How to Maximize Insurance Tax Relief in 2024

Every year when completing income tax e-filing, you must apply for insurance tax relief and other deductions. Tax deductions are allowances permitted against income tax. Every taxpayer can apply for tax deductions to reduce the amount of income tax for that year.

2 Types of Insurance You Can Apply for Tax Relief in Malaysia

If your employer makes monthly tax deductions or potongan cukai bulanan, you can fill out e-filing to reclaim overpaid income tax. One of the tax reliefs you can apply for is insurance tax relief. For the Assessment Year 2023, you can apply for tax relief for health and life insurance.

This article will provide more information on the tax relief for insurance that you can claim for the Assessment Year 2023.

1. Life Insurance/Takaful Premium

If you have life insurance, you can apply for tax relief for life insurance. Eligible life insurance premiums for tax relief include:

• Insurance purchased on your own life or your spouse’s life only;
• Insurance premiums paid for children are not included in the tax relief category;
• The insurance premiums must be paid by the taxpayer or yourself;
• Premiums related to insurance under the takaful scheme under the Takaful Act 1984 are also subject to tax relief for insurance.

Income Tax Relief for Life Insurance/Takaful

Starting from the year 2023, tax relief for family insurance or takaful includes additional voluntary contributions.

2. Education or Medical Insurance

Additionally, you can also claim tax relief for education and medical insurance. For education insurance policies, you are eligible for tax relief if:

• The education insurance policy is taken for yourself, spouse, or child;
• The policy’s beneficiary is a child;
• For takaful policies, the participant is a parent, and the policy’s benefits must be assigned to the child;
• The maturity amount for conventional policies and takaful policies must be scheduled for payment when the child is between 13 and 25 years old.

As for medical insurance policies, you qualify for tax relief if:

• Medical treatment expenses incurred due to illness, accident, or disability;
• The policy’s coverage is for 12 months or more;
• Critical illness coverage combined with life or personal accident protection allows you to claim 60 percent of the premium as a deduction.

Tax Relief for Education or Medical Insurance

For the assessment year 2023, the total allocation for tax relief for education or medical insurance is limited to only RM3,000. For medical insurance, if critical illness coverage is tied to life or personal accident protection, you are eligible to claim insurance tax relief.

You can claim a tax deduction of 60 percent of the paid premium.

Get Life Insurance and Medical Insurance to Enjoy Insurance Tax Relief in 2024

You are encouraged to obtain life and medical insurance for your protection. In addition to benefiting from insurance protection, you can maximize tax relief. This helps in reducing income tax on the insurance premiums paid.

This is indeed worthwhile as it can alleviate financial burdens and increase your savings. Remember to keep all receipts and payment statements for seven years. This is because the LHDN may request you to provide evidence of claimed tax reliefs at any time. Failure to prove tax relief claims may result in fines.

If you want to learn more about health and medical insurance and life insurance, visit our website for further information. Qoala is a preferred platform as it provides the best insurance comparison services in Malaysia.