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3 Saving Plans Which Allows For Tax Deduction up to RM15,000
Based on your income this year, how much personal income tax do you need to pay when you file your taxes next year?
In fact, the government provides taxpayers with many deductible items every year, such as purchasing books, computers, and sports equipment, paying education funds for children, and so on.
In order to reduce the personal income tax, many people spend a lot of deductible items, but in fact, in order to save tens or hundreds of dollars in taxes, it seems that they spend thousands of dollars in taxes.
And here, you can get tax deductions without spending money by saving money, and you can also enjoy other benefits!
1. Parents can deposit SSPN-i for their children
Parents can set up a national education savings plan (SSPN-i or SSPN-i Plus) for their children, and then only need to deposit for the children’s account, and the deposited money will be tax-deductible. For example, if you deposit RM8000 in your child’s account this year, you will be able to deduct up to RM8000 from your personal income tax, which is very cost-effective. It may make you need to pay the tax instead of paying income tax! And the deposits deposited into this SSPN account can also earn interest!
Benefit 1: You can get up to RM8000 tax deduction (the balance of the money you put in this year minus the money you took out)
Benefit 2: You can get a good interest on deposit! For example, the dividend declared in 2020 is 4%, and the fixed deposit is still high
Benefit 3: If you choose SSPN-i, you can apply for withdrawal at any time if you need the money
The public can choose SSPN-i or SSPN i-plus. If you are interested in opening SSPN-i Plus.
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2. Put money in a private retirement fund plan (PRS)
PRS is an investment-based retirement saving accumulation plan closely supervised by the government, and the Malaysian Securities Regulatory Commission is responsible for overseeing the entire plan structure so that people in the country can enjoy a better life in their old age.
Benefit 1: Get tax deductions up to RM3,000
Benefit 2: If you choose a good trust fund/investment, you can still get a good return.
In any case, this private retirement fund plan can choose different funds or investment methods according to your situation, and the return is not necessary, and it may even face losses.
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3. Voluntary payment of provident fund EPF i-Saraan
The working people have their employers and bosses to help pay the EPF provident fund every month, but for those self-employed who do not have a boss, they cannot enjoy the benefits of the provident fund. Therefore, the Malaysian Provident Fund Board has launched a voluntary savings plan (Skim Simpanan Persaraan 1Malaysia), which has now been renamed i-Saraan. Those who are self-employed can pay their own provident fund (there is no limit, as much as you want), and the amount deposited in the provident fund can be used for a tax deduction. In addition, if you join the EPF i-Saraan program, the government will help you subsidize up to 15%!
Benefit 1: You can get up to 4000 tax deductions (in the tax deduction items of the provident fund)
Benefit 2: The government will assist members to pay 15% of the annual savings (up to RM250)
Benefit 3: You can enjoy the benefits available to EPF members, such as an annual dividend rate of about 5% to 6%
In any case, after depositing money into the provident fund, it must be in accordance with the provisions of the provident fund, for example, after retirement at the age of 55, the full deposit can be made.
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The above are three savings plans that allow you to get tax deductions. If you don’t want to pay so much personal income tax, you can consider using the above plans to reduce or even exempt you from paying income tax!