PSA: Life Insurance tax relief (RM3,000) is expanded to include voluntary EPF contribution for YA2023

[jonnyalliance]

A lot of people don't seem to know about this and thought I'd share as the year is coming to a close. In Budget 2023, the scope of the Life Insurance category was expanded to include voluntary contribution to the EPF (i.e. self contribution), capped at the same overall limit of RM3,000.

This is very useful for those who are not yet maxing out their Life Insurance tax relief. This is effective YA 2023 (i.e. when you file for this year's tax next year).

Source: https://www.kwsp.gov.my/en/web/guest/w/budget-2023-seeks-to-improve-social-wellbeing-infrastructure

Expanding the scope of annual tax relief for life insurance premiums or life takaful contributions to cover voluntary contributions to the EPF of up to RM3,000.

 

[ralphalvarezz]

@jonnyalliance Means if I put 3k into epf (not employer and mandatory deduction) I can claim tax relief under the life insurance category?

 

[jonnyalliance]

@ralphalvarezz Yes, provided you don't already have any Life Insurance that you'd like to claim under this relief category.

If you have RM1k life insurance you want to claim, then just self-contribute RM2k to EPF to max out the tax relief.

 

[jponder37334]

@jonnyalliance Wait OP, meaning if I already self-contribute EPF RM4k for the maximum tax relief, I can contribute another RM3k at the life insurance tax relief category?
Total RM7k?

 

[jonnyalliance]

@jponder37334 Yes, provided you don't have any life insurance.

 

[jponder37334]

@jonnyalliance Don't have any :')
Ok maybe I will do this. But before 31st Dec 2023 right?

 

[anonymousrain]

@jonnyalliance just be frank...why contribute to EPF. I'd trust the government as far as i can throw them. You can trust other government, but with malaysia, why bother. Furthermore, you can't take out the money. its stuck till 55.

I'd have to question motive as well...we have an aging demographic here in malaysia. Does EPF need funds?

 

[gabrielod]

@anonymousrain Dude, check the median age of Malaysia and then compare that against other developing/ developed countries. Also, research about what other countries do when their population age - and you will learn that Malaysia is far from that, even in many years to come.

If your age is not too far below the median age, you are completely fine. For next generation, no one will know though.

 

[anonymousrain]

@gabrielod

Budget 2023, announced by YAB Prime Minister Dato’ Seri Anwar Ibrahim earlier today, takes into account the demographic changes resulting in an increasing number of ageing population.

Actually just read between the lines. It's in the press statement. They claim its so Malaysians need to save blah blah blah, but Malaysia has a demographic problem its well documented. Lets talk facts:

• Contract work, gig work means less money going to EPF.
• More older people means more money in the epf needed.
  

Maybe its premature as you say, but i'm taking a more robust strategy. Less money in government is more money in my pocket, including EPF. I'd put it in an etf or something. Give me stuff that's real, not pie in the sky.

 

[gabrielod]

@anonymousrain Of course the population is aging. Oh my goodness - as if the downvotes you received had not been embarrassing enough.

Have you even googled the median age of Malaysians - 30.8 years! What does that mean? The world median age is 30.5 years. What about other countries - US (38.1), Singapore (41.8), China (39.0), Indonesia (29.0), UK (40.7), India (28.2) - I am listing selected developing and developed countries, just for your reference.

Yes, more older population means more money needed, of course that is true. But you have to look at who are reimbursing the money. When you have enough working population, which is reflected in the median age, you don't have to over-worry - that is all I am saying. And what about developed countries with high median age - what are they doing, have you even researched as I suggested? No, you did no, you only want to argue. They adjust their immigration policy, simple! Oh my goodness... The side effects of a more liberal immigration policy, that's another topic, please don't stretch that into this for God's sake.

Also, your money stuck at 55 is, largely, and partially, correct (Before your ego explodes, note, I am not saying you were wrong!). When your investment reaches 1 million ringgit, you can withdraw the excess (i.e. anything beyond the 1 million ringgit).

Sure, maintaining liquidity is important. By all means, do your own investment strategy. I am also a believer in investing into ETFs. I think that's a good reason. But when you claimed that EPF is not safe bla, bla, bla, dude, talking is easy, show me facts and data.

If one (again, I'm not saying you! Don't burst your ego please) claims say EPF is not safe, then one is also saying that the entire bluechips in EPF are not safe. This is why people say if EPF goes busted, damn, Kuala Lumpur, we got problem!

You want to keep arguing, I have all the time man, you will regret. Or you want to go back to your family business and do your stuff.

 

[doots]

@jonnyalliance I wasn't aware of this too. Thanks for sharing!

 

[gareb]

@jonnyalliance You're a lifesaver OP

 

[lumenlight]

@jonnyalliance thank you sir

 

[vinhhali]

@jonnyalliance The most useful thread of year 2023. Thanks!

 

[lyy150a]

@jonnyalliance This is nice. Now i need to search how to make that epf self contribution. Never done it before.

 

[ashleebf]

@jonnyalliance Quote me if I'm wrong, to fully utilize this, 4k from employer, and 3k self contribution should entitle me to claim 7k for epf in total?