The tax-exempted items for 2021

The govt has rolled out various initiatives and tax exemptions for individuals and businesses to cope with the impact of Covid-19


TAX season is looming and due to the current pandemic, the government has rolled out various initiatives and tax exemptions for individuals and businesses.

On top of the exemptions allotted under Budget 2021, Prime Minister Tan Sri Muhyiddin Yassin in a special address last week also announced more tax relief under the special Malaysian Economic and Rakyat’s Protection Assistance Package (Permai).

Here is an updated list of some tax reliefs:

• Up to RM2,500 tax relief on the purchase of mobile phones, computers and tablets, which expired on Dec 31, 2020, will be extended for another year until the end of 2021.

• Extension of the provision of one free gigabyte of data for the public to browse websites, including for educational purposes, to the end of April 2021.

• Employers who bear the cost of Covid-19 screening will get double tax deduction for the payment of employee screening costs made during the year.

Personal Tax

This has been one of the most prominent measures in Budget 2021, the reduction of income tax rate for those earning a salary bracket of RM50,000 to RM70,000 per year.

The middle 40% income group will have a reduction of 1% in income tax to assist with any financial difficulties.

Bantuan Prihatin Rakyat (BPR)

BPR is one of the most targeted forms of assistance the government has done so far, with an allocation of RM6.5 billion. Here is what is being offered:

• Bachelors with an income of less than RM2,500 are eligible to receive RM350.

• If a spouse’s income is less than RM2,500 with one child, they are eligible to receive RM1,200. If there are more than two children, they are eligible to receive RM1,800.

• Spouses earning between RM2,501 and RM4,000 with one child are eligible to receive RM800, while more than two children will receive RM1,200.

• Spouses earning between RM4,000 and RM5,000 with one child will receive RM500 and RM750 for more than two children.


• Tax relief for medical expenses, parental care and special needs have increased from RM5,000 to RM8,000.

• RM8,000 tax exemption for immediate family members with a serious disease and needing medical treatment.

• RM8,000 for parent’s medical check-ups, special needs and treatment.

• RM1,000 tax exemption for full medical check-up.

• Those with disabled spouses will have tax relief of up to RM5,000.

Digital Connectivity

With the increase of people working from home, attending online classes and hosting webinars, the government recognised the need for all groups, especially the bottom 40% income group (B40) to have secure Internet access.

In the first quarter of 2021, the B40 group will receive RM180 in the form of credit, while telecommunication companies will provide RM1.5 billion worth of free data.

Buying Homes

To encourage more first-time home buyers, the government will enforce stamp duty exemptions for two options:

• Full stamp duty exemption on instruments of transfer and loan agreement until December 2025, with an increased limit of up to RM500,000.

• Stamp duty exemption on loan agreements and instruments of transfer given to rescuing contractors and the original house buyers for another five years. This will only be applicable for housing projects that are abandoned but approved by the Ministry of Housing and Local Government.

Meanwhile, the government also announced that the “Rent-To-Own” scheme will continue until 2022 involving 5,000 PR1MA houses.

Travelling Exemptions

• The government has allocated RM300 million for the implementation of the My30 monthly travel pass to Penang and Kuantan, which will include bus and rail services.

• School students from Standard One till Form Six are offered an unlimited travel pass at RM5.


RM50 will be given as a one-off assistance for those aged between 18 and 20, benefitting 1.5 million youths.


Tax relief of RM500 to purchase sports equipment and registration fees for sports fees.

Read our earlier report

Budget 2021: Financial aids available for Malaysians