Have you filed your personal income tax return ?

Recap of the changes affecting individual tax for the Year of Assessment 2018

1. Reduction of income tax rates for middle income group  

Individual income tax rates for resident individuals are reduced by 2% for the following 3 chargeable income bands:

• RM20,001 to RM35,000 – Rate from 5% to 3%
• RM35,001 to RM50,000 – Rate from 10% to 8%
• RM50,001 to RM70,000 – Rate from 16% to 14%

2. Extension of tax relief on net savings into the Skim Simpanan Pendidikan Nasional (SSPN)

The  tax relief of RM6,000 is given to a taxpayer on net savings made by the taxpayer for his / her child in the SSPN account established under the Perbadanan Tabung Pendidikan Tinggi National Act 1997 is extended for another 3 years until year of assessment 2020.

3. Tax exemption on rental income from residential homes received by Malaysian Resident individuals

50% income tax exemption is given on statutory income derived from the rental of the residential property by a landlord for the year of assessment 2018 if the following conditions are met:

1. the landlord shall be an individual citizen who resides in Malaysia and is the registered proprietor of his residential property ;
2. the monthly rental income received from each residential property does not exceed two thousand ringgit ;
3. the tenancy agreement between the landlord and the tenant which has been executed and stamped comes into effect on or after 1 January 2018 ;
4. the residential property is rented out for any period from 1 January 2018 until 31 December 2018; and
5. the landlord shall maintain a separate account for the rent received from each residential property.

“residential property” means a house, condominium unit, flat or an apartment which is built as a dwelling house.

Should you have questions about this Tax Alert, please do not hesitate to contact our Tax Team in our respective offices.