How does the mini budget announced by the DPM on 10 Mar 2009 affect us as salaried employees ? Basically, not much.
There are only 2 relevant issues as far as personal tax is concerned.
- Tax exemptions for retrenchment benefits
Under the present law, if you are retrenched and receives retrenchment benefits, you are allowed exemption of RM6,000 on your retrenchment benefits for each completed year of service. This amount has been increased to RM10,000 if you were retrenched on or after 1 July 2008. - Relief for interest on residential housing loans to set off against personal income. If you are buying a residential property and the Sales & Purchase Agreement is dated from 10 March 2009 to 31 Dec 2010, the housing loan interests that you pay can be set off against your personal income, up to a maximum of RM10,000 each year over 3 years from the first year housing loan is paid. The property must also not be rented out.
The other issues which might be of interest, but not tax related are :-
- If you are retrenched, and wishes to pursue your studies at Master or Ph. D level, the government will subsidise the fees of up to RM10,000 and RM20,000 respectively. These courses must be enrolled in local universities.
- If you are retrenched, you can apply to your bank to withhold your housing loan payment to the banks for 1 year.
This is just s delay of payment. The longer you delay the payment, the more interest you will have to pay at the end, although it does provide a breather space for those who cannot fork out the instalment payments now. - If you have extra money, you can buy government bonds for 3 years which give 5% interest per year. The details of this are not yet finalised. Considering housing loans are relatively cheap now (some are offering BLR-2.2%) At the BLR rate at 5.95 now, it may be more beneficial to invest in this bond than to repay the housing loan.
- If you want to change cars, buy a Proton or a Perodua and trade in you old cars (must be more than 10 years old) and get a rebate of RM5,000.
