KUALA LUMPUR, Oct 18 — What will you get in tax income reliefs from Budget 2025? And what tax changes should you look out for?

Here are all the major individual income tax reliefs and exemptions from Finance Minister Datuk Seri Anwar Ibrahim’s Budget 2025 speech today:

  • Tax relief limit for education and medical insurance premiums: Increased to RM4,000.
  • Tax relief for medical expenses up to RM10,000 also covers taxpayers’ medical bill payments under co-payment insurance and takaful products.
  • Tax relief on contributions to Private Retirement Scheme (PRS) and premium payments for deferred annuities: Extend until tax assessment year 2030.
  • Tax relief on net savings in Skim Simpanan Pendidikan Nasional (SSPN) savings scheme: Extended for three more years.
  • Tax exemption on overseas income sources already taxed abroad and received by Malaysians: Currently until December 31, 2026, extended to December 31, 2036.
  • Additional tax relief for persons with disabilities: Increased to RM7,000. (If couple with disabilities, increased to RM6,000; if have unmarried child with disabilities, increased to RM8,000).

Tax exemption of up to RM3,000 for allowance on childcare: Expanded to cover senior citizens’ care (parents, grandparents).

  • Tax relief for payments for parents’ medical check-up: Expanded to include vaccination costs.
  • Tax relief for parents’ medical treatment bills: Expanded to include grandparents.
  • Tax relief for allowance on childcare: Expanded to cover senior citizens’ care (parents, grandparents).
  • Tax relief for sports equipment: Expanded to include parents.

If you are a first-time home-buyer:

  • Tax relief: i) Up to RM7,000 (for house valued below RM500,000); ii) Up to RM5,000 (houses priced RM500,000–RM750,000)
  • Tax relief claimable for three consecutive assessment years on sales and purchase agreement (SPA) from January 1, 2025 to December 31, 2027.

The government also plans to expand the sales and service tax progressively from May 1 next year, with basic food items to continue to be exempt from sales tax. But sales tax will be increased for non-essential items.

What does this mean?

  • Imported premium goods like salmon and avocado will likely cost more.

What else can you expect to get?

  • Sumbangan Tunai Rumah cash aid for eligible single individuals: RM600.
  • Monthly minimum wage: Increased from current RM1,500 to RM1,700 from February 1, 2025 (But if your employer has fewer than five workers, RM1,700 starts August 1, 2025).
  • My50 monthly pass: Continued. To benefit 180,000 Klang Valley users of Prasarana bus and rail services.
  • EPF’s i-Saraan retirement savings for informal workers/ workers without stable income: Govt's matching contribution increased from current 15 per cent to 20 per cent (max limit RM500 annually or RM5,000 lifetime).
  • Govt to pay 50 per cent of higher study fees (max RM15,000) for civil servants who served more than 15 years.

More tax; less subsidies for higher-income groups

  • New dividend tax: 2 per cent if individual gets more than RM100,000 dividend income from tax assessment year 2025 onwards (exemption if dividend from Employees Provident Fund (EPF) savings, Lembaga Tabung Angkatan Tentera (LTAT), Amanah Saham Nasional Bumiputera (ASNB), dividend income from overseas, unit trusts).
  • Sugar-sweetened drinks' excise duty: Currently 50 sen/litre. Increase by 40 sen/litre in phases starting January 1, 2025.
  • RON95 petrol subsidies: Government to continue paying for 85 per cent of Malaysians, but plans to carry out targeted RON95 petrol subsidies in mid-2025.

Anything for the youths?

Yes, in Budget 2025, among other things, government plans to:

  • Pay for motorcycle licences for 15,000 needy youths (such as secondary school students, undergraduates and youths finding jobs).
  • Flight ticket aid for 60,000 needy youths (especially from Sabah, Sarawak) to return to hometown.
  • BAS.MY transport service: Free for all students at universities, polytechnics, community colleges, matriculation students nationwide.
  • Permodalan Nasional Berhad: To give free RM50 Amanah Saham Berhad (ASB) accounts for 100,000 new tertiary students.
  • Step-up Financing: offers lower payment facility for first five years for youths wishing to own first home.