The following are the key features in the change of the above, compared to the year of assessment 2015, based on Malaysian Budget 2016 for personal taxes of which will affect resident and non-resident tax payers in Malaysia.
Changes in Tax Rates for Resident Individuals
Tax rates for resident individuals whose chargeable income from RM600,001 to RM1,000,000 be increased 1%. For the year of assessment 2015, for the same bracket of chargeable income it was 25% and for the year of assessment 2016 it is 26%.
Tax rates for resident individuals whose chargeable income exceeds RM1,000,000 be increased by 3%. For the year of assessment 2015, for the same bracket of chargeable income it was 25% and for the year of assessment 2016 it is 28%.
Changes in Tax Rates for Non-Resident Individuals
Non-Resident individuals are charged at a fixed income tax rate of 25% in 2015. For the year of assessment 2016 it has been increased 3% to 28%.
Changes in Reliefs
Tax relief for each child below 18 years of age is increased from RM1,000 to RM2,000 from year of assessment 2016.
Tax relief for each child above the age of 18 years who is studying at local or foreign institutions of higher learning is increased from RM6,000
Tax relief for each disabled child above the age of 18 years who is studying at local or foreign institution of higher learning is increased from
RM6,000 to RM8,000.
Tax relief for individual taxpayer whose spouse has no income is increased from RM3,000 to RM4,000.
Tax relief for tax payer who provide "parental care" for their parents is given tax relief of RM1,500 for the mother and RM1,500 for the father.
The relief is subject to the condition that each parent does not have income exceeding RM2,000 a month and must be 60 years and above (From year
of assessment 2016 until year of assessment 2020).
Tax relief on course fees for mainly law, accounting, islamic financing, technical, vocational and etc. be increased from RM5,000 to RM7,000 per
Tax relief of up to a maximum of RM250 per year is eligible for employees who contributes to SOCSO.
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