and Instagram aficionados have in common? Both will not be getting any tax relief for their broadband subscription this year, that’s what!
Up till the year 2012, tax payers could lay claim to up to RM500 for broadband subscription under a personal name. It can be in the form of fixed-line service provider such as TM Streamyx or wireless internet broadband packages offered by Maxis, Celcom or DIGI.
While you won’t be getting any relief for your broadband subscription this time around, you can still stretch your Ringgit further by choosing a broadband package that is best suited for your browsing habits and lifestyle needs.
2) Your new iPad
There’s good and bad news for gadget geeks.
The good: Purchase of personal computers and laptops (including MacBooks) continue to be tax claimable for up to RM3,000 (but only once in every three years).
And the bad: From assessment year 2013, the Inland Revenue Board of Malaysia (LHDN) has declared that tablet devices, which include Apple’s iPads, Samsung Tab and Google’s Nexus 9, are not included in the list of tax deductible items.
So tablet owners will not be getting tax relief for their purchases this year. However, you still stand to enjoy some pretty cool privileges the next time you plan to purchase a tablet by using a credit card that rewards you for your spending.
For example, CIMB Bank cardholders get to enjoy 10% discount on weekends when they make a purchase on Lazada. Meanwhile, the Standard Chartered CashBack Gold MasterCard offers 5% cashback for shopping expenditure exceeding RM1,500 per month.
3) Your home loan interest
It has been tough for many Malaysians to afford their first home to due the escalating property prices. To make matter worse, the tax relief for interest expended for the first three years of a residential property has not been extended.
Homebuyers who signed their sales and purchase agreement between March 10, 2009 and December 31, 2010, had formerly enjoyed a tax relief of up to RM10,000 (for just one unit) every year for the first three years on the interest of their housing loan. The last claim allowed for this was for assessment year 2013.
For buyers who bought properties after 2010, they will no longer enjoy any tax relief for their property, but instead be slapped with a higher Real Property Gains Tax (RPGT) from 15% to 30% for properties disposed in the first three years.
It’s not all gloom and doom…
Tax payers may have a harder time finding ways to utilise their tax reliefs this year as compared to the years before, but they can look forward to paying less taxes in the year ahead.
For Budget 2015, the Government has reiterated its commitment to cut income taxes by between 1% and 3% for the 2015 year of assessment. This means some 300,000 individual taxpayers will no longer have to pay income tax.
Under Budget 2015, Prime Minister Datuk Seri Najib Tun Razak also announced that taxpayers with family and income of RM4,000 or less per month will not have any tax liability.
Maximum income rate has been increased from RM100,000 to RM400,000 when you file for tax next year. The current maximum tax rate of 26% has also been reduced to 24%, 24.5% and 25% for assessment year 2015. This will result in tax savings of at least 5.3% for the tax payer.
As Benjamin Franklin once said: death and taxes are the only things in life that are inevitable. Nobody enjoys tax time, but it doesn’t always have to be a dreary affair. Armed with the right information, you will be able to accomplish this yearly chore in a relatively easy and pain-free manner. Who knows, you may be getting back some cash in tax refund too!