DOUBLE deduction for remuneration of employees

DOUBLE deduction for remuneration of employees

Who is eligible?

1.    Senior citizens (≥ 60 years old)

2.    Ex-convicts

3.    Parolees

4.    Supervised person

5.    Ex-drug dependant

Condition

• Full time basis
• Monthly remuneration ≤ RM4,000
• Employer ≠ employee
• Employer ≠ relative of the employee

Who is relative

• Spouse
• Parent, including step parent or parent in law
• Child, including step child or child adopted (by law)
• Brother or sister, including step brother or step sister
• Grandparent or grandchild, including step grandparent or step grandchild

Year of assessment

• YA 2019 – YA 2020    PU (A) 164/2019
• YA 2021 – YA 2025    Budget 2021 (NOT yet Gazetted)
  

e-CTIM 45/2020 dated 16 June 2020

1.    Remuneration means any wages, salary, fee, leave pay, commission, allowance and etc

Example: Monthly salary 3,800 + allowance 500 = exceed 4,000 (no double deduction)

 2.    No apportionment required even though the employee reach 60 years old in the middle of the year

Can claim double deduction for the whole year

How about one off bonus?

Salary from Jan to Dec 2020                    3,800x12 months = 45,600

Bonus in Dec 2020 = 3,800

All conditions are satisfied

• Single deduction = 49,400 (45,600+3,800)
• Additional deduction = 48,000 (12x4,000) (45,600+2,400)

e-CTIM 84/2020 dated 2 Dec 2020

• Employer must have business income (S4(a)) during the YA
• If the employee is relative of director or shareholder, the Company will not be eligible for double deduction.