01. Tax on Dividend Income

With effective from YA 2025, a Dividend Tax at 2% will be imposed on chargeable dividend income (i.e. after taking into account allowances and deductions) received by individual shareholders (resident individuals, non-resident individuals, and individuals who hold shares through nominees), where the annual dividend income exceeds RM100,000.

Chargeable Dividend Income are assessed as below:-

A / B x C = D

A – Dividend statutory income
B – Aggregate income
C – Chargeable income
D – Chargeable dividend income

Dividend income exempted from tax are as belows :-

a) dividend income from abroad;
b) dividend income distributed from the profits of companies that received pioneer status and reinvestment allowances;
c) dividend income paid, credited or distributed from the profits of shipping companies that is exempted from tax;
d) dividend income distributed by cooperatives;
e) dividend income declared by closed-end funds;
f) dividend income received by residents from Labuan entities; and
g) any exemption given

The proposed dividend tax will not apply to profit distributions made to contributors and depositors by :-

a) Kumpulan Wang Simpanan Pekerja (KWSP);
b) Lembaga Tabung Angkatan Tentera (LTAT);
c) Amanah Saham Nasional Bumiputera (ASNB); or
d) Any unit trusts

02. Housing Loan Interest Relief

• First residential home owner (either individually or joint owned) is granted with housing loan reliefs for 3 consecutive years (starting from 1st year the housing loan interest was paid) for sales and purchases agreement executed from 1 January 2025 until 31 December 2027, as below :-
  Residential home valued up to RM500,000 – Up to RM7,000
  Residential home valued above RM500,000 up to RM750,000 – up to RM5,000

• This is not applicable for property used to generate any income.

03. Extension of Foreign-Sourced Income Remittance Exemption Period

• The period was extended to 31 December 2036.

04. Expansion in Scope of Relief for EV Charging Facilities

• The scope of relief is expanded to include purchase of food waste composting machines for household use, allowed to be claimed once within three YA.

05. Exemption on Child Care Allowance

• Child care allowances up to RM3,000 received by employees are exempted from individual income tax.
• This has expanded to include elderly care for parents / grandparents.

06. Personal Reliefs – Disable Persons

• With effective from YA 2025, the proposed increment on personal reliefs for disable persons are as below :-
  Disable individual (additional relief for self) – increased to RM7,000
  Additional relief for disabled spouse – increased to RM6,000
  Additional relief for unmarried disabled child – increases to RM8,000

07. Contribution to Private Retirement Scheme (PRS)

• This personal reliefs extended until YA 2030.

08. Contribution to Skim Simpanan Pendidikan Nasional (SSPN)

• This personal reliefs extended until YA 2027.
• Withdrawals from SSPN fund for education costs will not be taken into account on the net contribution for the YA.

09. Medical and Education Insurance Premium

• With effective from YA 2025, this personal reliefs increased to RM4,000.

10. Nursery or Kindergarten Fees

• This personal reliefs is extended to YA 2027.

11. Sport Equipment Reliefs

• With effective from YA 2025, the scope of this personal reliefs expanded to include purchase of sport equipment and activities for parents.

12. Parents Medical Expenses

• With effective from YA 2025 :-
  a) The scope of parents medical expenses is expanded to include medical expenses for grandparents.
  b) Full medical check-up for parents / grandparents (limited to RM1,000) be expanded to include vaccination costs.

13. Medical Expenses for Self, Spouse and Child

• With effective from YA 2025:-

  a) The scope for complete medical examination is expanded to included :-
  – purchase of self-test kit, such as Covid-19 & influenza test kit
  – purchase of self-testing medical devices such as glucometer, pulse oximeter, blood pressure monitor and thermometer
  – fees for disease detection examination conducted at clinic or hospital, such as blood test, ultrasound, mammogram and pap smear.

  b) Reliefs limit of assessment and diagnosis, early intervention programme and rehabilitation treatment for children aged below 18 years with specified learning disabilities increased to RM6,000.