Are you under claiming your insurance tax relief?
After all, tax planning is part of financial planning.
Digest these 2 facts
- Your EPF contribution alone would have maxed out the RM 6,000 quota for EPF & Life insurance tax relief
- 60% of Medical/Life insurance premium is claimable under medical insurance tax relief of maximum RM 3,000
So how do you know which one is which and how much is this 60%?
FYI, there are 4 types of insurance which qualify for tax relief.
1. Life
2. Education/Life
3. Medical/Life
4. Medical
The easy way to do this is to look at your annual statements. Even easier, you could register for e-Connect to view your statement online at your convenience.
After you login, you go to ….. Statement > Life > Statement of Life Assurance Premium Paid
Here’s a snapshot of my whole life policy statement with 36 Critical Illness rider. With this, it falls under the category “Medical/Life” policy.
Since you probably have maxed out on the RM 6,000 life insurance + EPF quota, you can actually take 60% of your life insurance premium here (represented by A) and fill in the quota for medical insurance tax relief of RM 3,000.
*Of course, your hospitalization (medical card) policy would still entitle you for 100% premium of the medical insurance tax relief
Unfortunately, I have submitted my income tax return form 2 weeks ago. But I’ll definitely be smarter next year.
After all, every buck saved is a buck earned.
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Hi LCF,
If i have quota left for both the below tax relief, and i have 1 more life/medical insurance, say RM500. So do i break this RM500 as below?
1. Life insurance tax relief (RM500 x 40%)
2. Medical insurance tax relief (RM500 x 60%)
Is this the correct ratio?
Thanks a lot for your advice.
Hi LCF, my insurance policy shows something like this :
Life Premiums : RMXXX
Life with Critical Illness Cover : RMXXX
Medical Critical Illness Cover : RMXXX
Total Premium RMXXX
When you said life insurance policy with critical illness rider, does it falls under the 2nd category? Or if let’s say the 2nd category amount is zero, but there are amounts under the 1st & 3rd categories, can I still use 60% of the Life Premiums amount?
Mei Fang, you can’t 🙁