Ren Ecosystem. Pre-Announcement - FlexHRMS Statutory Upgrade 2025

Greetings from Visual Solutions (M) Sdn Bhd. We would like to inform you that as per the proposed budget 2025, LHDN has pre-announced the latest changes for MTD Tax calculation for the year 2025.

There will be changes in the flexHRMS system for the following statutory items for the year 2025 as below:

1. EXPANSION OF TAX RELIEF FOR MEDICAL TREATMENT EXPENSES
To encourage people to get health check-ups and treatments which is better, proposed the scope of existing individual income tax relief for medical treatment expenses revised as follows:

A. Exemptions for the expenses below are maintained:

serious illness on oneself, spouse or child;
fertility treatment on oneself or husband/wife;
vaccination on oneself, spouse or children is limited up to RM1,000; and
examination and dental treatment on yourself, husband/wife or children limited up to RM1,000.

B. Exemption for a full medical examination, examination or mental health consultations and limited COVID-19 detection tests up to RM1,000, expanded as follows:

full medical examination, examination or consultation mental health;
purchase of self-test kits such as COVID-19 and influenza test kits;
purchase of self-examination equipment such as glucometer, pulse oximeter, blood pressure monitor and thermometer; and
fees for disease detection tests carried out in clinics or hospital such as blood tests, ultrasounds, mammograms and pap smears.

C. Inspection release for detection, early intervention program and ongoing rehabilitation treatment for children under 18 years of age who learning disabilities such as autism, ADHD, GDD, intellectual disability, down syndrome and specific learning disabilities, increased limits relief from RM4,000 to RM6,000.

Effective Date:
From year of assessment 2025

2. EXPANSION OF TAX RELIEF LIFESTYLE FOR THE PURCHASE OF SPORTS EQUIPMENT, RENTAL/ENTRY FEES FOR SPORTS FACILITIES AND REGISTRATION FEES IN SPORTS COMPETITIONS.
The scope of individual income tax relief for sports equipment, rental/entry fees for sport facilities, registration fees in sports competitions and gym membership fees or sport training is expanded to parents;

Effective Date:
From year of assessment 2025

3. EXPANSION OF TAX RELIEF ON MEDICAL TREATMENT, SPECIAL NEEDS AND CARER EXPENSES FOR PARENTS
The scope of individual income tax relief for medical treatment, special needs and carer expenses for parents is expanded to cover grandparents. Full medical examination is expanded to include vaccination expenses.

Effective Date:
From year of assessment 2025

4. EXTENSION OF TAX RELIEF FOR CHILD CARE FEES PAID TO A REGISTERED CHILD CARE CENTRES / KINDERGARTENS FOR A CHILD AGED 6 YEARS AND BELOW
It is proposed that this tax relief to be extended until the year of assessment 2027.

Effective Date:
From year of assessment 2025 to 2027

5. EXTENSION OF TAX RELIEF ON NET DEPOSIT INTO THE SKIM SIMPANAN PENDIDIKAN NASIONAL (SSPN)
It is proposed that the individual income tax relief on annual net savings in SSPN up to RM8,000 to be extended for a period of 3 years, with additional conditions as follows :

tax relief can only be claimed by either mother or father, who make SSPN savings, with a maximum claim limit of RM8,000; and
Disbursements from the SSPN fund that aim to fund education costs to further studies are not taken into account in the calculation of net savings for the year and will not affect the amount of eligible relief.

Effective Date:
From year of assessment 2025 to 2027

6. EXTENSION OF TAX RELIEF FOR PRIVATE RETIREMENT SCHEME AND DEFERRED ANNUITY
It is proposed that the tax relief for deferred annuity premium payments and PRS contributions to be extended until the year of assessment 2030.

Effective Date:
From year of Assessment 2026 to 2030

7. INCREASE TAX RELIEF FOR EDUCATION AND MEDICAL INSURANCE
it is proposed that individual income tax relief on education insurance and medical insurance premium payments to be increased from RM3,000 to RM4,000.

Effective Date:
From year of Assessment 2025

8. EXPANSION OF TAX RELIEF FOR ELECTRIC VEHICLE (EV) CHARGING FACILITY PAYMENT EXPENSES / PURCHASE OF FOOD WASTE COMPOSTING MACHINES
It is proposed that the scope of exemption on expenses for electric vehicle charging facilities is expanded to the purchase of food waste composting machines for household use with a permanent exemption limit of RM2,500. Claims for relief for the purchase of food waste composting machines are allowed once in a 3-year assessment period.

Effective Date:
Year of Assessment 2025 and 2027

9. REINTRIDUCTION OF TAX RELIEF FOR FIRST HOME LOAN INTEREST PAYMENT
It is proposed the following tax reliefs will be introduced on interest expenses incurred by first-time home buyers:

up to RM7,000 for a home valued up to RM500,000; or
up to RM5,000 for a home valued between RM500,001 and RM750,000.

with additional conditions as follows :

the residential house is not used to generate any income;
the sale and purchase agreement must be completed from 1 January 2025 to 31 December 2027;
the amount of individual income tax relief on interest payments allowed is for 3 consecutive assessment years, starting from the first year housing loan interest is paid; and
two or more individuals are eligible to claim tax relief on housing loan interest payments for the same residential house according to the basis of interest payment division.

Effective Date:
For the sale and purchase agreement of the first residential house completed from 1 January 2025 to 31 December 2027.

10. INCREASE TAX RELIEF FOR PERSONS WITH DISABILITIES
it is proposed that tax relief for persons with disabilities will be increased to the following:

Individual relief - RM7,000
Relief for disabled spouses - RM6,000
Relief for disabled unmarried children - RM8,000

Effective Date:
From year of Assessment 2025

We will release the standard version updates after the proposed budget 2025 is approved and gazetted.