First – As an employee, if you are suffering cash flow problem currently, you can choose to contribute lesser to your EPF. Before year 2021, the minimum employee EPF allocation is 11%, this was meant to end in 2021 but the government has extended the period to June 2022. The 9% minimum contribution is the default mode. Employees who wish to maintain the statutory contribution rate at 11% are required to apply via Borang KWSP 17A.
Second – SST exemption for cars will be extended to 30 June 2022. This means buyers of locally-assembled (CKD) cars will be exempted from paying the 10 percent sales tax upon purchase. However, do note that other taxes like excise and import duties still apply. This SST exemption does not apply to commercial vehicles like commercial vans and pick-up trucks. If you need a passenger car, this is the right time to buy a new car, it will be cheaper. The saving of 10% sales tax is equivalent to about 2 to 4% of the total car price. Using the example of Honda Civic, you shall save roughly about RM 4 to 5K.
Third – The real property gain tax is now removed for house sales from 6th year onwards. Real Property Gains Tax (RPGT) is chargeable on the profit gained from selling a property. Prior to this budget, individuals and companies will be charged 5% and 10% respectively for RPGT on sale of house exceeding RM 200,000 and more than 5 years. Now, you get more net return with the tax removal. So, if you want to have more gain from property investment, you need to plan to hold your properties for at least 5 years from the purchase date.
Fourth – RM 2500 is given for the income tax relief on purchase computer, handphones and tablets until end of 2022. You can take the chance to use this relief to buy these for children, yourself or your spouse. Take note that this is not for business use.
Fifth – Special individual income tax relief of RM 1,000 is given for domestic tourism expenses. This would be extended until the year of assessment 2022.
Sixth – There will be an excise duty imposed on nicotine-based gel or liquid products for vapes and electronic cigarettes, The government is also introducing excise duty on premix drinks containing sugar. For example, chocolate, malt, coffee and tea-based premix drink. This means these drinks will now cost more. You may consider spending less on these items. A stronger reason for you to promote healthy lifestyle.
Seventh – If you are still having PTPTN loan, it is a good news that you can get 10 – 15% discount. The discount comes into effect from 1st November 2021 until 30 April 2022. If you wish to fully settle the PTPTN loan, you will get 15% discount. 12% discount will be given to those who wish to settle at least 50% of their loan balance in one payment. The 10 per cent discount is for those who wish to repay their PTPTN loan by scheduled salary or debit deduction.
Eighth – the government has increased the limit of the income tax relief for up-skilling and self-enhancement course fee from RM 1,000 to RM 2,000 to encourage Malaysians to pursue training programmes and acquire new knowledge. This limit will be extended to year of assessment 2023.
In addition, those who undertake courses with any professional bodies will be eligible for a tax relief of up to RM7,000. Approved courses include professional courses in accounting, finance and ESG-related. ESG stands for Environmental, Social, and (Corporate) Governance.
The above are the 8 things individuals should take note to enhance their personal finance.
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