6 ways Malaysians can pay less income tax for 2025

If you’ve clicked on this article, the good news is you may now be in a better place and earning more cha ching than before. The bad news is now, you’re probably subject to income taxes.

It’s one of those things that hurt adults once a month upon finding income tax deductions on their payslips, but did you know you can make it less painful through tax reliefs?

Every year, the gomen will announce stuff in the national budget that you can spend money on first and claim back from your income tax when filing it next year, and if you’re aware of these things, you can make a killing. So what are they? Here’s a handy guide.

1. Your health and medical expenses

So what can you claim under health and medical expenditures? Almost everything related to it. Hospital bills from a serious disease? Can claim. Got an ultrasound? Can claim. Taking out that stubborn wisdom tooth? Can claim also!

In fact, this category includes mental health consultations for your family, health checkups, and even medical devices. So if you’re buying Covid test kits or even a blood sugar meter, be sure to keep the receipts for those.

However, there’s a limit to how much you can claim. Barring expenditures related to serious diseases and fertility treatments, each category has a limit of RM1,000 only, so just be aware of that. Peek here (page 289) for a closer look.

Interestingly, you can also claim up to RM6,000 for detection, early intervention and treatment of learning and developmental disorders for your kids. These includes autism, ADHD, Down’s syndrome, and the like.

2. Expenses from supporting your family

These sandwich generation days, many of us not only have to support our kids, but also our parents (and even grandparents in some cases). If this sounds like you, there are some expenditures you can claim.

First up, you can claim up to RM8,000 for your parents’ medical needs. This includes hospital and clinic bills, dental treatments (not including cosmetic treatments), full medical checkups, and vaccination, although that last one can claim up to RM1,000 only.

Other than their medical bills, this RM8,000 deduction can also include expenses in taking care of them. So whether you’re hiring a nurse to care for them at home, or sending them to an old folks’ home, you can get back some of the money from that by claiming it under this category.

Speaking of letting someone else take care of your family, there’s also an additional RM3,000 you can claim if you get an allowance from your employer to send your kids to a daycare center. Starting this year, this applies to care centers for old people as well, so if your boss gave allowance to care for ah ma and ah pa, can claim under this as well.

If you want to claim more for your childcare, consider sending them to a TASKA or a TADIKA: up to RM3,000 can be claimed for fees related to education at

• a TASKA registered with the Welfare Department, or
• a TADIKA registered with the Education Ministry.

Bear in mind that only either the mom or the dad can claim this from their taxes, not both.

3. For disabled persons or OKUs

If you’re an OKU, the silver lining is you’ll get a RM9,000 deduction for yourself. If you’re registered with the Welfare Department, you’ll get another RM7,000 deduction on top of that, for a whopping RM16,000 deduction.

Essentially, unless you’re some billionaire, as long as you file your claims you probably won’t need to pay income taxes.

But what if you’re not the OKU, but someone in your care is? You’ll still get deductions! If your partner is disabled, you can get back RM6,000, and if it’s your child, you can get back RM8,000. But only if your disabled child is not yet married la.

4. For first time home buyers

We know house prices can be insane these days, but if you’ve been saving up to finally buy one, now’s the time! To encourage house ownership, you can now get relief for the interest on your housing loan.

Depending on the price of the property you’re eyeing, you can claim back up to

• RM7,000 for houses below RM500k
• RM5,000 for houses between RM500k-RM750k

The catch is that you have to either be a Malaysian or a permanent resident, and it’s only for strata houses like flats, apartments and condos: no landed houses. Another catch is you can’t rent it out.

You can only claim under this category if your hire-purchase agreement is completed between 1 January 2025 and 31 December 2027. If the loan is under two names, both names can claim according to their portion.

Most importantly, this deduction can be claimed for three years back-to-back after you’ve started payments, so don’t forget to claim for next year and the year after as well.

5. For those with SSPN, insurance, and private retirement schemes

This part is for those saving a nest egg for the future, either for your children’s educations, your own retirement, or through insurance.

If you have savings in the Skim Simpanan Pendidikan Nasional (SSPN), you can get up to RM8,000 deductions per year. This relief is available until 2027, but only one parent can claim it.

Even if you do take out the money sometime this year, you can still claim this relief as long as the reason for withdrawal is for education. So if you take out some to pay university fees, the relief amount is can be calculated based on the savings before the withdrawal for the year.

For those contributing to a Private Retirement Scheme (PRS) or have deferred annuities, you can claim up to RM3,000 for those. This relief is available until 2030.

However, if you take out this money before you reach 55 for non-essential reasons, you’ll get taxed 8% of the amount you withdraw. So unless you’re withdrawing for reasons like getting a permanent disability, leaving Malaysia for good, buying a house, or for medical reasons, among other things, best to leave the money in there.

Finally, if you get education or medical insurance either for yourself, your partner, or your kids, you can claim up to RM4,000 for the premium you paid.

6. For those purchasing a composting machine for food waste

Simply put, this is for the purchase of a machine that turns your food waste into compost. Great for those living in flats, apartments, or condos who can’t be bothered to go all the way down the building just to throw out last night’s leftovers.

Besides saving your time and reducing the waste that goes to our landfills, you can also get a RM2,500 relief for the purchase. However, you can only claim for this category once every three years.

Whichever relief you’re aiming for this year…

Don’t forget to keep your receipts!

Filing for claims and getting some of your hard-earned money back is nice and all, but be sure to keep every single receipt in a nice file just in case the LHDN comes a-knocking. You’ll need the receipts to last at least 7 years after filing the claims, after all.

To read further on things you can claim this year, check out the Budget speech (starting page 288).