Update: The Ismail Sabri Government Budget is no longer applicable. Malaysia’s national budget for 2023 was re-tabled again in February 2023.
To Download Revised Budget 2023 Speech and some other related publications – https://www.ccs-co.com/post/budget-2023-malaysia-madani
Current Position
To alleviate the burden of working parents, effective from the YA 2017, a new paragraph 46(1)(r) of the ITA was introduced to provide a tax deduction to individuals on the amount expended in respect of the payment for child care fees to a child care centre or a kindergarten for a child of that individual aged six years and below.
The establishment of the child care centre must be registered with the DSW under the Child Care Centre Act 1984 [Act 308] under the Ministry of Women, Family and Community Development, while a kindergarten is subject to the Education Act 1996 [Act 550] and must be registered with the State Education Department under the Ministry of Education.
The amount of deduction allowed is limited to a maximum of RM3,000 for the years of assessment 2020 and 2021. regardless of the number of children sent to the child care centre or kindergarten.
This income tax relief is extended until the year of assessment 2023 as announced in Budget 2022.
This deduction can only be claimed by a husband or a wife and must be supported by:-
- birth document of the child, such as MyKid or birth certificate; and
- receipts of the monthly fees issued by the such child care centre or kindergarten.
Separate Assessment
Where a husband and a wife are assessed separately, the tax deduction under this paragraph can only be claimed either by the husband or the wife who incurs the expenses.
Divorced Couple
Where a husband and a wife are divorced, the tax deduction can be claimed by the former husband and the former wife provided that they both made payment for the child care fees and that child is not the same child.
Proposal
To ease parents’ financial burden in providing early education for children, it is proposed tax relief of up to RM3,000 be extended for a year.
Effective Date
For the year of assessment 2024.
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