(TAX UPDATE) How to Reduce Your Personal Tax Legally Before the Year Ends (YA 2025 Personal Tax Relief Guide for Taxpayers)

(TAX UPDATE) How to Reduce Your Personal Tax Legally Before the Year Ends (YA 2025 Personal Tax Relief Guide for Taxpayers)

Introduction

Many taxpayers s only think about personal tax when the tax return is due.

By then, it is already too late to change anything.

The good news is … Malaysian tax law already provides many legal ways to reduce your personal tax. These are called tax reliefs. They are designed to support families, education, health, savings, and responsible spending.

If you plan early, you can reduce your tax legally before the year ends, instead of regretting after the year is over.

This tax article shows you how.

We summarise the key individual tax reliefs for YA 2025, explain what they mean in practice, and show how SME owners, directors, and staffs can use them properly as part of their year-end tax planning.

Key Summary on Personal Reliefs You Should Know

Below is a structured summary of the most important individual tax reliefs for YA 2025.

Personal and Family Reliefs

• Individual and dependent relatives: RM9,000
• Disabled individual: RM7,000
• Spouse / alimony to former wife: Up to RM4,000
• Disabled spouse: RM6,000

Children Reliefs

• Unmarried child below 18: RM2,000 per child
• Child 18 and above in education:
– Preparatory course: RM2,000
– Diploma and above in Malaysia: RM8,000
– Degree and above overseas (approved): RM8,000
• Disabled child: RM8,000, plus extra RM8,000 if studying and unmarried

Medical and Health Reliefs

• Serious diseases, fertility treatment, vaccination, dental: Up to RM10,000
• Medical check-up, COVID test, mental health consultation, health screening equipment: Up to RM1,000
• Parents / grandparents’ medical and carer expenses: Up to RM8,000 (medical exam capped at RM1,000)
• Child disability assessment or rehab (below 18): Up to RM6,000

Education and Self-Development

• Education fees (self): Up to RM7,000
(Law, accounting, Islamic finance, technical, vocational, scientific, Masters/PhD)
• Upskilling or self-enhancement courses: Up to RM2,000

Lifestyle and Well-Being

• Lifestyle (books, devices, internet, learning): Up to RM2,500
• Sports equipment, gym, training, competition fees: Up to RM1,000
• Breastfeeding equipment (once every 2 years): Up to RM1,000
• Childcare fees (below 6, registered centre): Up to RM3,000

Savings and Insurance

• SSPN net deposit: Up to RM8,000
• Life insurance + EPF: Up to RM7,000 (EPF max RM4,000, insurance RM3,000)
• Education and medical insurance: Up to RM4,000
• Deferred annuity / PRS: Up to RM3,000
• SOCSO contributions: Up to RM350

Special Incentives

• EV charging facilities or composting machine: Up to RM2,500
• First home loan interest:
– House ≤ RM500,000: Up to RM7,000
– RM500,001–RM750,000: Up to RM2,500

Taxpayers Implications … What You Should Do Before 31 December

Plan before paying, not after paying
Once the year ends, you cannot “create” reliefs. You can only claim what already happened.

Review what you are already spending on
Insurance, education, medical, childcare, parents’ support, devices, gym — many are already relief-eligible.

Time your contributions properly
SSPN, PRS, insurance top-ups, EPF voluntary contributions must be paid within the year.

Keep clean documentation
Receipts must show correct names, dates, and purpose. LHDN does review claims.

KTP’s View

Good tax planning is not aggressive. It is disciplined.

Most tax issues we see are not because clients cheat. They happen because clients:
• Claim late,
• Claim wrongly, or
• Do not claim at all.

We encourage SME owners to treat personal tax planning like business planning — structured, reviewed, and intentional.

If you manage your cash flow well, you can manage your tax exposure well too.

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