What are the main benefits you will get from the recent Budget 2021?

Budget 2021 was announced recently to achieve 3 goals, i.e. people’s wellbeing, business continuity and economic resilience. The main benefits for individuals are as follow: –

Tax benefits

• 1% income tax cut for those having annual income between RM 50,001 to 70,000
• Tax exemption limit increased from RM 10,000 to RM 20,000 (for each full year of service) on the compensation for loss of employment for those who lost the job due to COVID 19
• The government expand the scope of medical treatment expenses to cover vaccination expenses. The tax relief is now up to RM 1,000 for taxpayer, spouse and children.
• The tax relief limit for the medical expenses for taxpayer, spouse and children is increased from RM 6,000 to RM 8,000
• The tax relief limit for full body check-up is increased from RM 500 to RM 1,000
• The tax relief limit for the medical treatments, special needs and parental care is increased from RM 5,000 to RM 8,000
• The tax relief limit for the lifestyle is increased from RM 2,500 to RM 3,000
• The tax relief limit for PTPTN Tabung Pendidikan is increased from RM 6,000 to RM 8,000
• The tax relief limit for Private Retirement Scheme (PRS) remains the same as RM 3,000 but extended to year 2025
• The government expand the scope of tuition fee to cover up-skill courses provided by certified bodies. The tax relief is now up to RM 1,000.
• Stamp duty exemption for first home buyers up to RM 500,000 from 2021 to end of 2025

EPF

• Employees’ min EPF contribution is reduced from 11% to 9% for 12 months in 2021
• Withdrawal of EPF of RM 500 for 12 months, maximum RM 6,000 in 2021
• Purchase of life insurance, takaful protection for critical illness for self and family using EPF account 2

B40

• RM 50 voucher as financial aid to purchase Perlindungan Tenang product like Takaful and personal accident. The stamp duty for Perlindungan Tenang products with annual premium / contribution not more than RM 100 will be waived until 2025
• RM 180 telecommunication credit for internet subscription or purchase of new phone
• Targeted Loan Repayment assistance with loan moratorium extension

Bantuan Prihatin Rakyat

• Allowance of RM 1,200 (with 1 child) and RM 1,800 (with 2 or more children) given to family with household income < RM 2,500
• Allowance of RM 800 (with 1 child) and RM 1,200 (with 2 or more children) given to family with household income between RM 2,501 to RM 4,000
• Allowance of RM 500 (with 1 child) and RM 750 (with 2 or more children) given to family with household income between RM 4,001 to RM 5,000
• Allowance of RM 350 to individuals (aged 21 and above) with earning less than RM 2,500

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