Double Tax Deduction: Senior Citizen, Ex-Convict, Parolee, Supervised Person and Ex-Drug Dependant

Income Tax (Deduction for Employment of Senior Citizen, Ex-Convict, Parolee, Supervised Person and Ex-Drug Dependant) Rules 2019 [P.U. (A) 164/2019]

11. P.U. (A) 164

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An employer can take a further deduction from the salaries of the following types of employees who is a citizen of Malaysia and residents in Malaysia:

1. a senior citizen who shall be sixty years and above;

2. an ex-convict who is a person who had been convicted for any offence by a court and had served his sentence of imprisonment;

3. a parolee as defined in the Prison Act 1995 [Act 537];

4. a supervised person who is a prisoner directed by an Officer in Charge to work at such labour under subparagraph 47(1)(b)(iii) of the Prison Act 1995; or

5. an ex-drug dependant who—

6. had undergone treatment and rehabilitation under the Drug Dependants (Treatment and Rehabilitation) Act 1983 [Act 283];

7. had undergone supervision under paragraph 6(1)(b) of the Drug Dependants (Treatment and Rehabilitation) Act 1983 or subsection 38B(1) of the Dangerous Drugs Act 1952 [Act 234]; or

8. had been placed under supervision under paragraph 8(3)(b) of the Drug Dependants (Treatment and Rehabilitation) Act 1983, and is registered with the National Anti-Drugs Agency (MyAADK system).

Conditions

To be eligible for the additional deduction, the following conditions must be met:

• the employee works a full-time job

• the monthly salary does not exceed RM4,000,

• the employee and the employer are not the same person

• the employer is not —

• a spouse

• a parent (including a step-parent or parent-in-law)

• a child (including a step-child or adopted child)

• a brother or sister (including step-brother or step-sister), or

• a grandparent or a grandchild (including a step-grandparent or a step-child), and

• in the case of an ex-drug dependant, the employer is required to provide written confirmation from either the Malaysian Prison Department or the National Anti-Drug Agency

These Rules shall have effect for the years of assessment 2019 until the year of assessment 2020.

Income Tax (Deduction for Employment of Senior Citizen, Ex-Convict, Parolee, Supervised Person and Ex-Drug Dependant) (Amendment) Rules 2021.

Following the provisions of the 2019 Rules, there will no longer be any incentive to hire such people after the YA 2020. As a result, the eligibility period for the 2019 Rules has been extended from YA 2020 to YA 2025.

This was done to address the unemployment concerns faced by this group.

The provision for the extension can be found in the Income Tax (Deduction For Employment of Senior Citizen, Ex-Convict, Parolee, Supervised Person and Ex-Drug Dependant) (Amendment) Rules 2021, gazetted on 9 February 2021.

11. .U. (A) 47_2021

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