Monthly Tax Deduction (MTD) 2022
Effective Date: From year of assessment 2022
Amendment To Specification For Monthly Tax Deduction (MTD) Calculations Using Computerised Calculation For 2022
| P (RM) |
M (RM) |
R (%) |
B Category 1 & 3 (RM) |
B Category 2 (RM) |
|---|---|---|---|---|
| 5,001 - 20,000 | 5,000 | 1 | -400 | -800 |
| 20,001 - 35,000 | 20,000 | 3 | -250 | -650 |
| 35,001 - 50,000 | 35,000 | 8 | 600 | 600 |
| 50,001 - 70,000 | 50,000 | 13 | 1,800 | 1,800 |
| 70,001 - 100,000 | 70,000 | 21 | 4,400 | 4,400 |
| 100,001 - 250,000 | 100,000 | 24 | 10,700 | 10,700 |
| 250,001 - 400,000 | 250,000 | 24.5 | 46,700 | 46,700 |
| 400,001 - 600,000 | 400,000 | 25 | 83,450 | 83,450 |
| 600,001 - 1,000,000 | 600,000 | 26 | 133,450 | 133,450 |
| 1,000,001 - 2,000,000 | 1,000,000 | 28 | 237,450 | 237,450 |
| Exceeding 2,000,000 | 2,000,000 | 30 | 517,450 | 517,450 |
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Expansion of Tax Relief on Medical Expenses
Current Treatment
Income tax relief of up to RM8,000 can be claimed on medical treatment expenses for serious diseases incurred for self, spouse and child. Qualifying Expenses includes up to RM1,000 for full medical examination and up to RM1,000 for cost of vaccination.
Proposal
It is proposed that the scope of the relief of full medical examination expenses includes:
i. COVID-19 detection test fee:
a. tests performed at a clinic or hospital
b. purchase of self -test kits
ii. Mental health examinations or consultations -
Increase And Expansion of Tax Relief On Socso Contributions
Current Treatment
Income tax relief of up to RM250 can be can be claimed on SOCSO contributions.
Proposal
It is proposed that the SOCSO contributions limit to be increased from RM250 to RM350.The scope of tax relief for SOCSO contributions be expanded to cover employee contributions through the Employment Insurance Scheme (EIS).
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Extension Of Tax Relief For Child Care Fees Paid To A Registered Child Care Centres / Kindergartens For A Child Aged 6 Years And Below
Current Treatment
The current provision allows tax relief for fees paid by individuals who send children up to 6 years of age to an orphanage or kindergarten registered with the Department of Social Welfare or the Ministry of Education Malaysia. This relief can be claimed by one of the parents of the child up to RM3,000. This relief is only applicable for the years of assessment 2020 and 2021
Proposal
It is proposed that this tax relief be extended until the year of assessment 2023.
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Extension of Tax Relief For Domestic Tourism Expenditure
Current Treatment
The current provision allows tax relief for individual residents limited to RM1,000 for the amount spent or deemed to be spent on domestic travel expenses, namely accommodation fees at accommodation premises registered with the Tourism Commissioner under the Tourism Industry Act 1992 (Act 182) and entrance fees to attractions. tourists. Eligible expenses for the purpose of deduction claims by resident individuals in a year of assessment shall be incurred on or after 1.3.2020 to 31.12.2021.
Proposal
It is proposed that the scope of the relief domestic tourism expenses includes the purchase of local tourism packages through licensed travel agents registered with the Tourism Commissioner and this tax relief be extended until the year of assessment 2022.
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Extension Of Tax Relief For Additonal Lifestyle - Purchase of Mobile Phones, Computers and Tablets
Current Treatment
The current provision allows tax releif for additional deductions to existing lifestyle relief where an additional relief limit of RM2,500 is given on the purchase of mobile phones, computers and tablets spent or deemed to be spent by an individual for personal, spouse or child use. Purchases must be made in the period from 1 June 2020 to 31 December 2020. This special tax relief was extended until the year of assessment 2021.
Proposal
It is proposed that this tax relief be extended until the year of assessment 2022.
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Extension Of Tax Relief On Employee Provident Fund (EPF) Contributions
Current Treatment
The current provision allows tax relief approved funds such as the EPF, takaful contributions or life insurance premiums, as indicated below
- Deduction not exceeding RM3,000 on life insurance premium payment or takaful contribution;
- Deduction not exceeding RM4,000 on contributions to approved schemes (other than private retirement schemes) made by employees or self -employed persons.
For civil servants who are pensionable officers, they are eligible to claim tax relief up to RM7,000 on their takaful contributions or life insurance premium payments.
Proposal
It is proposed that the scope of tax relief for EPF contributions be expanded to voluntary contributors including pensionable civil servants.
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Extension Of Tax Relief For Deferred Annuity
Current Treatment
The current provision allows tax relief for deferred annuity premiums or contributions to private retirement Private Retirement Scheme (PRS) RM3,000 for each year of assessment. Tax relief for contributions to private retirement schemes has been extended until the year of assessment 2025 through Budget 2021. However, no extended period of relief is given on premium payments made to deferred annuities.Proposal
It is proposed that the tax relief for deferred annuity premium payments be aligned to PRS contributions and extended until the year of assessment 2025.
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