Tax allowance for disabled children

  • Business
  • Saturday, 26 Apr 2008

Today’s part two of Deloitte KassimChan's list of frequently asked questions gives more scenarios on claims deduction to reduce taxable income. The first part appeared yesterday.

Are there any deductions for the care of a handicapped child?

To claim a deduction for a handicapped child, your child needs to be certified as a disabled person by the Social Welfare Department. The deductions available are:

Child relief of RM5,000 (for an unmarried child who is physically or mentally disabled regardless of age and whether or not the child is receiving full time instruction);

An additional relief of RM4,000 for each disabled child over 18 years if the child is receiving full-time instruction at a university, college or other establishment of higher education, or is serving under articles or indentures with a view to qualifying in a trade or profession, or if the child who is receiving full-time instruction outside Malaysia, it is in respect of an award of degree (including a degree at Masters or Doctorate level) or the equivalent of a degree.

In all cases, the instruction and educational establishment shall be approved by the relevant government authority.

Deduction of up to RM5,000 for the basic supporting equipment expenses. The supporting equipment includes haemodialysis machine, wheel chair, artificial leg and hearing aids but excludes optional lenses and spectacles.

The birth of my daughter was induced and she was born just before midnight on Dec 31, 2007 as my parents-in-law were going overseas the next day and wanted to see their first grandchild before leaving. Can I claim a deduction in respect of this child in 2007?

Yes, you can claim for a deduction of RM1,000 in respect of your daughter as she was born in 2007.

My employer deducted around RM3,000 from me and contributed the amount to the EPF. I understand that the maximum deduction for contribution to EPF and life insurance is RM6,000. If I buy life insurance for my wife, can I claim the deduction?

Yes, you can claim a deduction of up to RM6,000 for the contribution towards EPF and life insurance premiums if you elect for combined assessment. The life insurance policies can either be on the life of yourself or your spouse.

Insurance premiums on education or medical policies for yourself, your wife or your child will entitle you to an additional deduction of up to RM3,000.

I bought a personal digital assistant (PDA) at RM4,000. How much rebate I can claim?

There are deductions available on computers. Personal computer (PC) includes laptops and desktops and does not include palmtops, PDAs and its equivalents in accordance to Public Ruling 2/2005.

Effective 2007, the incentive for the purchase of personal computer is a tax deduction instead of a tax rebate (treated as if it is payment of tax) in previous years. The maximum deduction is RM3,000 but is only given once every three years. The receipt is required as evidence of the purchase.

Any other ways of reducing my taxes?

There are deductions for donations and gifts to approved institutions. (See appendix for types of donations that qualify for deduction)

The comments above are intended as a general guide and do not represent an opinion or advice applicable to your situation. We recommend that you seek a tax advisor/consultant for your own personal tax matters.

> Ang Weina is executive director and Shirley Sia is assistant manager at Deloitte.

Related story:Part One:Claims deduction to lower taxable income

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