For those with gross salary of RM10k and above is facing big challenge to reduce unnecessary tax exposure because they are sitting at the highest tax bracket of 26% (which is 1% higher than big Corporation like Sime Darby and Amway).
It is extremely easy to touch 26% as it imposed on chargeable income of RM100,000 and above.
For income derived from employment (salary), the choice and option for effective tax planning are rather minimum, in summary:
1) Reducing further income which is taxable (e.g. Rental income/part time job), try to get non-taxable income (dividend from share and distribution from REITs which taxed at source for 10% only or capital gain from investment).
2) Increase claimable tax relief (however, you need to spend to save, doesn't sound too right as well)
3) Negotiate with employer for non-taxable benefits in lieu of taxable income, e.g.
- higher EPF contribution by employer (up to 19% from 12%) and lower your gross salary;
- get your car paid by company (thus may get lower gross salary)
You may also consider the new and controversial tax relief - PRS or Deferred Annuity - max RM3,000 per year of assessment or max saving of RM780 per year.
For those have kids, Deposit with PTPTN sound good, max tax relief RM6,000 from YA2012 but you must have confident that your money will be returned to you with good return.
* It is our duty to pay tax, we just don't need to pay unnecessary tax. We do not agree on tax evasion, which is punishable under the law.
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