Yes, it is possible to do so next year in 2014. It is a combination of a few factors – Budget 2014, your age and Private Retirement Scheme (PRS). “So simple?” you asked? It is, and I am surprised why nobody puts this into perspective, and this very item announced in Budget 2014 is a thing overlooked by many.
First, for this to be applicable, you have to be between 20 to 30 years old. That would make you be eligible for this first item tabled in the recent Budget 2014.
Second, if you are a working adult under age 30, it is likely that your income bracket is 11%, with chargeable income in the range RM 35,001 to RM 50,000.
And to put it simple, for every tax relief that you declare, you will save 11% of that tax relief amount.
Source: NBC Blog
The third variable in the equation is the return of PRS funds. Taken from PPA site, now if you happen to invest in Hwang AIIMAN PRS Shariah Growth Fund since the beginning of 2013, you would be sitting on a handsome 18+% return as of Nov 2013.
Source: PPA website
Therefore, if you just plunk in RM 1,000 in 2014, you will get the one time off “reward” – RM 500 which is 50% return of investment of your initial capital.
For the 11% tax, you save RM 110. And lastly, 18% gain of RM 1,000 (assuming the return is sustainable for 2014, although that is unlikely) is RM 180.
So, RM (500 + 110 + 180) = RM 790.
Now, do you agree now it is up to 79% return of investment? Even of a conservative perspective, you’ll be getting a minimum of 61+% a year.
Youth, take advantage of this! I’ll a bit too old to qualify for the RM 500 🙂