Introduction
Filing your taxes doesn’t have to be a burden if you know how to navigate the latest incentives. The Inland Revenue Board of Malaysia (LHDN) recently released Public Ruling (PR) No. 7/2025, which updates the framework for LHDN Personal Tax Relief 2025. This ruling is essential for resident individuals looking to claim gifts, contributions, and personal deductions effectively.
As a professional tax firm, we have analyzed this 65-page document to highlight the most valuable claims you can make this year. From medical expenses and breastfeeding equipment to additional sports reliefs, here is how you can significantly reduce your chargeable income.
Gifts and Contributions (Section 44)
Before you calculate your reliefs, you can deduct qualifying gifts from your aggregate income. This is often the first step in lowering your tax bracket.
Cash Donations and the 10% Cap
Donations made to the Government, State Governments, or local authorities are fully deductible with no limit. However, cash gifts to “Approved Institutions” or organizations are restricted to 10% of your aggregate income. Always verify the approval status of the organization on the official LHDN portal to ensure your claim is valid.
Special Contributions for Public Interest
You can also claim deductions for unique contributions, such as:
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Library Facilities: Up to RM20,000 for public or school libraries.
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Medical Equipment: Up to RM20,000 for any gift of medical equipment to approved healthcare facilities.
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Cultural Gifts: Artifacts, manuscripts, or paintings donated to the National Museum or Art Gallery, based on their determined value.
Medical and Parental Reliefs
The LHDN Personal Tax Relief 2025 updates place a heavy emphasis on health and family care, providing some of the highest deduction limits.
1. Medical Care for Parents and Grandparents
You can claim up to RM8,000 for medical treatment, dental treatment, and carer expenses for your parents or grandparents. This includes care at nursing homes or home-based care certified by registered medical practitioners. This relief is vital for families managing the costs of an aging population.
2. Serious Diseases and Mental Health
Taxpayers can claim up to RM10,000 for medical expenses related to serious diseases like cancer or leukemia, and fertility treatments for married couples. This limit also covers mental health consultations and treatments by registered psychiatrists or clinical psychologists. Within this RM10,000 limit, a sub-cap of RM1,000 applies to vaccinations (e.g., Influenza, HPV) and dental examinations.
Lifestyle and Education Reliefs
Lifestyle reliefs reward your personal growth and physical well-being.
1. Lifestyle Relief (Max RM2,500)
Under the LHDN Personal Tax Relief 2025, you can claim up to RM2,500 for items like books, personal computers, smartphones, and internet subscriptions for personal use.
2. Additional Relief for Sports Activities (Max RM1,000)
Starting from YA 2024, there is an additional deduction of up to RM1,000 specifically for sports. This is separate from the standard lifestyle relief and covers.
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Sports Equipment: Purchase of equipment for activities defined under the Sports Development Act 1997 (excluding motorised bicycles).
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Facility Fees: Rental or entrance fees for sports facilities.
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Competition Fees: Registration fees for licensed sports competitions.
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Gym and Training: Gym membership fees and sports training provided by registered associations or clubs.
3. Education Fees for Self (Max RM7,000)
If you are pursuing a degree or professional certification, you can claim up to RM7,000 in fees. This relief encourages lifelong learning and upskilling.
Specialized Reliefs for Parents and Future Savings
1. Purchase of Breastfeeding Equipment (Max RM1,000)
To support working mothers, female resident individuals can claim up to RM1,000 for breastfeeding equipment. This deduction is allowed once every 2 years of assessment for a child aged 2 years and below. Qualifying items include breast pumps, ice packs, milk storage bags, and cooler sets. Please note that in combined assessments, this can only be claimed if the assessment is in the wife’s name.
2. Net Savings in SSPN
To encourage education savings, net savings in the National Education Savings Scheme (SSPN) provide a deduction of up to RM8,000. This is effective for the LHDN Personal Tax Relief 2025 through to YA 2027.
3. Child Care and Kindergarten Fees
Parents can claim up to RM3,000 for fees paid to registered childcare centers or kindergartens for children aged 6 and below. This relief can be claimed by either parent who incurred the expense, but not both for the same child.
Key Takeaways
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Resident Only: These reliefs apply only to resident individuals as defined by the Act.
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Breastfeeding & Sports: Take full advantage of the specialized RM1,000 caps for breastfeeding (every 2 years) and sports (annual).
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Keep Receipts: LHDN requires you to keep all supporting documents for 7 years.
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Verify Limits: Many reliefs, like medical and lifestyle, have specific sub-caps that must be monitored.
Frequently Asked Questions (FAQ)
Q1: Can I claim the lifestyle relief for a smartphone I bought for my sibling?
No. The purchase must be for yourself, your spouse, or your child to qualify.
Q2: Can a father claim the breastfeeding equipment relief?
No. This specific deduction is only available to female resident individuals.
Q3: Are gym memberships included in the RM2,500 lifestyle relief?
While gym fees can be part of lifestyle, they are better claimed under the additional RM1,000 sports relief to maximize your total deductions.
You may refer to Public Ruling (PR) No. 7/2025, for more details.
ANC Group – Your Personal Tax Advisor
Tax consulting is the core service of ANC Group. Our tax professionals provide clients with comprehensive tax support and guidance. We offer tax consulting and compliance services for expatriates, entrepreneurs, and listed and non-listed companies.
Our tax consulting services include business tax, transaction tax, personal tax, and corporate income tax. We don’t just guide you in interpreting and applying complicated taxation rules, but to explore new opportunities and business trends.
ANC Group keep you abreast with Malaysia tax updates and any changes in the local regulations.
We work closely with industry specialists, authorities, and associated professionals within ANC Group to provide the best-in-class integrated tax planning solutions. ANC specialists coordinate the accounting and taxation services to bring your business to success.
If you need professional tax advisory services regarding the Malaysia Income Tax Act 1967, our team is ready to assist you. Contact us here to discuss how we can support your business.
